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California v. Watt

Citation: 12 ELR 20001
No. Nos. 80-1894 et al., 668 F.2d 1290/16 ERC 1561/(D.C. Cir., 10/06/1981) remanded

The District of Columbia Circuit Court of Appeals rules that the Secretary of the Interior's preparation of the five-year oil and gas leasing program for the outer continental shelf (OCS) violated § 18 of the Outer Continental Shelf Lands Act (OCSLA). Initially, the court determines that, based upon § 23(c)(6) of the OCSLA and its previous rulings, review of the Secretary's findings of ascertainable fact is judged by the substantial evidence test and review of the policy judgments made by the Secretary is governed by an arbitrary and capricious standard. Next, the court rules that the Secretary violated § 18(a)'s requirement that the location of the leasing activity be specified "as precisely as possible," by designating proposed Lease Sale Nos. 73 and 80 as simply "California" and orders the Secretary to identify these two proposed sales with greater specificity. The court also determines that the legislative history and language of § 18(a)(2) compel the conclusion that the Secretary is required to base the leasing program on the consideration of all factors listed in § 18(a)(2). Specifically, the Secretary adequately considered regional and national energy markets, other uses of the sea and seabed, and the potential impediments to exploration and development posed by state laws and policies in developing the leasing program. However, the Secretary ministerpreted § 18(a)(2)(B)'s directive that he consider "an equitable sharing of developmental benefits and environmental risks among the various regions" by defining "environmental risks" solely in terms of the likelihood of an oil spill without considering the amount of damage the spill would inflict. In addition, the Secretary analyzed relative environmental sensitivity and marine productivity of four major OCS regions, thereby violating § 18(a)(2)(G)'s mandate to compare the environmental sensitivity and marine productivity of one individual OCS region with another. While the court notes that lack of information and analytical resources may make the consideration highly speculative, it concludes that the Secretary is required to make a good faith determination of the relative environmental sensitivity and marine productivity of the various regions based upon the best available existing information. Next the court finds that although the Secretary reasonably concluded that the factors enumerated in § 18(a)(2)(C), (D), and (F) posed no absolute impediment to leasing a particular area, he failed to properly consider the mandates of § 18(a)(2)(B) and (G) and therefore only partially fulfilled his duty to base the location of leasing among the regions on § 18(a)(2)'s factors. In addition, the decision as to the timing of the lease sales was not based on the environmental and coastal zone factors specified in § 18(a)(2). Therefore, the Secretary is required to base timing and location of leasing activities among the OCS regions on all of the factors enumerated in § 18(a)(2). Turning to § 18(a)(3), the court determines that the Secretary, when selecting the location and timing of leasing, is required to consider the potential for environmental damage, the likelihood of significant discoveries of oil and gas, and the adverse impacts on the coastal zone. He must then balance the results, an analysis which includes some notion of potential costs and benefits of the program. The court also rules that the Secretary complied with § 18(c) and (d) since he considered the recommendations made by the affected states and adequately explained his reasons for accepting or rejecting them. Finally, the Secretary filled any trust responsibility owed to the Inupiat Eskimos by complying with all relevant environmental statutes in preparing the leasing program. The court remands the program to the Secretary for reconsideration in accordance with the OCSLA.

Counsel for Petitioners
Theodora Berger, John A. Saurenman, Deputy Attorneys General
3580 Wilshire Blvd., Los Angeles CA 90010
(213) 736-2191

Wilson Condon, Attorney General; Jonathan K. Tillinghast, Special Ass't Attorney General
Pouch K, State Capitol, Juneau AK 99811
(907) 465-3600

Sarah Chasis, Jane Bloom
Natural Resources Defense Council, Inc.
112 E. 42d St., New York NY 10017
(212) 949-0049

Bruce J. Terris
Terris & Sunderland
1526 18th St. NW, Washington DC 20036
(202) 332-1882

Counsel for Respondents
Anthony C. Liotta, Acting Ass't Attorney General; Margaret Strand, Bruce C. Rashkow, William M. Cohen
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2771

Before: MacKINNON and ROBB, Circuit Judges, and AUBREY E. ROBINSON, JR., District Judge for the District of Columbia.*