## Facts

- The Bureau of Land Management (BLM) approved four federal coal leases in Wyoming’s Powder River Basin adjacent to existing mines that collectively supplied a substantial share of domestic coal production.
- For each lease, BLM prepared an Environmental Impact Statement (EIS) under the National Environmental Policy Act (NEPA) and issued a Record of Decision (ROD) approving the lease.
- The EISs compared issuing the leases (preferred action) against denying them (no-action alternative).
- BLM’s greenhouse-gas analysis assumed “perfect substitution”: if the leases were denied, other coal sources would fully replace the coal, leaving coal prices, coal consumption, and resulting national CO₂ emissions unchanged.
- Environmental organizations challenged the approvals under the Administrative Procedure Act (APA), alleging the EISs failed to take a hard look at climate impacts because the substitution assumption lacked record support and ignored contrary information (including portions of an Energy Information Administration report indicating coal demand responds to price).
- The district court upheld BLM’s approvals; the challengers appealed.

## Issues

1. Whether BLM acted arbitrarily and capriciously under the APA by using an unsupported “perfect substitution” assumption that eliminated any difference in national CO₂ emissions between approving and denying the coal leases, contrary to NEPA’s hard-look requirement.
2. If the NEPA analysis was unlawful, whether the proper remedy was vacatur of the leases or remand without vacatur.

## Decision

- The Tenth Circuit reversed the district court in relevant part and held the EISs and RODs were arbitrary and capricious.
- The court concluded BLM failed to take the required hard look at climate impacts because it assumed away market effects of additional coal supply and therefore assumed away emissions differences between action and no-action alternatives.
- The court remanded with instructions for BLM to revise the EISs and RODs to conduct a lawful analysis.
- The court declined to vacate the resulting leases, ordering remand without vacatur.
- A concurring judge agreed remand was appropriate but expressed concern about aspects of the majority’s economic reasoning and judicial review of predictive market judgments.

## Legal Principles

- NEPA requires a reasonably thorough, good-faith analysis of significant environmental consequences and a meaningful comparison of the proposed action to reasonable alternatives.
- Under the APA, an agency acts arbitrarily and capriciously when it fails to examine relevant data, fails to give a reasoned explanation, or ignores evidence that undercuts its conclusions.
- An agency may use predictive assumptions in an EIS, but those assumptions must be supported by the record and cannot contradict basic supply-and-demand logic without a rational explanation.
- An EIS that relies on an unsupported assumption that “zeros out” differences between action and no-action alternatives fails NEPA’s hard-look requirement.
- For remedies in NEPA/APA cases, courts may remand without vacatur when equitable considerations and the possibility of the same ultimate agency decision counsel against disrupting existing authorizations during further analysis.

## Conclusion

The Tenth Circuit held BLM’s coal-leasing approvals unlawful because the EISs used an unsupported “perfect substitution” assumption that foreclosed meaningful analysis of how additional federal coal supply could affect coal consumption and CO₂ emissions; the court remanded for revised NEPA analysis but left the leases in place pending further agency action.


WildEarth Guardians v. U.S. Bureau of Land Mgmt., 870 F.3d 1222 (10th Cir. 2017)