Keep It In The Ground: A Crown of the Continent Kickoff?

Monday's filing in a long-running suit over oil leases in the Badger-Two Medicine area says the leases will be cancelled as having been issued contrary to NEPA. It'll at least be 'kept in the ground' there.

The lands at issue are surrounded by protected areas: Glacier National Park to the north, the immense Bob Marshall Wilderness Area to the south and west and the Blackfeet Indian Reservation to the east.  In fact, counting up all of the protected areas in that region of the continent, it is probably one of the most tightly regulated ecosystems in North America. B2M area map

As this extraordinary piece by professors Bob Keiter and Joe Sax showed a decade ago, this “Crown of the Continent” ecosystem may be comprised of large conservation areas.  But that hardly assures its actual protection.  There are always boundary effects, inholdings, hold-overs, and loopholes.

So the news that this lease would be canceled as having been granted in violation of NEPA is aligning some larger forces in the acrid war over ‘keeping it in the ground.’ And that’s about all this comes down to with oil prices what they are today.  With dry well bores all over the region, the notion that any venture there would be profitable any time soon seems, well, doubtful.

The current holder of the lease, Solenex, will be relying on the able counsel of the Mountain States Legal Foundation (according to local reports).  MLF logo

The history of these leases, like the legal wrangling about them, is complicated.  {See this essay summarizing the history.}  It arguably started in 1981 when the leases were first planned.  As the Daily Missoulian reports, the leases weren’t actually sold until 1985 and permission to drill was suspended in 1993.

A coalition of conservation groups and Blackfeet organizations challenged the leases in 1994, arguing the Blackfeet were not properly consulted about the impact of energy exploration on ground they consider sacred. The Interior Department suspended the leases in 1996 after finding the permits didn’t have a proper [NEPA] review.  The whole issue remained quiet until [the lessee] attempted to revive its permits in 2013. U.S. District Judge Richard Leon ordered [the government] to either present a timeline for approving the leases or cancel them by Monday.

Indeed, the Blackfeet Tribe has reportedly gone to extraordinary lengths to move this lessee out yet still make it whole:

Murray [the Tribe’s Cultural Preservation Officer] said the Blackfeet Tribe had offered [the owner] 17 lease tracts along its border with Canada in a swap for the Badger-Two Medicine leases.  “The tribe has been producing oil there since the late 1920s,” Murray said. “On the Canadian side, petroleum engineers have had very successful explorations. They think it may be comparable to the Bakken (oil fields of eastern Montana and the Dakotas). [He] turned that down, and after a period of time that offer was withdrawn.

Monday’s filing made clear that the U.S. Government now thinks that the leases were issued in violation of NEPA, though, and so should be cancelled.  Why?

NEPA Requires Informed Balancing of Trade-Offs at Preliminary Stages, Too

The Department of Interior’s own rules make any Mineral Leasing Act lease “voidable” if it was issued in violation of any governing procedural requirement (like NEPA).  That then turns on NEPA.  Here the claim has always been that the NEPA review done before the leases were sold was insufficient for having paid too little heed to the significant Tribal cultural values oil/gas development there would jeopardize.  CEQ’s rules make that an important factor for NEPA’s “significance” threshold, see 40 C.F.R. § 1508.27(3), as do multiple federal court precedents. In short, an environmental assessment and finding of no significant impact (EA/FONSI) which ignored the tribe’s claims entirely would be legally insufficient.

But the narrow issue centers on when such an analysis was/is due.  If it was required at the time the leases were planned—as opposed to the point when any drilling and/or other production activities commence—then these leases are pretty clearly invalid for having failed to comply with NEPA.  If, however (as the Government has argued in other contexts), the contingent and sequential nature of oil/gas planning, leasing, and developing decisions means that site-specific NEPA analyses can and should await the actual conduct of site-specific surface-disturbing actions, then the conclusion here is a bit murkier.  See, e.g., Center for Biological Diversity v. U.S. Dept. of Interior, 563 F.3d 466, 472-73 (D.C. Cir. 2009); Center for Sustainable Economy v. Jewell, 779 F.3d 588, 594-95 (D.C. Cir. 2015).

Assuming these decisions on the Lewis & Clark National Forest are not covered by that analysis so common in the offshore context, the governing Ninth Circuit precedents, Conner v. Burford, 848 F.2d 1441 (9th Cir. 1988), and Bob Marshall Alliance v. Hodel, 852 F.2d 1223 (9th Cir. 1988)—which hold that a NEPA analysis is due before any “irretrievable commitment” of resources is made—were both decided after these leases were first planned in 1981.  So are they controlling?

In the constitutional context, the Supreme Court—after some waffling and a flip flop—held that a “rule of federal law, once announced and applied to the parties to the controversy, must be given full retroactive effects by all courts adjudicating federal law.”  Harper v. Virginia Dept. of Tax., 509 U.S. 86, 99 (1993).  That’s a rule of constitutional interpretation, though.  Should it apply to two lower court opinions interpreting NEPA?  SCOTUS has at least clarified since that Harper doesn’t apply in all cases.  See Reynoldsville Casket Co. v. Hyde, 514 U.S. 749 (1995).  And the regional circuits are notoriously at odds across many NEPA issues (arguably including this one) at any given moment.

Conner and Bob Marshall Confirmed the Law.  They Didn’t Make It.

The NEPA text construed in the two cases, Section 102(2)(C)(v), requires that any EIS prepared include a “detailed statement . . . on . . . any irreversible and irretrievable commitments of resources which would be involved in the proposed should it be implemented.”  42 U.S.C. § 4332(2)(C)(v).  The Conner court deftly dropped a footnote extending this ‘commitment’ concern of § 102’s to the timing by which an EIS is due.  In the court’s view, “[o]bviously this requirement only makes sense if the EIS is prepared prior to the commitment of resources.”  Conner, 848 F.2d at 1446 n.13 (emphasis added).

With that, the Ninth Circuit parlayed the statute’s requirement of what must be in an EIS into when that EIS—or any preliminary analysis of whether an EIS is required—is due.  Many Ninth Circuit cases have followed this rule since.  But it’s a hard rule to apply to Mineral Leasing Act actions because when and how the administering agency actually commits to resource-disturbing activities in some “irreversible” way is deeply uncertain.  This may explain why the Ninth Circuit’s rule has essentially remained its own.  The Tenth Circuit, although given the chance in 2004, has never abandoned its own “all things considered reasonableness” standard announced in Park County Resource Council, Inc. v. U.S. Dept. of Ag., 817 F.2d 609, 625-26 (10th Cir. 1987).

Still, Solenex’s attorney should be familiar with the logic: the Tenth Circuit used it to rule against his client on this issue on New Mexico’s Otero Mesa in 2009.  See New Mexico ex rel. Richardson v. BLM, 565 F.23d 683, 705-08 (10th Cir. 2009).

The Ninth Circuit’s rule is one that easily follows from NEPA’s text.  Its application to these leases in Badger Two-Medicine only makes sense.  And so the leases should be voidable as having been issued in violation of NEPA.  If Solenex has a remedy, it’s in seeking “just compensation” for any “property” taken.  Of course, Mountain States knows only too well how unlikely that claim is to succeed.

{Image: B2M ©2013 Montana on the Ground}

I teach environmental, natural resources, and administrative law at Penn State Law. Before teaching I was an enforcement lawyer at U.S. EPA. Along the way I've done work for environmental nonprofits and written a fair bit about NEPA.
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