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WildEarth Guardians v. United States Bureau of Land Management

United States Court of Appeals, Tenth Circuit

September 15, 2017

WILDEARTH GUARDIANS; SIERRA CLUB, Petitioners - Appellants,
v.
UNITED STATES BUREAU OF LAND MANAGEMENT, Respondent - Appellee, and WYOMING MINING ASSOCIATION; BTU WESTERN RESOURCES, INC.; STATE OF WYOMING; NATIONAL MINING ASSOCIATION, Respondents - Intervenors -Appellees. THE INSTITUTE FOR POLICY INTEGRITY AT NEW YORK UNIVERSITY SCHOOL OF LAW, Amicus Curiae.

         APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF WYOMING (D.C. No. 2:13-CV-00042-ABJ)

          Nathaniel Shoaff (Nathan Matthews, Sierra Club; Samanta Ruscavage-Barz, WildEarth Guardians, with him on the briefs), Sierra Club, San Francisco, California, for Petitioners-Appellants.

          Daniel W. Wolff (Kirsten L. Nathanson and Sherrie A. Armstrong, Crowell & Moring, LLP, Washington, D.C.; Michael Drysdale, Dorsey & Whitney, LLP, Minneapolis, Minnesota; Andrew C. Emrich, P.C., Holland & Hart LLP, Greenwood Village, Colorado, with him on the brief), Crowell & Moring, LLP, Washington, D.C., for Respondent-Appellees BTU Western Resources, Inc., National Mining Association, and Wyoming Mining Association.

          Michael T. Gray, Attorney (Philip C. Lowe, of Counsel, United States Department of the Interior, Rocky Mountain Regional Solicitor's Office; John C. Cruden, Assistant Attorney General; John S. Most and Andrew C. Mergen, Attorneys, with him on the brief), Appellate Section, Environment and Natural Resources Division, United States Department of Justice, Jacksonville, Florida, for Respondent-Appellee, United States Bureau of Land Management.

          Erik E. Petersen (Michael J. McGrady, with him on the brief), Wyoming Office of the Attorney General, Cheyenne, Wyoming, for Respondents-Intervenors-Appellee State of Wyoming.

          Jayni Foley Hein and Jason A. Schwartz, Institute for Policy Integrity, New York, NY, filed an amicus curiae brief on behalf of the Institute of Policy Integrity at New York University School of Law in support of Petitioners-Appellants.

          Before BRISCOE, McKAY, and BALDOCK, Circuit Judges.

          BRISCOE, CIRCUIT JUDGE.

         Appellants WildEarth Guardians and Sierra Club (Plaintiffs) challenge the Bureau of Land Management's (BLM) decision to approve four coal leases in Wyoming's Powder River Basin. Plaintiffs brought an Administrative Procedure Act (APA) claim arguing that the BLM failed to comply with the National Environmental Policy Act (NEPA) when it concluded that issuing the leases would not result in higher national carbon dioxide emissions than would declining to issue them. The district court upheld the leases. We reverse and remand with instructions to the BLM to revise its Environmental Impact Statements (EISs) and Records of Decision (RODs). We do not, however, vacate the resulting leases.

         I.

         A. Statutory and Regulatory Background

         The NEPA, 42 U.S.C. §§ 4321-4370h, and its implementing regulations promulgated by the Council on Environmental Quality (CEQ), 40 C.F.R. §§ 1500.1-1518.4, are "our national charter for protection of the environment." 40 C.F.R. § 1500.1(a). Section 102 of NEPA, in relevant part, requires federal agencies to

include in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official on-
(i) the environmental impact of the proposed action,
(ii) any adverse environmental effects which cannot be avoided should the proposal be implemented, [and]
(iii) alternatives to the proposed action.

Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 348-39 (1989) (emphasis added) (quoting 42 U.S.C. § 4332(C)). In these EISs, agencies must analyze direct effects, reasonably foreseeable indirect effects, and effects that are cumulative over time or aggregated with other forces outside the agency's proposed action. 40 C.F.R. § 1508.7, 1508.8.

         The alternatives analysis "is the heart of the environmental impact statement." § 1502.14. Agencies "should present the environmental impacts of the proposal and the alternatives in comparative form, thus sharply defining the issues and providing a clear basis for choice among options by the decisionmaker and the public, " including a "no action" alternative. Id. Agencies must "rigorously explore and objectively evaluate" these alternatives "so that reviewers may evaluate their comparative merits." Id. "Without substantive, comparative environmental impact information regarding other possible courses of action, the ability of an EIS to inform agency deliberation and facilitate public involvement would be greatly degraded." New Mexico ex rel. Richardson v. BLM, 565 F.3d 683, 708 (10th Cir. 2009). Courts often characterize NEPA's procedural requirement as obliging agencies to take a "hard look" at the environmental consequences and alternatives. Methow Valley, 490 U.S. at 350; Richardson, 565 F.3d at 704; Biodiversity Conservation All. v. U.S. Forest Serv., 765 F.3d 1264, 1267 (10th Cir. 2014). NEPA does not provide a private right of action, so we review this claim under the APA. 5 U.S.C. §§ 701-706.

         B. Factual and Procedural Background

         The Powder River Basin (PRB) region is the largest single contributor to United States' domestic coal production. In 2008, PRB coal represented 55.5% of the United States's surface-mined coal, and 38.5% of the country's total coal production. App. at 983, 988. The BLM controls much of the region and is often in the business of approving mining infrastructure and issuing mining leases under the Federal Land Policy and Management Act (FLPMA), 43 U.S.C. §§ 1701-1787, the Mineral Leasing Act, 30 U.S.C. §§ 181-287, and BLM's own regulations and plans. See 43 C.F.R. §§ 1601.0-1610.8, 43 C.F.R. §§ 3400.0-3-3487.1.

         At issue in this case are four coal tracts[1] that extend the life of two existing surface mines near Wright, Wyoming: the Black Thunder mine and the North Antelope Rochelle mine. The four "Wright Area Leases" at issue here are North Hilight, South Hilight, North Porcupine, and South Porcupine. The tracts are also near, and partially within, the Thunder Basin National Grassland, a national forest.

         Alone, the two existing mines account for approximately 19.7% of the United States's annual domestic coal production. App. at 637, 987.[2] The North and South Hilight leases will extend the life of the Black Thunder mine by approximately four years; the North and South Porcupine leases will extend the life of the North Antelope Rochelle mine by approximately nine years. Without these leases, the existing mines would cease operations after the currently leased reserves are depleted. The North Hilight lease was never sold, although the BLM did prepare a ROD for it. Mining has already commenced under three of the four leases, as counsel stated at oral argument. In total, the tracts at issue contain approximately two billion tons of recoverable coal.

         Pursuant to NEPA, BLM prepared a Draft Environmental Impact Statement (DEIS) for the leases. 74 Fed. Reg. 32, 642-01 (July 8, 2009). In the DEIS, BLM compared its preferred action (denominated Alternative 2 in the DEIS) to a no action alternative in which none of the coal leases would be issued, as it was required to do under CEQ regulations. 40 C.F.R. § 1502.14. Regarding carbon dioxide emissions and impacts on climate change, BLM concluded that there was no appreciable difference between the United States's total carbon dioxide emissions under its preferred alternative and the no action alternative. BLM concluded that, even if it did not approve the proposed leases, the same amount of coal would be sourced from elsewhere, and thus there was no difference between the proposed action and the no action alternative in this respect.

         BLM then received comments on the DEIS, including from Plaintiffs. WildEarth Guardians commented that BLM's conclusion on carbon dioxide emissions under the no action alternative was "at best a gross oversimplification, and at worst entirely impossible." App. at 725. They argued that if the tracts were not leased, "it will be very difficult for domestic coal mines, " or international coal mines, to replace that quantity of coal at the same price, making "other sources of electricity, " with lower carbon dioxide emissions rates, "more competitive with coal." Id. at 725-26. WildEarth Guardians concluded that the authorization of the leases would have a significant effect on national carbon dioxide emissions as compared to the no action alternative, and that BLM therefore failed to adequately compare the alternatives. WildEarth Guardians did not provide BLM with any factual support for its argument against BLM's replacement theory, nor did they suggest that BLM use the economic modeling tools employed by other federal agencies under similar circumstances.

         In its responses to comments, BLM stood by its conclusion regarding the comparative demand for coal and resulting carbon dioxide emissions. It acknowledged that cost is one factor which "determine[s] the potential for switching to non-carbon based electric generation, " and that "if the demand for coal decreases nationwide, then coal production and coal mining would decrease." Id. at 48. But it did not acknowledge that denying the Wright Area Leases would have any effect on the price for coal or thereby demand for it. Instead, the BLM concluded that because Energy Information Administration (EIA) projections indicated that population and energy demand would rise, and that coal would remain the largest fuel in the energy mix, demand for coal would remain static even in the face of the potential reduction in supply. The BLM stated that "[l]imiting one or even several points of fuel supply will not affect coal use because of the diverse group of national and international suppliers." Id. at 41.

         The BLM published its Final Environmental Impact Statement (FEIS) for the Wright Area Leases in July, 2010. The FEIS acknowledges some basic presumptions that no one in this litigation contests: the quantity of coal proposed in these leases would result in approximately 382 million tons of annual carbon dioxide emissions from electricity generation, id. at 987, which is the equivalent of roughly 6% of the United States's total emissions in 2008, see id. at 984, anthropogenic carbon dioxide emissions contribute to climate change, id. at 977-80, climate change presents a litany of environmental harms disbursed throughout the globe, id. at 980-82, and if the nation's energy mix shifts towards non-coal energy sources, less carbon dioxide would be emitted. Id. at 997-98.

         However, the BLM's contested conclusion regarding comparative carbon dioxide emissions from the no action alternative remained in the FEIS:

It is not likely that selection of the No Action alternative[] would result in a decrease of U.S. CO2 emissions attributable to coal mining and coal-burning power plants in the longer term, because there are multiple other sources of coal that, while not having the cost, environmental, or safety advantages, could supply the demand for coal beyond the time that the Black Thunder . . . and North Antelope Rochelle mines complete recovery of the coal in their existing leases.

Id. at 988. For purposes of this conclusion, the BLM "assum[ed] that all forms of electric generation would grow at a proportional rate to meet forecast electric demand" in 2010, 2015, and 2020. Id. at 984. The FEIS relies on various governmental reports, including the EIA's Annual Energy Outlook reports from 2008, 2009, and 2010. Under these projections, coal's share of the energy mix continues to represent the largest portion of the United States's energy mix. The BLM predicted that overall demand for coal in the United States was predicted to grow during the life of the Wright Area Leases.

         The BLM then concluded that, because overall demand for coal was predicted to increase, the effect on the supply of coal of the no action alternative would have no consequential impact on that demand. This long logical leap presumes that either the reduced supply will have no impact on price, or that any increase in price will not make other forms of energy more attractive and decrease coal's share of the energy mix, even slightly.

         The BLM acknowledged that many forces might impact future demand for coal, but it continued to disagree that a lack of supply leading to an increase in price could be one of those forces. Additionally, BLM also repeatedly noted that PRB coal enjoys several cost advantages over coal from other regions, but again, disavows the possibility that the no action alternative, in which half of current PRB production would stop, would impact the price of coal or the demand for it.

         Following the FEIS, BLM issued a ROD for each of the four tracts, deciding to offer them for lease. Each ROD is practically identical in its discussion of the climate change implications of the no action alternative. BLM addressed this issue as follows:

Denying this proposed coal leasing is not likely to affect current or future domestic coal consumption used for ...

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