## Facts

- Hilcorp Alaska sought approval for the Liberty offshore oil drilling and production project in the Beaufort Sea on the Outer Continental Shelf.
- The Bureau of Ocean Energy Management (BOEM) prepared an Environmental Impact Statement (EIS) under NEPA and approved the project by Record of Decision.
- BOEM’s EIS compared the project to alternatives, including a “no action” alternative, and asserted that no action could increase global greenhouse-gas emissions because replacement oil would come from foreign sources with longer transport and weaker environmental controls.
- When assessing the project’s emissions, BOEM did not quantify greenhouse-gas emissions from reasonably foreseeable increased foreign oil consumption resulting from global supply and price effects, stating it lacked sufficient information to project those effects reliably.
- The U.S. Fish and Wildlife Service (FWS) issued an ESA biological opinion (BiOp) addressing listed species and polar bear critical habitat, concluding the project was not likely to adversely affect critical habitat.
- In reaching its ESA conclusions, FWS relied in part on mitigation measures characterized as uncertain or nonbinding and did not provide an estimate of anticipated nonlethal take of polar bears (e.g., harassment/disturbance).
- Conservation organizations petitioned for review under OCSLA, challenging BOEM’s approval on NEPA, ESA, and MMPA grounds.

## Issues

1. Whether BOEM’s EIS was arbitrary and capricious under NEPA for failing to quantify (or adequately justify not quantifying) greenhouse-gas emissions from reasonably foreseeable foreign oil consumption induced by the project.
2. Whether FWS violated the ESA by (a) relying on uncertain, nonbinding mitigation measures in concluding no adverse effect to polar bear critical habitat and (b) failing to estimate the amount or extent of nonlethal take of polar bears.
3. Whether BOEM acted arbitrarily and capriciously by relying on a legally deficient BiOp when approving the project.

## Decision

- The Ninth Circuit held it had jurisdiction to review the challenged approvals under OCSLA.
- The court granted the petition in part and denied it in part.
- NEPA: BOEM acted arbitrarily and capriciously by failing to quantify foreign-consumption greenhouse-gas emissions or to thoroughly explain why quantification was impossible and to provide a more robust qualitative assessment.
- ESA: FWS violated the ESA by relying on uncertain, nonbinding mitigation measures in its critical habitat analysis and by failing to estimate the amount or extent of nonlethal polar bear take.
- Because BOEM relied on an unlawful BiOp, BOEM’s approval was also arbitrary and capricious.
- The court vacated BOEM’s approval of the project and remanded to the agencies for further proceedings.

## Legal Principles

- NEPA requires analysis of reasonably foreseeable indirect effects, including downstream greenhouse-gas emissions tied to market-driven changes in oil supply, price, and consumption, including in foreign markets.
- When an agency declines to quantify an effect that is reasonably foreseeable, it must provide a detailed, reasoned explanation supported by the record; conclusory assertions of insufficient information are inadequate.
- An agency’s selective or internally inconsistent use of economic assumptions in comparing action versus no action can evidence arbitrary and capricious decision-making under the APA.
- Under the ESA, mitigation measures used to support a no-jeopardy or no-adverse-modification determination must be sufficiently specific, certain to occur, and enforceable; uncertain or nonbinding measures cannot carry the analysis.
- An ESA biological opinion must estimate the amount or extent of take, including nonlethal take, using the best available data (including reasonable ranges or proxies where appropriate) or explain in detail why estimation cannot be done.
- An action agency acts arbitrarily and capriciously when it relies on a biologically and legally deficient ESA consultation product to approve a project.

## Conclusion

The court vacated federal approval of an offshore drilling project because the NEPA analysis failed to provide a reasoned treatment of foreign-consumption greenhouse-gas emissions, and the ESA biological opinion improperly relied on nonbinding mitigation while omitting a required estimate of nonlethal take, rendering BOEM’s reliance on the opinion unlawful.


Ctr. for Biological Diversity v. Bernhardt, 982 F.3d 723 (9th Cir. 2020)