Center for Biological Diversity v. Bernhardt

Hilcorp Alaska, LLC (Hilcorp) planned to drill for oil off the Alaskan coast using an offshore drilling facility. Hilcorp presented its plan, known as the Liberty project, to the Bureau of Ocean Energy Management (BOEM) (defendant) for the necessary approval. Under the National Environmental Policy Act, the approval process required BOEM to issue an environmental-impact statement (EIS) that evaluated the project’s environmental consequences and compared them to the consequences of other drilling alternatives and a no-action alternative in which no drilling was permitted. Counterintuitively, BOEM’s EIS concluded that the no-action alternative would result in more carbon-dioxide emissions than the Liberty project because (1) the oil substituted for the oil not produced by the Liberty project would be produced in places with weaker environmental protections and (2) the transportation of that oil to the United States would increase transportation emissions. When calculating the likely emissions from the Liberty project, BOEM did not include emissions from the likely increase in foreign oil consumption that would result from Liberty increasing the global oil supply, which would lead to decreased oil prices. After BOEM approved the Liberty project, the Center for Biological Diversity (CBD) (plaintiff) sued BOEM, alleging that BOEM’s omission of foreign-consumption information was arbitrary and the project approval should therefore be set aside under the Administrative Procedure Act (APA). BOEM argued, consistent with a brief statement in the EIS, that projections concerning foreign consumption were omitted due to a lack of reliable information. However, CBD presented evidence of various studies that confirmed a likely impact on foreign consumption and described means of estimating that impact. The court considered the parties’ arguments.