On Petition for Review of a Final Agency Action Bureau of Ocean Energy Management
The opinion of the court was delivered by: Judge Ikuta, Circuit Judge
Argued and Submitted May 15, 2012 Pasadena, California
Before: KOZINSKI, Chief Judge, BEA and IKUTA, Circuit Judges.
In these expedited petitions for review, we consider the allegations of Native Village of Point Hope et al. and Inupiat Community of the Arctic Slope (collectively, "petitioners") that the Bureau of Ocean Energy Management (BOEM) failed to discharge its obligations under the Outer Continental Shelf Lands Act (OCSLA) in approving Shell Offshore Inc.'s plan for exploratory oil drilling in the Beaufort Sea. We have jurisdiction pursuant to 43 U.S.C. § 1349(c), and we deny the petitions.*fn1 I.
This case is the latest chapter in a long-running saga beginning back in April 2002, when the Minerals Management Service (MMS)*fn2 established a five-year lease sale schedule for the outer continental shelf of Alaska. Alaska Wilderness League v. Kempthorne, 548 F.3d 815, 817--18 (9th Cir 2008), vacated, 559 F.3d 916 (9th Cir. 2009), dismissed as moot sub nom. Alaska Wilderness League v. Salazar, 571 F.3d 859 (9th Cir. 2009). Indeed, this is the third time the government has appeared before us to defend its approval of Shell's exploration plan against challenges by many of these same petitioners. We begin by describing the legal framework and factual background for these challenges.
In enacting the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. §§ 1331--1356a, Congress authorized the Secretary of the Interior to lease portions of the outer continental shelf to qualified bidders for the purpose of exploring and developing its oil and gas reserves. Under OCSLA, the Secretary begins by holding a lease sale to identify qualified bidders. Id. §§ 1337, 1344(a). Becoming the successful bidder in a lease-sale auction is merely the first step. Before undertaking exploration activities in the leased area, the winning bidder must obtain the Secretary's approval of an exploration plan, id. § 1340(c)(1), and obtain many other permits and approvals.*fn3 If, after completing such exploration activities, the leaseholder concludes there is potential for developing oil and gas reserves on the leased area, the leaseholder must obtain approval of a development and production plan, id. § 1351(a)(1), as well as obtaining a new round of permits and approvals before pursuing development of the leased area.
Only the exploration plan stage and the leaseholder's obligations under OCSLA are at issue here. In general, the applicable regulations require the leaseholder to submit specified information about its proposed exploration plan.
30 C.F.R. § 550.211--228. Within thirty days of the leaseholder's submission or last modification of the exploration plan, the Secretary "shall approve" the plan if it is consistent with OCSLA, its implementing regulations, and the applicable lease, 43 U.S.C. § 1340(c)(1), unless the Secretary determines that the proposed activity "would probably cause serious harm or damage to life . . . , to property, to any mineral . . . , to the national security or defense, or to the marine, coastal, or human environment," id. § 1334(a)(2)(A)(i), andthat "such proposed activity cannot be modified to avoid such condition," id. § 1340(c)(1); see also 30 C.F.R. § 550.233.
While OCSLA focuses on development of the outer continental shelf, the Clean Water Act § 311, as amended by the Oil Pollution Act of 1990, focuses on the prevention of and response to oil spills. See 33 U.S.C. § 1321. Among other things, § 311 requires a leaseholder to submit an oil spill response plan, which is "a plan for responding, to the maximum extent practicable, to a worst case discharge, and to a substantial threat of such a discharge, of oil or a hazardous substance." Id. § 1321(j)(5)(A)(i). Offshore facilities "may not handle, store, or transport oil unless" the leaseholder's oil spill response plan "has been approved by the President" and the "facility is operating in compliance with the plan." Id. § 1321(j)(5)(F)(i)--(ii).
At the time Shell began its leasing and exploration efforts, MMS was in charge of conducting lease sales, reviewing exploration plans under OCSLA, and approving oil spill response plans under § 311 of the Clean Water Act. Following the Deepwater Horizon oil spill in the Gulf of Mexico in early 2010, the Secretary divided MMS's responsibilities among three new regulatory entities in order to separate the "three distinct and conflicting missions" of (1) promoting resource development, (2) enforcing safety regulations, and (3) maximizing revenues from offshore operations. Press Release, U.S. Dep't of the Interior, Salazar Divides MMS's Three Conflicting Missions (May 19, 2010), available at http://www.doi.gov/news/pressreleases/Salazar-Divides-MMSs-Three-Conflicting-Missions.cfm; see also 76 Fed. Reg. 64,432; DOI Secretarial Order No. 3299. In the reorganization, the Secretary made BOEM responsible for managing the development of offshore resources, including approving a leaseholder's exploration plan under OCSLA and conducting an environmental analysis of that plan under the National Environmental Policy Act (NEPA). See 76 Fed. Reg. at 64,432. The Secretary made the Bureau of Safety and Environmental Enforcement (BSEE) responsible for enforcement of safety and environmental functions, including the oil spill response plan requirements in 30 C.F.R. pt. 254. See 76 Fed. Reg. at 64,448.*fn4 As the regulatory process now stands, BOEM and BSEE are independent entities with separate responsibilities.
Although a winning bidder in the Beaufort Sea lease sale in 2003, Shell has yet to commence exploration activities. In November 2006, Shell submitted an exploration plan for the Beaufort Sea region. Alaska Wilderness League, 548 F.3d at 818. MMS approved Shell's exploration plan in February 2007. Id. at 821. Some of the petitioners here, along with other groups, challenged MMS's approval, and a panel of this court issued a stay pending review, thereby preventing exploration in 2007 and 2008. See id. at 819--20. On November 20, 2008, the panel vacated and remanded MMS's approval. See id. at 835. After Shell filed a petition for rehearing en banc, we issued an order vacating and withdrawing the panel opinion. See Alaska Wilderness League, 559 F.3d at 916.Shortly thereafter, Shell withdrew its exploration plan, and in 2009 we granted Shell's motion to dismiss the petitions as moot. See Alaska Wilderness League,571 F.3d at 859. In June 2009, Shell submitted a new exploration plan that proposed drilling at the Sivulliq and Torpedo prospects in the Beaufort Sea. MMS approved that plan, and in May 2010 we denied expedited petitions challenging that approval. See Native Vill. of Point Hope v. Salazar, 378 F. App'x 747, 748 (9th Cir. 2010) (mem.). Drilling did not commence, however, because soon after the approval the federal government suspended all drilling ...