D.C. Circuit Remands Environmental Assessments for Wyoming Oil and Gas Leases to BLM to Consider GHG Emissions

On March 19, 2019, the U.S. District Court for the District of Columbia granted in part plaintiff nongovernmental organizations' motion for summary judgment, remanding nine environmental assessments ("EAs"), and corresponding findings of no significant impact ("FONSIs"), to the U.S. Bureau of Land Management ("BLM") to further consider the climate change impacts of oil and gas leasing operations BLM authorized on federal land in Wyoming. WildEarth Guardians v. Zinke, No. 16-1724 (D.D.C. Mar. 19, 2019).

The first issue addressed by the court was whether the plaintiffs had standing to bring the challenge. While plaintiffs' challenge to the lease authorizations was based on an allegation that BLM failed to adequately consider the climate change impacts of the leases as required under the National Environmental Policy Act ("NEPA"), the court found plaintiffs had standing based on the alleged aesthetic injuries to two individuals caused by drilling rigs and associated haze and dust in areas of Wyoming that the individuals said they had visited and planned to visit again.

In addressing the merits of plaintiffs' argument, the court found that it was BLM's duty to assess the reasonably foreseeable impacts of greenhouse gas ("GHG") emissions at the leasing stage because BLM would not be able to fully prevent GHG emissions from oil and gas operations once leases were issued. While BLM argued that attempting to assess such impacts would be too speculative, the court found that the information BLM had on the number of wells to be developed—as well as the GHG emissions from each well; the GHG emissions produced by all wells overseen by certain field offices; and the GHG emissions produced by all wells in Wyoming—was sufficient to reasonably quantify the GHG emissions from development of the leased parcels in the aggregate.

The court also found that BLM must consider: (i) the downstream use of oil and gas as a reasonably foreseeable effect of oil and gas leasing; and (ii) the cumulative impact of GHG emissions from all of BLM's lease sales throughout the country, past, present, and foreseeable future. BLM need not, however, use the social cost of carbon protocol to specifically monetize climate change impacts at the leasing stage.

The court's ruling that NEPA requires BLM to undertake a more robust analysis of GHG emissions associated with the leases—both in terms of the direct emissions from the oil and gas operations on the leased land and the indirect emissions from downstream use—does not mean that these (and future) leases will not ultimately be authorized. Indeed, the court denied plaintiffs' request for vacatur, instead remanding EAs and FONSIs to BLM, because the probability that BLM will be able to justify its authorization of the leases is sufficiently high. But BLM must take this obligation seriously, as the court retained jurisdiction over the matter should plaintiffs seek to argue that BLM's work on remand still does not fulfill NEPA's requirements.

Australian Court Rejects Proposed Coal Mine in Gloucester Valley, New South Wales

Citing significant adverse social impacts, the Land and Environment Court of New South Wales recently rejected Gloucester Resources Pty. Ltd.'s ("GRL") appeal of the Minister for Planning's refusal of a state significant development application for consent for the Rocky Hill Coal Project (the "Project"), a proposed new open cut coal mine in the Gloucester Valley in New South Wales, Australia, which would produce 21 million tonnes of coking coal over 16 years. Gloucester Resources Pty. Ltd. v. Minister for Planning [2019] NSWLEC 7 (8 February 2019).

Gloucester Groundswell Inc., a local community action group, was allowed to join as a party to the proceedings and submitted that the Project should be refused because the GHG emissions from the Project would adversely impact measures to limit anthropogenic climate change.

GRL did not contest that climate change is real or that anthropogenic GHG emissions must be reduced rapidly in order to meet the internationally agreed temperature targets of 1.5 or 2 degrees Celsius, but did contest that the Project needs to be refused in order to achieve these targets. The Court disagreed, finding that:

  • Refusing approvals for new coal mines that will produce substantial new GHG emissions is a legitimate way to assist in achieving targets set by international agreements.

  • Although the aggregate estimated GHG emissions over the life of the Project represent a small fraction of total global GHG emissions, the Project is a sizeable individual source that will contribute cumulatively to global GHG emissions. Aggregate Scope 1, 2, and 3 emissions (covering both direct and various types of indirect emissions) over the life of the Project are estimated to be at least 37.8 Mt CO2-e.

  • GRL presented no evidence of any specific plans to net out GHG emissions and make the Project carbon neutral. The Court, therefore, rejected as speculative and hypothetical the argument that the Project will not necessarily exceed the carbon budget because emissions can be reduced in other ways.

  • The Project is unnecessary because other existing and approved coal mines can meet the future demand for coking coal. Relying on Dutch and U.S. cases, the Court rejected the argument that GHG emissions will occur whether or not the Project is approved because of market substitution (opening of mines in countries with lower environmental standards) and carbon leakage. The Court ignored prior Australian cases that have accepted the market substitution argument.

In short, the Chief Judge found that an open cut coal mine in this part of the Gloucester Valley would be in the wrong place at the wrong time. Wrong place because an open cut coal mine in this scenic and cultural landscape, proximate to many people's homes and farms, will cause significant planning, amenity, visual, and social impacts. Wrong time because the GHG emissions of the coal mine and its coal product will increase global total concentrations of GHGs at a time when a rapid and deep decrease in GHG emissions is urgently needed to meet generally agreed climate targets.

This case does not mean that a coal mine proposal in New South Wales will never be approved. But for a project proponent to obtain consent for any new coal mine proposal, the project must demonstrate significant net benefits and provide meaningful mitigation measures.

UK Coal Mining Planning Applications: Recent Cases

The potential impact of two new coal mining projects on climate change has recently been considered by separate UK decision makers.

In March 2018, then UK Secretary of State for Housing, Communities & Local Government, Sajid Javid, refused a planning application for a three million-tonnes open cast coal mine in Northumberland. He cited reasons that GHG emissions from the proposed development would adversely impact measures to limit climate change, departing from the appointed planning inspectorate's recommendation to approve the scheme.

In his decision letter, the secretary of state said: "He agreed that GHG emissions would be emitted in the short-term resulting in an adverse effect of substantial significance, reducing to minor significance in the medium-term; and that greenhouse gas emissions in the long-term would be negligible, but that the effects of carbon in the atmosphere would have a cumulative effect in the long-term. Given that accumulative affect, and the importance to which the Government affords combatting climate change, he concludes that overall the scheme would have an adverse effect on greenhouse gas emissions and climate change of very substantial significance, which he gives very considerable weight in the planning balance."

While this ruling was commended by environmental campaigners, the developer sought judicial review, and in December 2018, the High Court quashed the secretary of state's decision. It found that, among other things, he had erred in his decision by giving considerable weight to the adverse effects of GHG emissions. The Court decided that the Secretary of State had agreed to many of the planning inspectorate's findings on the proposal—for example, that there was a need for coal to meet the UK's energy needs and that there was a window within which coal from the proposed development would be used for that purpose—but reached a very different decision and had given inadequate reasons. This included the failure to explain how the UK's energy needs would be met by low carbon sources instead of coal. The application is now due to be reconsidered by a new secretary of state.

In contrast, planning permission for a deep coal mine project was granted by Cumbria County Council in March 2019. The developer will have permission to extract nearly 2.5 million tonnes of coal a year, mainly from under the seabed at Whitehaven, resulting in the release of an estimated 450 million tonnes of carbon dioxide over the 50-year lifespan of the project. The "coking coal" to be extracted will be used in the manufacture of steel. In GHG emissions terms, the argument put forward was that, because the coal would be used in the United Kingdom or Western Europe, it would actually reduce the need to import product from much further afield—the principal sources being the United States, Russia, and Australia. The applicant argued that this would save 5.3 million tonnes of carbon dioxide in transportation emissions over 50 years and, therefore, weighed in favor of the proposals when assessing its overall impact—this, at a time when the UK National Planning Policy Framework suggests that councils should be wary about coal-related projects and that planning permission should not be granted unless "the proposal is environmentally acceptable" or "if it provides national, local or community benefits which clearly outweigh its likely impacts."