## Facts

- The Department of the Interior conducted offshore oil-and-gas Lease Sale 193 in the Chukchi Sea in February 2008, generating approximately $2.6 billion in high bids.
- Under the Outer Continental Shelf Lands Act and NEPA, the Bureau of Ocean Energy Management (BOEM) prepared a Final Environmental Impact Statement (FEIS) for the lease sale and later a Supplemental EIS (SEIS) after a district-court remand on other grounds.
- For purposes of predicting environmental effects (e.g., spill risk, emissions, and development impacts), BOEM used a resource-and-economics model to estimate economically recoverable oil but ultimately analyzed impacts using a single point estimate: development of an initial offshore field producing one billion barrels.
- The one-billion-barrel figure represented the lowest volume BOEM regarded as still economic, even though BOEM recognized production could vary widely and the record included higher plausible production outcomes.
- Alaska Native and environmental organizations challenged the FEIS/SEIS, arguing BOEM (1) omitted “essential” information required by NEPA regulations and (2) used an arbitrary and capricious production estimate that skewed the environmental analysis.
- The district court upheld BOEM on the production estimate, granted summary judgment to defendants after the SEIS, and allowed the lease sale to stand.

## Issues

1. Whether BOEM violated NEPA and 40 C.F.R. § 1502.22 by failing to include “essential” information in the FEIS/SEIS or by failing to properly address incomplete or unavailable information.
2. Whether BOEM’s one-billion-barrel estimate of economically recoverable oil was arbitrary and capricious under the APA, making the NEPA analysis inadequate.

## Decision

- The Ninth Circuit affirmed the ruling that BOEM did not unlawfully omit “essential” information under 40 C.F.R. § 1502.22.
- The Ninth Circuit reversed the approval of BOEM’s one-billion-barrel production estimate, holding the estimate arbitrary and capricious.
- The court vacated the district court’s judgment and remanded with instructions to remand to BOEM for further NEPA analysis consistent with the opinion.
- A judge concurred as to the “essential information” issue but dissented on the arbitrariness of the production estimate, reasoning that BOEM’s technical judgment warranted deference.

## Legal Principles

- NEPA requires a reasonably thorough discussion of probable environmental consequences; it does not require complete information or certainty, particularly where data are incomplete or unavailable and the agency explains limitations and relies on the best available information.
- Under 40 C.F.R. § 1502.22, when relevant information is incomplete or unavailable, an agency must address the gap in the manner the regulation requires; compliance is evaluated in light of practicality and the record.
- Under the APA, an agency’s foundational assumptions used in NEPA analysis must be rationally selected and adequately explained in light of the record.
- An agency may not base impact analysis on a single low-end scenario that tends to minimize environmental consequences without a reasoned explanation, when higher production outcomes are reasonably foreseeable.

## Conclusion

The Ninth Circuit held that BOEM’s handling of incomplete information satisfied NEPA, but BOEM acted arbitrarily and capriciously by anchoring its environmental analysis to an inadequately explained, low-end one-billion-barrel production estimate; the case was remanded for BOEM to revise its production assumptions and redo the related NEPA analysis.


Native Vill. of Point Hope v. Jewell, 740 F.3d 489 (9th Cir. 2014)