## Facts

- Federal agencies considered opening the Palisades Further Planning Area, a 247,000-acre roadless area in the Targhee and Bridger–Teton National Forests, to federal oil and gas leasing.
- The Forest Service prepared an Environmental Assessment and concluded leasing would not significantly affect the environment, so no Environmental Impact Statement was required at the leasing stage.
- The leasing decision divided the area into:
  - “Highly environmentally sensitive” lands leased with No Surface Occupancy (NSO) stipulations (about 80% of the area).
  - Other lands leased without NSO stipulations (about 20% of the area).
- NSO leases barred surface occupancy unless the government later approved surface use, preserving agency discretion to prevent surface disturbance.
- Non-NSO leases did not categorically bar surface disturbance; lessees could seek later approvals for surface-disturbing activities, and lease issuance could constrain the government’s ability to refuse all development without potential liability.
- Sierra Club sued, alleging NEPA required an EIS before issuing leases; on appeal it challenged only the issuance of non-NSO leases without an EIS.

## Issues

1. Whether issuing federal oil and gas leases without NSO stipulations constitutes a major federal action significantly affecting the environment that requires an EIS under NEPA at the leasing stage.
2. Whether issuance of non-NSO leases makes an irreversible and irretrievable commitment of resources by limiting later government discretion to preclude surface-disturbing development.

## Decision

- The court reversed the judgment upholding issuance of leases without NSO stipulations and remanded.
- The court held that issuing non-NSO leases triggered NEPA’s EIS requirement because such leases effectively authorize surface-disturbing development and constrain the government’s ability to prevent it later.
- The court distinguished NSO leases, reasoning that where the government retains authority to bar surface occupancy, the leasing decision does not itself constitute the same level of commitment, allowing later, project-specific review.

## Legal Principles

- NEPA requires an EIS for “major Federal actions significantly affecting the quality of the human environment,” and the analysis must occur at the earliest meaningful point in the decisionmaking process.
- An agency may not postpone EIS preparation until after it has taken action that, as a practical matter, commits it to a development path and narrows its ability to avoid environmental harm.
- Issuing an oil and gas lease without an NSO stipulation can constitute an irreversible and irretrievable commitment of resources because the government may be unable to categorically prohibit surface-disturbing activities later without incurring legal or financial consequences.
- Where lease terms preserve full discretion to deny surface occupancy (such as NSO stipulations), the leasing decision may not require an EIS at issuance, and more detailed NEPA review may occur when concrete surface-use proposals are presented.

## Conclusion

The court held that NEPA required preparation of an EIS before issuing oil and gas leases that lacked NSO stipulations because those leases materially constrained the government’s later ability to prevent surface disturbance, making the leasing decision itself the environmentally significant commitment point.


Sierra Club v. Peterson, 717 F.2d 1409 (D.C. Cir. 1983)