Indigenous Envtl. Network v. U.S. Dep't of State

347 F.Supp.3d 561

INDIGENOUS ENVIRONMENTAL NETWORK and North Coast River Alliance,andNorthern Plains Resource Council, et al., Plaintiffs,

v. UNITED STATES DEPARTMENT OF STATE, et al., DefendantsandTransCanada Keystone Pipeline and TransCanada Corporation, Defendant-Intervenors.

CV-17-29-GF-BMM

CV-17-31-GF-BMM

United States District Court, D. Montana, Great Falls Division.

Signed November 08, 2018

Stephan C. Volker (Pro hac vice), Alexis E. Krieg (Pro hac vice), Stephanie L. Clarke (Pro hac vice), Jamey M.B. Volker (Pro hac vice), Law Offices of Stephan C. Volker, Berkeley CA, James A. Patten, Patten, Peterman, Bekkedahl & Green, PLLC, Billings, MT, for plaintiffs Indigenous Environmental Network and North Coast Rivers Alliance.

Luther L. Hajek, Bridget K. McNeil, U.S. Department of Justice, Denver, CO, Mark Steger Smith, U.S. Attorney's Office, Billings, MT, for defendants.

ORDER

Brian Morris, United States District Court Judge

Plaintiffs Indigenous Environmental Network and Northern Plains Resource Council (collectively "Plaintiffs") bring this action against the United States Department of State ("the Department") and various other governmental agencies and agents in their official capacities. Plaintiffs allege that the Department violated the Administrative Procedure Act ("APA"), the National Environmental Policy Act ("NEPA"), and the Endangered Species Act ("ESA") when it published its Record of Decision ("ROD") and National Interest Determination ("NID") and issued the accompanying Presidential Permit to allow defendant-intervenor TransCanada Keystone Pipeline, LP ("TransCanada") to construct a cross-border oil pipeline known as Keystone XL ("Keystone"). Plaintiffs have moved for summary judgment. (Docs. 139 & 145.) The Department and TransCanada (collectively "Defendants") have filed cross motions for summary judgment. (Docs. 170 & 172.)

BACKGROUND

The Court detailed the background of this case in its Order regarding the Department's and TransCanada's Motion to Dismiss for Lack of Jurisdiction. (Doc. 99.) The Court will only recite those facts that have arisen since its Partial Order on Summary Judgment Regarding NEPA Compliance. ("Partial Order") (Doc. 210.)

The Court directed the Department, in its Partial Order, to supplement the 2014 final supplemental EIS ("2014 SEIS") to consider the Mainline Alternative route as approved by the Nebraska Public Service Commission. (Doc. 210 at 12.) The Court declined, however, to vacate the Presidential Permit. The Court instead ordered the Department to file a proposed schedule to supplement the 2014 SEIS in a manner allowing appropriate review before TransCanada's planned construction activities. Id.

The Department published the Notice of Intent to Prepare a SEIS in the Federal Register on September 17, 2018. 83 Fed. Reg. 46,989 (Sept. 17, 2018). The Department published the Notice of Availability of the Draft SEIS in the Federal Register on September 24, 2018. 83 Fed. Reg. 48,358 (Sept. 24, 2018). The Court will address each remaining issue in turn.

LEGAL STANDARD

A court should grant summary judgment where the movant demonstrates that no genuine dispute exists "as to any material fact" and the movant is "entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Summary judgment remains appropriate for resolving a challenge to a federal agency's actions when review will be based primarily on the administrative record. Pit River Tribe v. U.S. Forest Serv. , 469 F.3d 768, 778 (9th Cir. 2006).

The APA standard of review governs Plaintiffs' claims. See W. Watersheds Project v. Kraayenbrink , 632 F.3d 472, 481 (9th Cir. 2011) ; Bennett v. Spear , 520 U.S. 154, 174, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997). The APA instructs a reviewing court to "hold unlawful and set aside" agency action deemed "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). A rational connection must exist between the facts found and the conclusions made in support of the agency's action. Kraayenbrink , 632 F.3d at 481. The Court reviews the Department's compliance with NEPA and the ESA under the arbitrary and capricious standard pursuant to the APA. See Ctr. for Biological Diversity v. Nat'l Highway Traffic Safety Admin. , 538 F.3d 1172, 1194 (9th Cir. 2008).

DISCUSSION

I. Did the Department Violate NEPA when it Approved Keystone?

Plaintiffs first allege that the Department violated NEPA when it approved Keystone. (Doc. 140 at 20.) NEPA serves as the "basic national charter for protection of the environment." 40 C.F.R. § 1500.1(a). NEPA requires federal agencies to prepare a "detailed statement" for any "major Federal actions significantly affecting the quality of the human environment." 42 U.S.C. § 4332(2)(C). The agency's detailed statement is known as an environmental impact statement ("EIS"), and must describe the environmental impacts of the proposed action. 42 U.S.C. § 4332(2)(C)(i), (ii).

The EIS must include a "full and fair discussion" of the effects of the proposed action, including those on the "affected region, the affected interests, and the locality." 40 C.F.R. §§ 1502.1, 1508.27(a). An agency also may be required to perform a supplemental analysis "if significant new circumstances or information relevant to environmental concerns and bearing on the proposed action or its impacts" arise during the NEPA review. 40 C.F.R. § 1502.9(c)(1)(ii). The Court must ensure that the agency has taken a "hard look" at the environmental consequences of its decision. Churchill Cnty. v. Norton , 276 F.3d 1060, 1072 (9th Cir. 2001).

A. Purpose and Need Statement

Plaintiffs challenge the reasonableness of the Department's purpose and need statement. (Doc. 146 at 22.) Plaintiffs allege that the Department violated NEPA when it focused the purpose and need narrowly on TransCanada's private interests and improperly restricted the scope of the 2014 SEIS. Id.

NEPA requires agencies to "briefly specify the underlying purpose and need to which the agency is responding in proposing the alternatives including the proposed action." 40 C.F.R. § 1502.13. Courts afford agencies "considerable discretion to define the purpose and need of a project." Westlands Water Dist. v. U.S. Dept. of Interior , 376 F.3d 853, 866 (9th Cir. 2004). NEPA permits an agency to consider the needs and goals of the parties involved in the application. 40 C.F.R. § 1508.18(b)(4). The agency may consider the context of the action proposed, as well as the objectives of the private applicant. Alaska Survival v. Surface Transp. Bd. , 705 F.3d 1073, 1085 (9th Cir. 2013). A purpose and need statement will fail, however, if it unreasonably narrows the alternatives in a manner that preordains the outcome. Id. at 1085. The Court's duty requires it to review the purpose and need statement for reasonableness. Westlands Water Dist. , 376 F.3d at 866.

The purpose and need statement reasonably defines both TransCanada's and the Department's purposes. For TransCanada, "the primary purpose of [Keystone] is to provide the infrastructure to transport Western Canadian Sedimentary Basin ("WCSB") crude oil from the Canadian border, to existing pipeline facilities near Steele City, Nebraska, for onward delivery to Cushing, Oklahoma, and the Texas Gulf Coast area." DOSKXLDMT0005756. Most of the crude oil ultimately would be delivered to refineries in the Gulf Coast area. Id. TransCanada maintains contractual obligations to transport approximately 555,000 barrels per day ("bpd") of WCSB crude oil to the Gulf Coast area. Id. Keystone would serve to fulfill TransCanada's need to meet contractual demand, compete with other transportation options, and to provide refiners a reliable supply of light crude oil from the WCSB and the Bakken. Id. at 5757.

The Department's purpose stems from the President's authority to require permits for transboundary projects. Executive Order 13,337 delegates to the Secretary of State ("Secretary") the authority to receive applications for cross-border permits. 69 Fed. Reg. 25,299 (April 30, 2004). As part of this delegation, the Secretary must determine if issuance of a permit would serve the national interest. Id. at 25,300.

The Department's purpose, therefore, stems from Keystone's crossing of the international border between the United States and Canada. This crossing requires a cross-border permit. DOSKXLDMT0005757. The Department must put forth a ROD approving or denying TransCanada's cross-border permit application. Id. The Department needed to consider Keystone's application and whether it would serve the national interest. Id. The Department reached a national interest determination based on its evaluation of the Keystone's potential environmental, cultural, economic, and other impacts. Id.

No error exists in the Department's purpose and need statement. The Department possesses broad discretion to define the purpose of its actions. The Department may consider private interests as part of its purpose and need. See Alaska Survival , 705 F.3d at 1085. The Department reasonably stated that it sought to determine whether approval of the permit would serve the national interest. DOSKXLDMT0005757. The Department's purpose and need statement further proves reasonable when it considered both TransCanada's private interests and the Department's own requirements for issuing cross-border permits.

B. Adequacy of Alternatives

Plaintiffs next allege that the Department violated NEPA by failing to consider a reasonable range of alternatives in approving Keystone. (Doc. 146 at 24-25.) Plaintiffs allege that the Department unreasonably dismissed alternatives that did not satisfy TransCanada's purpose. Plaintiffs further contend that the Department failed to consider feasible, environmentally beneficial alternatives. Id.

1. Dismissal of Alternatives

Plaintiffs allege that the Department only analyzed alternatives that satisfied TransCanada's private needs. Id. at 23-24. NEPA requires that an...