A circuit court ruling issued last Friday regarding potential mining in Wyoming may provide ammunition to groups challenging environmental reviews of oil, gas and coal leases for not considering the impacts on climate change.
A three-judge panel of the U.S. Court of Appeals for the Tenth Circuit ruled that the Bureau of Land Management (BLM) failed to consider adequately the carbon dioxide (CO2) emissions for four large coal leases in Wyoming’s Powder River Basin (PRB). The case is WildEarth Guardians et al v. BLM, No. 15-8109.
WildEarth and the Sierra Club are seeking to prevent BLM’s approval of four leases that would expand the Black Thunder and North Antelope-Rochelle strip mines near Wright, WY. Coalbed methane also is developed in the PRB by exploration and production companies.
The plaintiffs brought claim using the Administrative Procedure Act, arguing that BLM failed to comply with the National Environmental Policy Act (NEPA) when it concluded that issuing the leases would not result in higher CO2 emissions than would declining to issue them.
The U.S. District Court for the District of Wyoming upheld the leases. The appeals court did not vacate the leases. However, the panel reversed and remanded the decision, with instructions to BLM to revise its environmental impact statements (EIS) and records of decisions.
The circuit court rejected BLM's argument that leasing would have no significant impact on emissions because of steady U.S. demand. BLM, arguing a “perfect substitution” theory, said demand for coal would remain static even in the face of the potential reduction in supply. If the coal were not mined in the PRB, said BLM, the same amount of coal would be mined elsewhere.
However, the appeals panel concluded that BLM’s approach contradicts basic economic principles and violates NEPA.
"Even if we could conclude that the agency had enough data before it to choose” between leasing and not leasing, “we would still conclude this perfect substitution assumption is arbitrary and capricious because the assumption itself is irrational,” said the panel.
The circuit court’s opinion, written by Clinton appointee Judge Mary Beck Briscoe, is “contrary to basic supply and demand principles.”
BLM’s assertion that coal would be mined elsewhere if the leases were thrown out is incorrect because PRB coal generally is less expensive than coal produced elsewhere in the continental United States, the panel noted. BLM’s analysis did not account for price differences.
Referring to data compiled by the U.S. Energy Information Administration (EIA), the appellate court said “when coal carries a higher price, for whatever reason that may be, the nation burns less coal in favor of other sources. A force that drives up the cost of coal could thus drive down coal consumption."
Reagan appointee and Senior Judge Bobby Baldock wrote in a concurring opinion, “Lessened demand for coal results in less use of coal, which results in less impact on the climate.”
BLM’s EIS relied on various governmental reports, including the EIA’s Annual Energy Outlooks for 2008, 2009 and 2010. Under the EIA’s projections of seven to 10 years ago, coal’s share of the energy mix continued to represent the largest portion of the U.S. energy mix. (EIA has since projected that natural gas will overtake coal as the largest portion of the U.S. energy mix.)
In remanding the case back to the Wyoming district court, the panel said the issue is “fairly narrow, and the district court may opt to vacate BLM’s lease approval or “fashion some narrower form of injunctive relief.”
Plaintiffs cheered the ruling.
“This is a major win for climate progress, for our public lands, and for our clean energy future,” said WildEarth’s Jeremy Nichols, climate and energy program director. ““It also stands as a major reality check to President Trump and his attempts to use public lands and coal to prop up the dying coal industry at the expense of our climate.”
Sierra Club attorney Nathaniel Shoaff said a similar substitution analysis is included in every coal lease review BLM has handled in the past few years, and “every one of those decisions is now called into question…”