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Court holds that BLM violated NEPA

In its latest client advisory, law firm Burleson LLP notes that on March 31 the US District Court for the Northern District of California, San Jose Division, held that the US Bureau of Land Management (BLM) violated the National Environmental Policy Act (NEPA) in its environmental assessment of federal leases in California by unreasonably relying on an earlier single-well development scenario that failed to adequately consider the development impact of hydraulic fracturing when used in combination with horizontal drilling techniques.

In Center for Biological Diversity v. The Bureau of Land Management, Case No. C11-06174, Docket No. 28, 32 (N.D. Cal. Mar. 31, 2013), the court recently ruled on the parties’ cross motions for summary judgment on the issues of whether the BLM failed to comply with NEPA and the Mineral Leasing Act of 1920 concerning oil and gas leases for approximately 2,700 acres of federal land in Monterey and Fresno counties. In its Order RE Cross-Motions for Summary Judgment, the court not only held that the BLM’s assessment of federal leases violated NEPA and was erroneous as a matter of law, but also that the BLM’s finding of no significant impact based on the assessment and its resulting decision not to prepare an environmental impact statement (EIS) also were erroneous as a matter of law.

The court articulated the narrow posture before it, “the legal question of whether the BLM actions in this case were 'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,’” and not “the policy question of whether fracking in the Monterey Shale or anywhere else is a good thing or a bad thing.”

The court described the obligations placed on federal agencies such as the BLM. Specifically, the agency is required under NEPA to take a “hard look” at “every significant aspect of the environmental impact of a proposed action” and inform the public that it indeed has taken environmental considerations into account before taking action, which is accomplished through the preparation of a detailed environmental impact statement (EIS).

The court concluded that further environmental analysis was necessary and that it was unreasonable for the BLM not to at least consider reasonable projections of drilling in the area that include fracking operations. The BLM ultimately argued that the potential effects of fracking on the parcels at issue are largely unknown. The court agreed, noting that it was this lack of knowledge that made a proper investigation so crucial. The court held that the BLM’s dismissal of any development scenario involving fracking did not provide the “hard look” at the issue that NEPA requires.

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