Defenders of Wildlife v. Bureau of Ocean Energy Mgmt., Regulation, & Enforcement

871 F.Supp.2d 1312

DEFENDERS OF WILDLIFE, Plaintiff,

v. BUREAU OF OCEAN ENERGY MANAGEMENT, REGULATION, and ENFORCEMENT, et al., Defendants,American Petroleum Institute, et al., Defendant–Intervenors.

Civil Action No. 10–0254–WS–C.

United States District Court,

S.D. Alabama,

Southern Division.

May 8, 2012.

Catherine M. Wannamaker, Gilbert Broughton Rogers, Atlanta, GA, Michael Senatore, Sierra B. Weaver, Washington, DC, for Plaintiff.

Guillermo A. Montero, James D. Gette, Michael D. Thorp, James Anthony Maysonett, Joanna K. Brinkman, Washington, DC, Gary A. Moore, U.S. Attorney's Office, Mobile, AL, for Defendants.

Brian P. McCarthy, McDowell Knight Roedder & Sledge, L.L.C., James Rebarchak, Jones, Walker, Waechter, Poitevent, Mobile, AL, Bradley Keith Ervin, Steven J. Rosenbaum, Covington & Burling, LLP, Michael B. Wigmore, Sandra Franco, Washington, DC, Kevin Christopher Newsom, Sid J. Trant, Bradley, Arant, Rose & White, Birmingham, AL, Carmen M. Rodriguez, Douglas C. Longman, Jr., Lafayette, LA, for Defendant–Intervenors.

ORDER

WILLIAM H. STEELE, Chief Judge.

This matter comes before the Court on Plaintiff's Motion for Summary Judgment (doc. 113), the Federal Defendants' Cross–Motion for Summary Judgment (doc. 118) and the Joint Motion for Summary Judgment of the American Petroleum Institute, Independent Petroleum Association of America, U.S. Oil and Gas Association, International Association of Drilling Contractors and Chevron USA, Inc. (doc. 117). These Motions have been the subject of extensive briefing, and are now ripe for disposition.¹

I. Relevant Background.

In all pertinent respects, the underlying facts of this matter are undisputed. Before examining those facts, however, it may be beneficial to summarize key statutory provisions governing the offshore oil leasing program at issue herein.

A. Basic Provisions of the Outer Continental Shelf Lands Act.

The purpose of the Outer Continental Shelf Lands Act, 43 U.S.C. §§ 1331 et seq. (“OCSLA”) is “to establish federal ownership and control over the mineral wealth of the OCS and to provide for the development of those natural resources.... The OCSLA thus ... establishes a regulatory scheme governing leasing and operations there.” EP Operating Ltd. Partnership v. Placid Oil Co., 26 F.3d 563, 566 (5th Cir.1994); see also Center for Biological Diversity v. U.S. Dep't of Interior, 563 F.3d 466, 472 (D.C.Cir.2009) (“OCSLA establishes a procedural framework under which [the Secretary of the] Interior may lease areas of the OCS for purposes of exploring and developing the oil and gas deposits of the OCS's submerged lands.”). When Congress amended OCSLA in 1978, it declared the policy of the United States to be that “the outer Continental Shelf is a vital national resource reserve held by the Federal Government for the public, which should be made available for expeditious and orderly development, subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs.” 43 U.S.C. § 1332(3).

Under OCSLA, as amended, Congress prescribed a sequence of “four distinct statutory stages to developing an offshore oil well: (1) formulation of a five year leasing plan by the Department of the Interior; (2) lease sales; (3) exploration by the lessees; (4) development and production.” Secretary of the Interior v. California, 464 U.S. 312, 337, 104 S.Ct. 656, 78 L.Ed.2d 496 (1984); see also Center for Biological Diversity, 563 F.3d at 473 (“OCSLA provides that Interior undertake a four-stage process in order to develop an offshore oil well.”). “The stated reason for this four part division was to forestall premature litigation regarding adverse environmental effects that all agree will flow, if at all, only from the latter stages of OCS exploration and production.” Sec'y of Interior, 464 U.S. at 341, 104 S.Ct. 656. Congress's decision to compartmentalize the stages of OCS exploration and drilling in this manner bears profound implications for the issues joined in this litigation.

B. Lease Sale 213.

In April 2007, the Secretary of the Interior issued a proposed five-year program for oil and gas leasing on the Outer Continental Shelf from 2007–2012 (the “Five–Year Plan”). (AR, 50–194.) ² The Five–Year Plan was supported by extensive environmental review at its inception, including without limitation a Final Environmental Impact Statement for Gulf of Mexico OCS Oil and Gas Lease Sales: 2007–2012 (the “Multisale EIS”) (AR, 1807–2883); a Final Supplemental Environmental Impact Statement for Gulf of Mexico OCS Oil and Gas Lease Sales: 2009–2012 (the “SEIS”) (AR, 2884–3368); a National Marine Fisheries Service (“NMFS”) Biological Opinion examining the Five–Year Plan (the “NMFS Opinion”) (AR, 1493–1638); and a Biological Assessment by the U.S. Fish and Wildlife Service (“FWS”) for the Five–Year Plan (the “FWS Assessment”) (AR, 1639–1718).

In administering the Five–Year Plan, on March 12, 2009, the Department of the Interior's Bureau of Ocean Energy Management (“BOEM”) issued a press release announcing that Lease Sale 213 would be conducted in New Orleans, Louisiana, on March 17, 2010, at which time BOEM would sell oil and gas leases encompassing 6,958 blocks located in federal waters at distances from three to more than 230 miles offshore, in water depths ranging from 10 to 11,200 feet. (AR, 200.) BOEM estimated that Lease Sale 213 would culminate in production of as many as 1.3 billion barrels of oil and 5.4 trillion cubic feet of natural gas from the Central Gulf of Mexico. ( Id.) On February 12, 2010, BOEM published a “Final Notice of Sale 213” in the Federal Register, confirming that Lease Sale 213 would take place in New Orleans on March 17, 2010. (AR, 217–18, 247–55.)

Lease Sale 213 proceeded as scheduled. Indeed, on March 17, 2010, BOEM unsealed and publically announced some 642 bids on 468 tracts located in the central Gulf of Mexico offshore of Louisiana, Mississippi and Alabama, in varying depths of water and at various distances from the coast. (AR, 258, 575–78.) ³ Bids were cast on some 151 blocks at water depths of less than 200 meters, as well as 141 blocks at depths in excess of 2,000 meters. ( Id. at 576.) In the aggregate, the high bids received by BOEM in connection with Lease Sale 213 exceeded $949 million. ( Id.)

That said, high bids are not automatically accepted for OCSLA leases; rather, they are subject to BOEM review and approval for adequacy, irregular bidding patterns, and so on. The agency carried out the regulatory process of review/approval/acceptance of bids on a rolling basis during the weeks and months following the March 17 sale in New Orleans. Thus, on March 31, 2010, BOEM accepted 85 bids as satisfactory in Phase 1 of the evaluation process for Lease Sale 213. (AR, 579–81.) ⁴ Phase 2 proceeded thereafter, with additional bids being approved by BOEM on an incremental basis in the ensuing ten weeks. BOEM deemed an additional 358 bids acceptable between April 1, 2010 and June 11, 2010. (AR, 616–28.) All but 27 of those 358 Phase 2 bids were accepted by BOEM after April 20, 2010, including (for example) some 21 bids accepted on April 22. ( Id.) The timing of BOEM's acceptance of Phase 2 bids—and its decision to proceed with such acceptances despite the occurrence of a significant external shock in the Gulf of Mexico in the meanwhile—lies at the heart of this litigation.

C. The Deepwater Horizon Spill.

While BOEM performed the day-to-day task of administering Phase 2 of the bid approval process for Lease Sale 213 in April 2010, environmental disaster struck in the central Gulf of Mexico. On April 20, 2010, the Mobile Offshore Drilling Unit Deepwater Horizon exploded and sank in the Gulf, where it had been drilling a well some 52 miles from shore in nearly 5,000 feet of water. (AR, 9179.) Eleven workers at the site died. ( Id.) Compounding the tragedy, crews were unable to secure the wellhead and staunch the flow of crude oil from that location for some time, as safety equipment designed to prevent major oil spills did not function as anticipated. ( Id.) As a result, staggering quantities of crude oil (reaching into the millions of barrels, or the hundreds of millions of gallons) gushed into the Gulf from the Deepwater Horizon site for nearly three months before the wellhead was finally capped on July 15, 2010.⁵ Long before the oil flow from the seafloor was contained, it became evident to regulators and to the entire nation that this was an extraordinary event whose economic and ecological effects could be both widespread and severe. For example, in a report dated May 27, 2010 (just 37 days after the rig explosion, and fully seven weeks before the wellhead was capped), the Department of the Interior wrote that the Deepwater Horizon oil spill “has been declared a ‘spill of national significance’ and could become one of the oil industry's gravest disasters. Crude oil continues to flow from a broken pipe on the seafloor, has spread across thousands of square miles, and is damaging local economies, sensitive coastlines and wildlife throughout the Gulf region.” (AR, 9181.) It was obvious, even then, that this incident had the potential to visit catastrophic harm on fragile Gulf Coast aquatic and coastal ecosystems.

D. The Secretary of Interior's Post–Spill Conduct.

In the wake of the Deepwater Horizon incident, BOEM commenced a joint investigation with the U.S. Coast Guard and issued new safety recommendations to operators and drilling contractors. (AR, 9179.) In May 2010, the Department of the Interior issued a comprehensive set of recommendations, including “a series of steps immediately to improve the safety of offshore oil and gas drilling operations in Federal waters and a moratorium on certain permitting and drilling activities until the safety measures can be implemented and further analyses completed.” (AR, 9181.) On May 28, 2010, the Secretary of the Interior made a specific...