In re Shell Gulf of Mexico, Inc., Shell Offshore, Inc. (Frontier Discovery Drilling Unit)

Nitrogen dioxide (NO2) was an air pollutant for which the Environmental Protection Agency (EPA), through its administrator (the administrator), published a national ambient-air-quality standard (NAAQS). On July 15, 2009, the administrator published a proposed rule to supplement the annual NO2 NAAQS with a one-hour NO2 NAAQS to provide required protection for public health (the proposed rule). At the time, the only effective NO2 NAAQS was the annual one. In January and February 2010, Region 10 of the EPA (the region) (defendant) proposed draft permits allowing Shell Gulf of Mexico Inc. and Shell Offshore Inc. (collectively, Shell) (defendants) to conduct exploratory oil-drilling activities off the northern coast of Alaska (the Chukchi and Beauford permits). On February 9, 2010, the administrator published the final one-hour NO2 NAAQS rule (the final rule). Thereafter, the EPA issued the Chukchi and Beauford permits. The permits were issued based on the region’s finding that Shell’s proposed operations did not have a disproportionately high and adverse human-health or environmental effect on a minority population (no-adverse-effects finding) because Shell had demonstrated compliance with the then-effective annual NO2 NAAQS. A few days after the Beauford permit was issued, the final rule became effective. Several environmental groups (plaintiffs) petitioned the EPA’s environmental-appeals board to review the Chukchi and Beauford permits, arguing that the region’s sole reliance on Shell’s compliance with the annual NO2 NAAQS was improper in light of updated scientific evidence showing that compliance with that standard alone was insufficient to protect public health.