In December 2011, the Center for Biological Diversity and the Sierra Club challenged the Bureau of Land Management’s (BLM’s) sale of four oil and gas leases involving California’s Monterey-Santos Shale Formation. They alleged that the BLM violated the National Environmental Policy Act (NEPA) by relying up an outdated environmental assessment (EA) when it issued the leases. The EA was premised upon the assumption that only one exploratory well would be drilled in the area to be leased, and did not address the issue of hydraulic fracturing in much detail. Instead, the BLM noted that it would reserve its detailed analysis of the impacts of fracturing until application for permits to drill (APD) were submitted because analyzing site-specific impacts is more feasible at that point.
In March 2013, the magistrate judge ruled in favor of the two groups by concluding that the BLM violated NEPA when it issued a “finding of no significant impact” (FONSI) because it failed to consider all the “reasonably foreseeable” environmental effects that could result from the lease sale. The BLM had argued that it could not be charged with considering the effects of hydraulic fracturing, because it has no authority to regulate fracturing at the lease sale stage. The magistrate judge disagreed and ruled the BLM should have prepared a full-blown environmental impact statement (EIS) instead of issuing a FONSI based on an EA due to the uncertain impacts of fracturing.
Meanwhile, in mid-April 2013, the groups filed a second lawsuit in the same court over the leasing of nearly 18,000 acres.
Although the magistrate judge found that the BLM had violated NEPA, the magistrate judge did not address the remedy; instead, the magistrate judge set a briefing schedule to address the appropriate remedy. On June 3, 2013, the plaintiffs filed their brief. On June 26, 2013, MSLF filed an amicus curiae brief on behalf of the California Independent Petroleum Association (CIPA), arguing that the lease sale should not be vacated and that the lessees must be joined as parties before their leases may be invalidated. The magistrate judge set a hearing for August 16, 2013, regarding the remedy in the first case and addressing whether the two cases should be consolidated; however, in light of ongoing settlement negotiations, the magistrate judge vacated the hearing on August 1, 2013. On August 5, 2013, the BLM issued a Notice of Intent to prepare an Environmental Impact Statement (EIS) for oil and gas leasing on public lands under the jurisdiction of the Hollister Field Office.
On July 17, 2014, the parties filed a Joint Motion to Stay and Administratively Close the Case. That same day, the Court issued an order staying the action pending notification from the BLM that the activities contemplated in the settlement agreement have been completed and requiring the parties to continue to file status updates every ninety days. Per the terms of the Settlement Agreement, the BLM must prepare a full Environmental Impact Statement (EIS) regarding the 15 oil and gas leases at issue and must also prepare an assessment of the current state of industry practices for well completion and stimulation in California. The BLM has also agreed to suspend the two leases at issue in the first case and has agreed not to issue the 12 leases at issue in the second case until after completion of the EIS. On January 14, 2015, the parties filed a Joint Status Report, indicating that the BLM had received and reviewed public comments on its Notice of Intent to prepare the EIS. On February 4, 2015, the BLM held a workshop to consider the social and economic impacts of federal oil and gas leasing. On April 15, 2015, the parties filed another joint status report. The BLM reported it had drafted the Reasonably Foreseeable Development Scenario and formulated a range of alternatives to be analyzed in the EIS. On July 16, 2015, the parties filed a joint status report, providing only that a contractor continued to work on the draft EIS with the BLM’s assistance.
A joint status report filed January 7, 2016, indicates that the BLM is delayed in issuing the draft EIS because of the preliminary injunction issued in Wyoming v. U.S. Dept. of the Interior, which prohibits the BLM from enforcing its national hydraulic fracturing rules until a final decision is issued. The BLM contends that the draft EIS references the national hydraulic fracturing rules and that the agency must update the draft EIS to reflect the fact that the national hydraulic fracturing rules cannot be implemented at this time. On April 7, 2016, the parties filed a joint status report providing that the BLM is finalizing the draft EIS and hopes to publish the Notice of Availability in May of 2016; however, on June 24, 2016, the U.S. District Court for the District of Wyoming issued its final order holding unlawful and setting aside the BLM’s hydraulic fracturing rule, determining that the BLM lacked authority to regulate hydraulic fracturing on federal lands. Wyo. v. U.S. Dep’t of the Interior, 2:15-cv-043-SWS, 2016 WL 3509415 (June 21, 2016). In its latest joint status report, the BLM provides only that it “must update the draft [EIS] to reflect this order.”
On January 5, 2017, the BLM released the Draft EIS. The next day, the Draft EIS was published in the Federal Register, triggering a 90-day public comment period. Any comments regarding the draft documents are due April 6, 2017. Under the BLM’s preferred alternative, the acreage underlying the 14 non-NSO leases would remain open for oil and gas development, but would be subjected to additional site specific stipulations.