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U.S. District Court Refuses to Force Department of the Interior to Complete Six-Year NEPA Review of Regulation Exempting Offshore Oil and Gas Exploration and Development

The U.S. Department of the Interior (DOI or Interior) regulations provide a categorical exclusion from environmental review for offshore oil and gas exploration and development. Those regulations were recommended for review following the failure of the Maconodo well in the Gulf of Mexico. Interior began a review of the regulations in 2010, but that review has yet to be completed and Interior continues to rely on the regulations in issuing offshore exploration and drilling approvals without individual project review under the National Environmental Policy Act (NEPA). An environmental group sought a court order forcing Interior to finish its review and announce its decision, relying on regulations requiring agencies to “continue to review” their previously-adopted NEPA regulations. The suit was dismissed because the court lacked the authority to compel agency action absent a mandatory duty for the agency to take a discrete action. [Center for Biological Diversity v. Zinke, ___F.Supp.3d___, Case No. 16-cv-738 (KBJ) (D. D.C. May 4, 2017).]

Following the 2010 explosion of the Deepwater Horizon oil rig off the coast of Louisiana, then-President Obama appointed an independent commission to recommend changes to federal regulation of offshore oil drilling in light of the disaster. The Council on Environmental Quality (CEQ) also began a review of the DOI’s procedures for review of proposed offshore oil and gas activities under the National Environmental Policy Act (42 U.S.C. §§ 4321-43710h). Both reviews recommended major revisions to Interior’s procedures, including changes to Interior’s “categorical exclusions” by which most offshore oil and gas exploration and development proposals were not required to undergo project-specific NEPA review. Interior then initiated its own review in October 2010, calling for public comments to be filed within one month. 75 Fed.Reg. at 62,418 (October 8, 2010). That review is still ongoing, and Interior has continued to issue approvals for exploration and development without environmental review under the existing categorical exclusions.

Plaintiff Center for Biological Diversity (CBD) sued to compel DOI to complete its review and decide whether or not it would revise its NEPA procedures. CBD alleged DOI’s failure to act constitutes “unreasonable delay” under the Administrative Procedure Act (5 U.S.C. §§ 701-706, APA).

In considering DOI’s motion to dismiss the complaint, the U.S. District Court for the District of Columbia summarized Interior’s NEPA regulations for reviewing proposed offshore exploration and development projects under the Outer Continental Shelf Lands Act (43 U.S.C. §§ 1331-1356b), under which authority Interior authority may grant leases for offshore drilling. Those regulations provide “with certain exceptions” that no Environmental Impact Statement (EIS) “need be created before the agency” approves applications for exploration or drilling in the Gulf of Mexico.

Applying this standard to the regulations requiring Interior to formulate and review NEPA regulations for processing offshore exploration and drilling permits, the District Court held CBD failed to identify a mandatory duty satisfying the APA’s § 706(1) requirement. While CEQ’s regulations require that Interior adopt procedures to implement NEPA following a public notice and comment period, and then file those regulations CEQ “[w]hat is at issue here is the regulation’s closing sentence, which describes the extent of each agency’s continuing obligations with respect to its NEPA procedures after those procedures are in place: ‘Agencies shall continue to review their policies and procedures and in consultation with [CEQ] to revise them as necessary to ensure full compliance with the purposes and provisions of [NEPA].” 40 C.F.R. § 1507.3(a).

The District Court also rejected CBD’s argument that by “publicly commencing” its review of its NEPA regulations, Interior had imposed on itself a mandatory duty to complete that review. CBD relied on Cutler v. Hayes, 818 F.2d 879 (D.C. Cir. 1987), but the District Court distinguished that case on the basis that the Food and Drug Administration in Cutler interpreted its own enabling legislation as requiring it to complete a public review, once initiated: “As Cutler and CBD’s other authorities make clear, absent a preexisting legislative (or otherwise legally binding) duty to complete a task, an agency does not spawn such a duty simply by commencing the task.”

The holding here illustrates in reverse, as it were, the elements necessary to persuade a court to compel agency action on, for example, a project-specific permit application. The duty to process the permit must be mandatory, and the agency action sought must be discrete both as to scope (approval, disapproval or approval with conditions) and timing. The court’s decision is accessible online at: https://scholar.google.com/scholar_case?case=15013061667360441990&q=Center+for+Biological+Diversity+v.+Zinke&hl=en&as_sdt=2006&as_vis=1

(Deborah Quick)