A federal district court has ruled that the Bureau of Land Management (“BLM”) failed to adequately consider climate change when approving a set of oil and gas leases on public lands in Wyoming. The ruling should be of broader interest to developers and energy companies because it offers guidance on how to properly analyze a project’s effects on climate change under the National Environmental Policy Act (“NEPA”). The law in this area remains unsettled –especially since President Trump rescinded the Obama Administration’s formal guidance on NEPA and climate change in 2017. Future developments are likely, and project sponsors should monitor them closely.
At issue in the case are oil and gas leases covering 300,000 acres of public lands in Wyoming. For each lease sale, BLM prepared an environmental assessment to comply with NEPA. The environmental assessments discussed climate change on a “conceptual level,” without quantifying and analyzing the greenhouse gas emissions that would result from the lease sales. The court found the analysis inadequate under NEPA, and it halted drilling under the leases and sent the matter back to BLM for additional environmental review. In its lengthy ruling, the court offered concrete guidance to BLM on how to fix its analysis of greenhouse gas (“GHG”) emissions and climate change on remand, including that:
- BLM should quantify GHG emissions that would result from drilling oil and gas wells on the leased parcels.
- BLM should provide more detail about “downstream” GHG emissions that would result from the consumption of oil and gas produced under the leases.
- BLM should better evaluate the “cumulative” effect of the leases together with other projects, including by comparing GHG emissions from the leases against available emissions forecasts and other BLM programs.
This guidance may also serve as a useful roadmap to NEPA compliance for other projects, particularly other energy projects. And development opponents are likely to use the court’s reasoning to challenge future NEPA documents. Below we break down the court’s direction on three categories of GHG emissions, each requiring a different level of detail. Continue Reading