Dine Citizens Against Ruining Our Environment v. Bernhardt

          Appeal from the United States District Court for the District of New Mexico (D.C. No. 1:15-CV-00209-JB-LF)

          Samantha Ruscavage-Barz, WildEarth Guardians, Santa Fe, New Mexico (Kyle J. Tisdel, Western Environmental Law Center, Taos, New Mexico, with her on the briefs), appearing for Appellants.

          Avi Kupfer, U.S. Department of Justice, Environment & Natural Resources Division, Washington, D.C. (Michael C. Williams, Of Counsel, Attorney-Advisor, Office of the Solicitor, U.S. Department of the Interior, Clare M. Boronow, and Mark R. Haag, U.S. Department of Justice, Environment & Natural Resources Division, Washington, D.C., on the brief), for the Defendants-Appellees.

          Hadassah M. Reimer, Holland & Hart LLP, Jackson, Wyoming (Stephen G. Masciocchi, and John F. Shepherd, Holland & Hart LLP, Denver, Colorado, Bradford Berge, Holland & Hart LLP, Santa Fe, New Mexico, Rebecca W. Watson, Welborn Sullivan Meck & Tooley, P.C., Denver, Colorado, Stephen Rosenbaum, Covington & Burling, LLP, Washington, D.C., and Jon J. Indall, Comeau Maldegen Templeman & Indall LLP, Santa Fe, New Mexico, with her on the brief), appearing for Intervenors-Appellees.

          Before BRISCOE, McKAY, and HOLMES, Circuit Judges.

          BRISCOE, CIRCUIT JUDGE

         In this case, we are asked to decide whether the Bureau of Land Management violated the National Historic Preservation Act (NHPA) and the National Environmental Policy Act (NEPA) in granting more than 300 applications for permits to drill horizontal, multi-stage hydraulically fracked wells in the Mancos Shale area of the San Juan Basin in northeastern New Mexico. Appellants^[1] sued the Secretary of the Department of the Interior, the Bureau of Land Management, and the Secretary of the BLM, alleging that the BLM authorized the drilling without fully considering its indirect and cumulative impacts on the environment or on historic properties. The district court denied Appellants a preliminary injunction, and we affirmed that decision in 2016. After merits briefing, the district court concluded that the BLM had not violated either NHPA or NEPA and dismissed Appellants' claims with prejudice. Appellants now appeal.

         We have jurisdiction under 28 U.S.C. § 1291 and affirm in part, reverse in part, and remand with instructions.

         I

We summarized the underlying facts in the prior appeal.

The San Juan Basin is a large geographic region in the southwestern United States, including part of New Mexico. Drilling for oil and gas has occurred in the Basin for more than sixty years, and the Basin is currently one of the most prolific sources of natural gas in the country. The Basin includes both public and private lands. Many of the public lands and resources fall under the jurisdiction of the Bureau of Land Management's Farmington Field Office in New Mexico, which manages these lands and resources under its published Resource Management Plan.

In 2000, the BLM initiated the process of revising its existing RMP, which had been published in 1988. As part of this process, the BLM contracted with the New Mexico Institute of Mining and Geology to develop a "reasonably foreseeable development scenario," or RFDS, to predict the foreseeable oil and gas development likely to occur over the next twenty years. Based on historic production data and available geologic and engineering evidence, the RFDS estimated that 9, 970 new oil and gas wells would be drilled on federally managed lands in the New Mexico portion of the San Juan Basin during this time period. Of these wells, the RFDS estimated that more than forty percent would be "Dakota, Mancos" gas wells-wells that could produce gas from both the Mancos geologic horizon and the Dakota geologic horizon that lies below it. The RFDS estimated that only 180 new oil wells would be drilled in the Mancos Shale, due to the fact that most reservoirs in the Mancos Shale were approaching depletion under then-current technologies, but it noted that there is excellent potential for the Mancos to be further evaluated.

In 2003, the BLM issued its Proposed Resource Management Plan and Final Environmental Impact Statement ([2003 EIS]). In this document, the BLM referred to the predictions and analysis contained in the RFDS in order to assess four proposed alternatives for managing federal lands in the San Juan Basin, including the "balanced approach" the agency ultimately decided to adopt. Under this balanced approach, the BLM analyzed the cumulative impacts of an estimated 9, 942 new wells in the San Juan Basin-approximately the same number predicted in the 2001 RFDS-by looking at, for instance, the likely air quality impacts from the drilling and operation of this many new wells in the region. The [2003 EIS] did not discuss specific sites or approve any individual wells, although it assumed the majority of new wells would be drilled in the high development area in the northern part of the managed area. The BLM issued its final RMP,

         adopting the Alternative D balanced approach, in December 2003. Diné Citizens Against Ruining Our Env't v. Jewell (Diné II), 839 F.3d 1276, 1279-80 (10th Cir. 2016) (citations omitted).

         Although the 2003 EIS analyzed oil and gas drilling in the San Juan Basin generally, operators wanting to drill new wells in the area must seek and receive approval for specific drilling via an application for a permit to drill (APD) submitted to the BLM. When the BLM receives an APD, it prepares an environmental assessment (EA) examining the environmental impacts of the proposed drilling. The EA must include an analysis of the direct, indirect, and cumulative effects of the proposed drilling. See 40 C.F.R. §§ 1508.7, 1508.8. The EA process results in one of three outcomes: (1) a conclusion that the proposed action would result in a significant environmental impact, necessitating an EIS, (2) a conclusion that the proposed action would not result in a significant environmental impact-a "finding of no significant impact" (FONSI), or (3) a conclusion that the proposed action will not go forward. 43 C.F.R. § 46.325. Even if a proposed action will have significant effects, the EA may still result in a FONSI if it is tiered to a broader environmental analysis that fully analyzed those significant effects. Id. § 46.140(c).

         Beginning in 2010, the BLM began receiving APDs for drilling in the Mancos Shale. Development interest in the area increased quickly, and between early 2012 and April 2014, seventy new wells were completed in the Mancos Shale area. In 2014, recognizing the potential for additional Mancos Shale development, the BLM had a new RFDS prepared to evaluate the Mancos Shale's potential for oil and gas development. The 2014 RFDS estimates that full development of the Mancos Shale would result in 3, 960 new wells.

         The 2014 RFDS predicts that new drilling in the Mancos Shale will be done largely, if not entirely, by horizontal drilling and multi-stage hydraulic fracturing. "A horizontally drilled well starts as a vertical or directional well, but then curves and becomes horizontal, or nearly so, allowing the wellbore [i.e., drilled hole] to follow within a rock stratum for significant distances and thus greatly increase the volume of a reservoir opened by the wellbore." Wyoming v. Zinke, 871 F.3d 1133, 1137 (10th Cir. 2017) (alteration in original) (quotations omitted). Hydraulic fracturing is a process designed to "maximize the extraction" of oil and gas resources. JA1912. Fluids, usually water with chemical additives, "are pumped into a geologic formation at high pressure." Id. When the pressure "exceeds the rock strength," it creates or enlarges fractures from which oil and gas can flow more freely. Id. After the fractures are created, a "propping agent (usually sand) is pumped into the fractures to keep them from closing." Id.

As we noted previously,

These new drilling techniques have greatly increased access to oil and gas reserves that were not previously targeted for development and have given rise to much higher levels of development in the Mancos Shale than the BLM previously estimated and accounted for. Moreover, horizontal drilling and multi-stage fracturing may have greater environmental impacts than vertical drilling and older fracturing techniques.

Diné II, 839 F.3d at 1283.

         Hydraulic fracturing is common in the San Juan Basin and has been used there in some form since the 1950s. Horizontal drilling, however, is relatively new. At the time the 2003 EIS issued, "[h]orizontal drilling [wa]s possible but not [then] applied in the San Juan Basin due to poor cost[-]to[-]benefit ratio." JA746. The environmental impacts considered in the 2003 EIS were therefore based on the impacts associated with vertical drilling, not horizontal drilling. But the 2003 EIS noted that "[i]f horizontal drilling should prove economically and technically feasible in the future, the next advancement in horizontal well technology could be drilling multi-laterals or hydraulic fracturing horizontal wells." Id.

         Since the 2003 EIS issued, 3, 945 of the 9, 942 contemplated vertical wells have been drilled in the San Juan Basin. The BLM continues to receive and approve APDs for horizontal Mancos Shale wells. Appellants' initial petition in the district court challenged "at least 130" Mancos Shale APDs approved by the BLM. JA2449. Over the course of this litigation, Appellants amended their petition three times to account for additional granted APDs. Their final petition challenged "at least 351" APDs.^[2] JA2701.

         In 2015, Appellants filed their first Petition for Review of Agency Action (Petition) in district court, challenging the BLM's issuance of APDs as violative of NEPA and NHPA. Appellants named as defendants the Secretary of the United States Department of the Interior, BLM, and the Director of BLM (collectively, Federal Appellees). A group of oil companies (DJR Energy Holdings, LLC, BP America Production Company, American Petroleum Institute, Anschutz Exploration Corporation, and Enduring Resources IV, LLC), each of which owns leases or drilling permits in the Mancos Shale intervened as defendants (collectively, Intervenor Appellees).

         Appellants moved for a preliminary injunction, which the district court denied. See Diné Citizens Against Ruining Our Env't v. Jewell (Diné I), No. CIV 15-0209, 2015 WL 6393843 (D.N.M. Sept. 16, 2015). This court upheld the denial on appeal. Diné II, 839 F.3d 1276. In district court, Appellants amended their Petition three times to add additional challenged APDs. Appellants' operative Third Supplemented Petition alleges, as relevant on appeal: (1) a NEPA violation for improperly tiering the EAs to the 2003 EIS; (2) a NEPA violation for failing to prepare an EIS or supplement an existing EIS; and (3) a NHPA violation for failing to complete Section 106 consultation. Appellants sought vacatur of all the challenged APDs and an injunction against all "future horizontal drilling or hydraulic fracturing in the Mancos Shale" until the BLM complied with NHPA and NEPA. JA2743.

         In April 2017, Appellants sought judgment in the district court. On April 23, 2018, the district court ruled against Appellants and dismissed their claims with prejudice. The district court made the following relevant rulings: (1) Appellants have standing to pursue their claims; (2) Appellants do not establish a NEPA violation; and (3) Appellants do not establish a NHPA violation.

         Appellants timely appealed, raising two issues. First, they contend that the BLM violated NHPA because it "failed to analyze the indirect and cumulative impacts of the challenged Mancos Shale drilling permits on cultural sites in the Greater Chaco Landscape." Aplts. Br. at 1 (footnote omitted). Second, they argue that the BLM violated NEPA because it "failed to analyze the cumulative impacts of the challenged Mancos Shale drilling permits on environmental resources in the Greater Chaco Landscape." Id. at 2. Appellants seek vacatur of the challenged APDs and a permanent injunction against "any further ground-disturbing activities on the challenged APDs until BLM complies with the NHPA and NEPA." Id. at 51.

         Federal Appellees assert, as they did in the district court, that Appellants lack standing to challenge the relevant agency actions.

         II

         The BLM is subject to two statutes relevant on appeal: the National Historic Preservation Act and the National Environmental Policy Act. "NHPA[] . . . is a procedural statute requiring government agencies to stop, look, and listen before proceeding when their action will affect national historical assets." Coal. of Concerned Citizens to Make Art Smart v. Fed. Transit Admin. of U.S. Dep't of Transp. (Concerned Citizens), 843 F.3d 886, 905 (10th Cir. 2016) (quoting Presidio Historical Ass'n v. Presidio Trust, 811 F.3d 1154, 1169 (9th Cir. 2016)). NHPA was enacted "to foster conditions under which our modern society and our historic property can exist in productive harmony and fulfill the social, economic, and other requirements of present and future generations." 54 U.S.C. § 300101(1).

         NEPA is also a procedural statute. It requires agencies to "pause before committing resources to a project and consider the likely environmental impacts of the preferred course of action as well as reasonable alternatives." N.M. ex rel. Richardson v. Bureau of Land Mgmt., 565 F.3d 683, 703 (10th Cir. 2008). NEPA has twin aims:

First, it places upon an agency the obligation to consider every significant aspect of the environmental impact of a proposed action. Second, it ensures that the agency will inform the public that it has indeed considered environmental concerns in its decisionmaking process.

Forest Guardians v. U.S. Fish & Wildlife Serv., 611 F.3d 692, 711 (10th Cir. 2010) (quoting Balt. Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S 87, 97 (1983)).

         Neither NEPA nor NHPA "provide a private right of action," so we review the two decisions as "final agency action[s] under the" APA. Utah Envtl. Cong. v. Russell, 518 F.3d 817, 823 (10th Cir. 2008). We apply the same standard of review as the district court: the familiar "arbitrary and capricious" standard. Richardson, 565 F.3d at 704-05; 5 U.S.C. § 706(2)(A). An agency's decision is arbitrary and capricious if the agency:

(1) entirely failed to consider an important aspect of the problem, (2) offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise, (3) failed to base its decision on consideration of the relevant factors, or (4) made a clear error of judgment.

Richardson, 565 F.3d at 704 (citations and quotations omitted). "A presumption of validity attaches to the agency action and the burden of proof rests with [the parties] who challenge such action." Citizens' Comm. to Save Our Canyons v. Krueger, 513 F.3d 1169, 1176 (10th Cir. 2008) (quoting Colo. Health Care Ass'n v. Colo. Dep't of Soc. Servs., 842 F.2d 1158, 1164 (10th Cir. 1988)). Our deference to the agency is "especially strong where the challenged decisions involve technical or scientific matters within the agency's area of expertise." Morris v. U.S. Nuclear Reg. Comm'n, 598 F.3d 677, 691 (10th Cir. 2010) (quoting Russell, 518 F.3d at 824).

         III

         Because standing is jurisdictional, we must first determine whether Appellants have standing to bring their claims. The district court concluded that Appellants have standing, and we review that determination de novo. S. Utah Wilderness All. v. Palma, 707 F.3d 1143, 1152 (10th Cir. 2013).

         When, as here, an organization sues on behalf of its members, the organization has standing if:

(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.

Hunt v. Wash. State Apple Advert. Comm'n, 432 U.S. 333, 343 (1977). Federal Appelles do not argue that the interests Appellants seek to protect are not germane to the organizations' purposes, nor do they argue that the participation of individual members is required.^[3] Our standing inquiry is therefore limited to whether any of Appellants' members "have standing to sue in their own right." Id. We conclude that they do.

To establish standing, a plaintiff must show:

(1) it has suffered an "injury in fact" that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

Friends of the Earth v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2013). At the summary judgment stage, Appellants must "set forth by affidavit or other evidence specific facts, which for purposes of the summary judgment motion will be taken to be true." Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992) (citations and quotations omitted).

         A

         The injury-in-fact prong of our standing analysis "breaks down into two parts." Comm. to Save the Rio Hondo v. Lucero, 102 F.3d 445, 449 (10th Cir. 1996). Appellants must show that (1) "in making its decision without following [NEPA's] procedures, the agency created an increased risk of actual, threatened, or imminent environmental harm," and (2) "the increased risk of environmental harm injures [the litigant's] concrete interests by demonstrating either its geographical nexus to, or actual use of the site of the agency action." Id. Appellants have satisfied both requirements.

         1

         Under NEPA, "an injury of alleged increased environmental risks due to an agency's uninformed decisionmaking may be the foundation for injury in fact under Article III." Id. Here, the allegedly uninformed decisions Appellants challenge are the BLM's approval of hundreds of APDs in the Mancos Shale without considering the indirect and cumulative impacts to cultural sites and environmental resources. Aplts. Br. at 1-2. Appellants have sufficiently tied the BLM's challenged decisions to increased environmental risks.

         Eisenfeld, a member of San Juan Citizens and WildEarth, asserts that the "Mancos Shale APD authorizations . . . impact[] the visual landscape, night sky, solitude and quiet, [and] public health and safety." JA343. Nichols, a member of WildEarth, states that "[w]ith the increase in oil and gas development has come light pollution, more truck traffic, drilling rigs sticking up from the land, smells, dust, and more industrialization." JA615. He asserts that recently,

the impacts of Mancos shale oil development have become more visible, offensive, and degrading of [his] recreational enjoyment of public lands in the area. The new development has brought more drilling rigs, flaring, truck traffic, road building, pipeline construction, the construction and operation of more tanks and production facilities, and just overall more oil and gas industry presence in the area.

JA607-08. These facts are sufficient to establish "an increased risk of environmental harm due to [the BLM's] alleged uninformed decisionmaking," and they satisfy the first prong of our injury-in-fact analysis. Lucero, 102 F.3d at 451.

         Federal Appellees argue that Appellants fail on this prong of the standing analysis because the 2003 EIS examined the effects of "drilling 9, 942 wells using conventional techniques," and Appellants have not shown that the challenged Mancos Shale APDs "will increase the risk of environmental harm in a manner or to a degree not already considered." Fed. Aples. Br. at 26. This argument conflates the standing analysis with the merits analysis.

         As discussed, Appellants have submitted affidavits that show an increase in environmental harm from drilling activities in the Mancos Shale area; this satisfies the first prong of our injury-in-fact analysis. Whether that environmental harm is of a manner or to a degree not already considered in the 2003 EIS is a question that goes to the merits of Appellants' NEPA claim. Appellants, of course, need not prove the merits of their claim in order to establish standing. See, e.g., Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89 ("It is firmly established in our cases that the absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction . . . .").

         2

         Standing "also requires a plaintiff be among the injured." Lucero, 102 F.3d at 449. Therefore, Appellants "must be able to show that a separate injury to [their] concrete, particularized interests flows from the agency's procedural failure." Id. (citing Lujan, 504 U.S. at 572). To demonstrate harm to a plaintiff's concrete interests, the plaintiff must "establish either its geographic nexus to, or actual use of the site where the agency will take or has taken action such that it may be expected to suffer the environmental consequences of the [challenged] action." Id. (quotations omitted).

         Appellants' members' affidavits show a geographic nexus to the affected areas sufficient to satisfy the second prong of our injury-in-fact analysis. Eisenfeld states that he "regularly visit[s] the greater Chaco region, including areas in and around Counselor, Lybrook, and Nageezi," and that he "intend[s] to go back [to Nageezi] in May and June of 2017."^[4] JA338. He also states that he has "visited hundreds of well sites in the [Greater Chaco] area, and ha[s] frequented lands where many other Mancos Shale wells are in view." JA342.

         Nichols regularly visits the Greater Chaco region "for recreational enjoyment." JA348. He describes visiting Pueblo Pintado, Chaco Culture National Historical Park (Chaco Park), Nageezi, and Pueblo Alto. Nichols "intend[s] to continue visiting the Greater Chaco region, including [Chaco Park] and its outliers, as well as public lands in the region, at least once a year for the foreseeable future," and had a trip planned for "late June 2017." JA351.

         Kendra Pinto, a member of Diné, lives in Twin Pines, New Mexico, which is "located along Highway 550, at the county line of San Juan and Rio Arriba." JA617. Beginning in 2013, she noticed a "major increase in Halliburton trucks along 550, and at the intersection of 7900 and 7950, trucks are staging right off the highway and even on the county road blocking traffic." JA618. She "pass[es] through areas that are very potent in natural gas odors," and has "seen the giant pillars of fire for the flaring the sites do." ...