## Facts

- The Bureau of Land Management (BLM) approved the sale of four federal oil-and-gas leases covering about 2,700 acres in Monterey and Fresno Counties, California, within the Monterey Shale region.
- BLM conducted review under the National Environmental Policy Act (NEPA) using an Environmental Assessment (EA) and issued a Finding of No Significant Impact (FONSI), rather than preparing an Environmental Impact Statement (EIS).
- The EA relied heavily on an earlier “single-well development scenario,” projecting that only one exploratory well would likely be drilled.
- Although BLM recognized increased use of hydraulic fracturing (fracking) in the region, the EA did not analyze the environmental effects of fracking, including in combination with horizontal drilling.
- The leases included stipulations addressing endangered species and cultural resources; only two leases included No Surface Occupancy (NSO) provisions limiting surface disturbance absent further authorization.
- Environmental organizations challenged the lease sale under the Administrative Procedure Act, alleging NEPA violations and an independent violation of the Mineral Leasing Act (MLA).
- The parties filed cross-motions for summary judgment seeking declaratory and injunctive relief.

## Issues

1. Whether BLM violated NEPA by failing to take a “hard look” at reasonably foreseeable environmental impacts of fracking and related development when issuing the leases, rendering the EA and FONSI unlawful and requiring an EIS.
2. Whether the lease terms, independent of NEPA, violated the Mineral Leasing Act by failing to include sufficiently specific conservation and waste-prevention constraints at the leasing stage.

## Decision

- The court granted in part and denied in part both parties’ motions for summary judgment.
- The court held BLM violated NEPA because the EA unreasonably relied on a single-well scenario and did not adequately evaluate reasonably foreseeable fracking-related development and impacts.
- Because the EA was deficient, the FONSI and the decision not to prepare an EIS were erroneous as a matter of law.
- The court rejected the MLA claim, holding the lease terms did not independently violate the Mineral Leasing Act.
- The court required further NEPA analysis consistent with its ruling.

## Legal Principles

- NEPA requires an agency to take a “hard look” at the environmental consequences of its action, including reasonably foreseeable future development and cumulative effects.
- An EA cannot lawfully support a FONSI when it understates reasonably foreseeable development or omits analysis of environmental effects that are reasonably foreseeable at the time of the agency commitment.
- Staged NEPA review is permissible only if the earlier-stage analysis is commensurate with the level of development known and anticipated at the time of the initial decision; an agency cannot defer analysis of foreseeable impacts when issuing leases that commit federal lands to development.
- A FONSI is invalid when it rests on a materially deficient EA.
- The Mineral Leasing Act does not necessarily require a specific set of lease stipulations beyond those that preserve agency authority to regulate operations; a NEPA defect in the decisionmaking process does not, by itself, establish that the lease terms are unlawful under the MLA.

## Conclusion

The court held that BLM’s issuance of four Monterey Shale oil-and-gas leases violated NEPA because its EA and FONSI failed to analyze reasonably foreseeable fracking-driven development and related impacts, but it found no independent Mineral Leasing Act defect in the lease stipulations and required additional environmental review.


Ctr. for Biological Diversity v. Bureau of Land Mgmt., 937 F. Supp. 2d 1140 (N.D. Cal. 2013)