## Facts

- The Bureau of Land Management (BLM) completed a 2003 basin-wide environmental impact statement (EIS) for oil and gas development in the San Juan Basin that did not analyze modern horizontal drilling and multi-stage hydraulic fracturing in the Mancos Shale.
- Around 2010, BLM began receiving applications for permits to drill (APDs) for horizontal Mancos Shale wells.
- In 2014, BLM prepared a reasonably foreseeable development scenario (RFDS) projecting full development of the Mancos Shale would involve 3,960 new horizontal wells.
- BLM approved more than 300 APDs using short-form environmental assessments (EAs) tiered to the 2003 EIS and issued findings of no significant impact (FONSIs).
- In those EAs, BLM analyzed water use and groundwater effects largely at the individual APD level and treated cumulative water impacts using a scope narrower than the 3,960-well RFDS.
- Environmental organizations sued under the Administrative Procedure Act, alleging NEPA and National Historic Preservation Act (NHPA) violations in BLM’s approval of the APDs; the district court ruled for BLM and operator-intervenors.
- Plaintiffs appealed, challenging (among other matters) cumulative water analysis under NEPA, air/greenhouse gas analysis under NEPA, and BLM’s NHPA Section 106 approach to cultural and historic resources.

## Issues

1. Whether NEPA required BLM’s APD-level EAs to analyze cumulative water-resource impacts at the scale of the 3,960 reasonably foreseeable horizontal wells identified in BLM’s RFDS.
2. Whether BLM’s NEPA analysis of air quality and greenhouse gas emissions for the approved wells was arbitrary and capricious.
3. Whether BLM violated NHPA by defining the area of potential effects (APE) too narrowly and inadequately addressing indirect and cumulative effects on historic properties.
4. If a NEPA violation existed, whether vacatur of the challenged FONSIs and APD approvals was an appropriate remedy.

## Decision

- The court affirmed in part and reversed in part the district court’s judgment.
- The court held BLM violated NEPA by failing to take a hard look at cumulative water impacts associated with the 3,960 reasonably foreseeable Mancos Shale wells identified in the RFDS.
- The court rejected plaintiffs’ NEPA challenges to BLM’s air-quality and greenhouse-gas analysis on the record presented.
- The court affirmed rejection of the NHPA claims, concluding BLM’s APE and Section 106 process were not arbitrary, capricious, or contrary to law.
- The court remanded with instructions to vacate the FONSIs and APD approvals at issue that depended on the inadequate cumulative water analysis and to remand to BLM for further NEPA analysis.

## Legal Principles

- NEPA requires an agency to take a “hard look” at environmental consequences, including cumulative impacts of past, present, and reasonably foreseeable future actions.
- When an agency has identified a large reasonably foreseeable development scenario (here, 3,960 wells), it must provide a reasoned explanation if it limits cumulative analysis to a substantially smaller subset.
- Tiering to an older EIS does not satisfy NEPA where significant new circumstances or information render the earlier analysis incomplete for key impacts.
- Under the Administrative Procedure Act, a FONSI and related approvals may be set aside as arbitrary and capricious when based on a NEPA analysis that omits required cumulative-impact evaluation.
- NHPA Section 106 compliance focuses on effects to historic properties within the agency-defined APE; compliance may be upheld where the agency follows a reasonable protocol and consultation process.

## Conclusion

The Tenth Circuit held that BLM’s APD-level NEPA reviews unlawfully failed to analyze cumulative water impacts at the scale of BLM’s own 3,960-well development forecast, requiring vacatur of the challenged FONSIs and drilling approvals and remand for additional NEPA analysis, while leaving BLM’s air-emissions analysis and NHPA process intact.


Diné Citizens Against Ruining Our Environment v. Bernhardt, 923 F.3d 831 (10th Cir. 2019)