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False Pass, Village of v. Clark

Citation: 14 ELR 20398
No. Nos. 83-3989 et al., 733 F.2d 605/20 ERC 1705/(9th Cir., 03/12/1984) Aff'd

The court rules that the Endangered Species Act (ESA) does not require imposition of specific restrictions to protect endangered whales and the National Environmental Policy Act (NEPA) does not require preparation of a worst case analysis of potential oil spills prior to an offshore oil and gas lease sale. The court notes that it is bound by the Supreme Court's characterization of lease sales under the Outer Continental Shelf Lands Act (OCSLA) in Secretary of the Interior v. California, 14 ELR 20129, as conveying no right to develop the lease. The court rules that NEPA and the ESA each may apply fully of their own force and effect to each of the three stages of oil and gas leasing outlined by the OCSLA: leasing, exploration, and development. The OCSLA imposes additional NEPA requirements at the leasing and development stages.

The court affirms the district court's ESA rulings, 13 ELR 20905. First, it holds moot plaintiffs' claims that the Secretary of the Interior violated his ESA obligation to consult with appropriate agencies and to use best available data on the lease sale's impact on endangered species when he signed the final notice of sale before receiving the National Marine Fisheries Service's final biological opinion.The Secretary issued a final supplemental environmental impact statement (EIS) incorporating the biological opinion after the district court's decision. However, the court notes that since the lease sale is not an irreversible or irretrievable commitment of resources, the Secretary's signing did not violate Department of the Interior (DOI) ESA regulations. In addition, the Secretary had considered the draft opinion before issuing the notice and there is no evidence that the draft was iandequate under ESA standards. The court also rules that the ESA does not require the Secretary to prescribe specific protections for endangered whales that migrate through the lease sale area prior to the lease sale. The Secretary satisfied the ESA by including in the final notice of sale disclaimers reserving the right to impose restrictions on leaseholders to protect the endangered whales. The court notes that the ESA will require the Secretary to exercise the right when necessary to protect the whales, and the planned scheme of monitoring and reporting should inform the Secretary when protection is needed. The court also rules that a cross-appeal of the district court's requirement that DOI assess the impacts of pre-exploration seismic testing was mooted by DOI's compliance with the district court order.

The court then rules that DOI did not violate NEPA by failing to include a worst case analysis of a very large (100,000 barrel) oil spill in its EIS. The court first resolves which of the two standards for requiring worst case analyses included in the Council on Environmental Quality (CEQ) regulations the court should apply on review. It concludes that it is appropriate to apply the "important to the decision" test, because the parties agree that if that thest does not require a worst case alalysis then neither will the "essential to a reasoned choice" test. The court rules that the requested worst case analysis could be performed at later stages of the leasing process when better information is available, and that it could still be the basis for cancellation of a lease before serious environmental harm occurs. Although the OCSLA provisions authorizing cancellation of leases appear inapplicable to a worst case situation because they require a high degree of probability of environmental harm, DOI's NEPA regulations allow suspension and eventual cancellation of leases for NEPA violations. The Secretary also has discretion to reject exploration and development plans for environment failings. The court rejects plaintiffs' argument that later review of the worst case analysis is unlikely because the OCSLA only requires an EIS for one development and production plan in a lease sale area. The OCSLA requirement is a minimum, and worst case analyses could be required for EISs or environmental assessments for any plan for which they were relevant. The environmental studies DOI has already prepared provide a sufficient overview of future possibilities to guide DOI in charting future studies. Since the lease sale is a relatively isolated stage in the oil and gas development process in the staged structure of the OCSLA, the Secretary did not abuse his discretion in concluding that a major oil spill worst case is not "important" to the lease sale decision.

A dissent would require a worst case analysis prior to the lease sale. The OCSLA restricts the impact of a worst case analysis after the lease has been sold. The enormous expenditures for leases, along with the administrative decisions to proceed, create a practical momentum for development that will be extremely difficult to reverse. The Supreme Court decision in Secretary of the Interior is distinguishable because it dealt with the Coastal Zone Management Act, which gives the states relatively unrestricted power to block the development process after the lease sale stage.

Counsel for Plaintiffs
Eric Smith
Trustees for Alaska
833 Gambell St., Suite B, Anchorage AK 99501
(907) 276-4344

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

Counsel for Defendants
Cynthia Christianson, Ass't U.S. Attorney
701 C St., Box 9, Anchorage AK 99513
(907) 271-5071

Michael W. Reed, James M. Spears
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-5288

Counsel for Intervenors
Carl J. D. Bauman
Hughes, Thorsness, Gantz, Powell & Brundin
509 W. 3d Ave., Anchorage AK 99501
(907) 274-7522

E. Edward Bruce
Covington & Burling
P.O. Box 7566, Washington DC 20044
(202) 662-6000

Before KILKENNY, WALLACE and CANBY, Circuit Judges.