## Facts

- Shell held federal offshore leases in the Beaufort Sea and submitted a 2011 exploration plan proposing exploratory drilling during the Arctic open-water season.
- The Bureau of Ocean Energy Management (BOEM) approved the plan under the Outer Continental Shelf Lands Act (OCSLA), subject to conditions.
- Key conditions required Shell to obtain approval of a separate oil-spill response plan from the Bureau of Safety and Environmental Enforcement (BSEE) and to demonstrate capability to respond to a worst-case discharge.
- Indigenous and environmental organizations petitioned for review, arguing BOEM relied on unjustified assumptions about Arctic spill-response capacity, including subsea well-capping technology.
- Petitioners pointed to allegedly inconsistent information between earlier spill-response materials (suggesting capping technology was not proven) and the 2011 plan’s reliance on subsea capping and containment.
- The petitions were filed directly in the Ninth Circuit under OCSLA’s judicial review provision and were reviewed under the Administrative Procedure Act (APA) arbitrary-and-capricious standard.

## Issues

1. Whether BOEM acted arbitrarily or capriciously, or otherwise contrary to OCSLA, by approving Shell’s Beaufort Sea exploration plan in light of asserted gaps or inconsistencies regarding spill-response technology and capability.
2. Whether BOEM unlawfully relied on conditional approval and a separate, later-approved spill-response plan administered by BSEE.
3. Whether BOEM inadequately evaluated the risk and environmental consequences of a catastrophic oil spill, including effects on Arctic resources and subsistence uses.

## Decision

- The Ninth Circuit denied the consolidated petitions for review and left BOEM’s approval in effect.
- The court held BOEM reasonably concluded the exploration plan complied with OCSLA and did not pose unmitigable “serious harm or damage” within the meaning of the statute.
- The court upheld BOEM’s use of conditions tying exploration to subsequent spill-response approvals and demonstrations of response capacity.
- The court found BOEM adequately considered spill risks, worst-case discharge scenarios, and mitigation measures, and reasonably addressed technological uncertainty regarding subsea capping.

## Legal Principles

- Under OCSLA’s staged regulatory scheme, exploration-plan approval addresses proposed exploratory activities and is reviewed in that limited context, not as a final approval for development or production.
- The Secretary (through BOEM) must approve an exploration plan that complies with applicable law unless the agency determines the plan would probably cause serious harm or damage that cannot be mitigated.
- APA review of exploration-plan approval is deferential; a court asks whether the agency examined relevant data and provided a reasoned explanation connecting the record to its decision, without substituting judicial judgment on technical matters.
- An agency may lawfully impose conditions on approval and may rely on coordinated processes and the technical judgments of related regulators (including later, separate approvals) when the overall decision remains reasoned and record-based.
- In technical and predictive determinations at the edges of science and technology, courts give heightened deference so long as the agency acknowledges uncertainty and explains its conclusion.

## Conclusion

The Ninth Circuit upheld BOEM’s conditional approval of Shell’s Beaufort Sea exploration plan, concluding that BOEM reasonably evaluated spill risks and mitigation, permissibly relied on later spill-response approvals administered by BSEE, and provided an adequate explanation under OCSLA and the APA’s arbitrary-and-capricious standard.


Native Village of Point Hope v. Salazar, 680 F.3d 1123 (9th Cir. 2012)