Judicial Scrutiny of Climate Analysis Under NEPA Intensifies With Latest Decision from Judge Contreras

The latest in a series of decisions by the US federal district court in DC, Judge Contreras has again found fault with the Interior Department’s impacts analysis of greenhouse gas (GHG) emissions under the National Environmental Policy Act (NEPA). While previous decisions focused on Interior’s onshore leasing program, the latest decision concerns offshore leasing in the Gulf of Mexico—specifically, Lease Sale 257 held last November in the wake of an injunction issued by a federal district court in Louisiana against Biden’s leasing moratorium, which was the subject of a recent client alert. This latest decision scrutinizes the agency’s analysis on an even more granular level than prior decisions, and goes one step further than prior decisions in vacating the entire lease sale, which will require a new lease sale in the future to lease the same tracts again following supplemental NEPA review on remand. 

Notably, the court brushed aside the “most persuasive argument the parties raise” against vacatur—that lease sale participants have already disclosed their confidential valuation of the unleased tracts giving their competitors an unfair advantage of knowing not only the tracts they have targeted for potential development, but also the value they place on those tracts, raising serious concerns about the fairness of competition in any subsequent effort to re-lease these same tracts. Ultimately, the court concluded that the government’s no action alternative failed to quantify the GHG emissions associated with a report from the Stockholm Environment Institute predicting a future decrease in foreign consumption, which the court found to be such a “serious failing” under NEPA that it justified disregarding industry’s concerns regarding the effect of vacating the sale.

A copy of the decision can be found here. More detailed analysis of this decision will be forthcoming soon as Hunton Andrews Kurth’s attorneys drill down further into this opinion.