EDC v. Bureau of Ocean Energy Management

In EDC v. Bureau of Ocean Energy Management (“the agency”), the Ninth Circuit reversed a district court’s grant of summary judgment to federal defendants when they approved dozens of applications for fracking off the coast of California. The ruling extended an injunction that banned fracking off the California coast until a more robust environmental review can be performed.

The appellants had filed their appeal based on the National Environmental Policy Act and the Endangered Species Act. Based on these laws, the Department of Interior had a legal requirement to perform a careful environmental review before it could approve the permits. Instead, the agency relied on a more cursory environmental assessment of offshore fracking that did not analyze the risks in as much detail.

Federal courts have a legal right to review agency action under the Administrative Procedures Act. The APA requires courts to set aside agency actions that are arbitrary and capricious. This legal standard involves a decision that is an “unreasonable action without consideration or regard for the facts and circumstances.”

Here, the Ninth Circuit found that it was arbitrary and capricious for the agency to perform an environmental assessment as opposed to preparing a more detailed environmental impact statement (EIS). NEPA requires an EIS when “major Federal actions significantly affecting the quality of the human environment.” The court found that fracking meets the criteria that require a more robust environmental review.

In addition, the Ninth Circuit also explained that the agency’s decision relied on erroneous assumptions. The agency understated the environmental impact of fracking, estimating that it would occur more infrequently than it did when the true data was still incomplete. Agency records revealed gaps and errors in their own assumptions.

The court also held that the agency erred by assuming that permits issued under the Clean Water Act would mean that fracking would have minimal impacts. Agencies are not allowed to “tier” environmental compliance, meaning that permits issued under one statute would not ensure compliance under other circumstances and statutes.

In addition, the court found that the agency did not suitably consider alternatives to fracking. Under NEPA, an agency has a legal obligation to consider alternatives before approving a certain course of action. NEPA requires that the agency take a “hard look” at the course of action, which is something that the BOEM failed to do. The impact of this decision is that the future of offshore fracking is not unclear.