Six Inupiat Eskimos and Greenpeace, Inc. sought review of the Secretary of the Interior's decision to permit oil production by BP Exploration Alaska, Inc. (BPXA) in the Beaufort Sea off the Alaska coast. The petitioners challenged the adequacy of a final environmental impact statement (EIS) as required by the National Environmental Policy Act (NEPA)[1] and compliance with the spill response plan requirements of the Oil Pollution Act of 1990 (OPA).[2] While the Ninth Circuit had jurisdiction to hear the NEPA claims, the court lacked jurisdiction to review the OPA claim.[3]

The Beaufort Sea's waters and shores provide habitat for caribou and the endangered bowhead whale on which the Inupiat Eskimo have subsisted for more than four thousand years. In 1979, Alaska and the United States sold leases to the Northstar oil field, a reserve extending from two to eight miles off the northern coast of Alaska in the Beaufort Sea and containing 158 million barrels of oil. BPXA acquired lease rights from the previous lessees in 1995. BPXA then applied for approval of a fifteen-year plan to: 1) produce oil, proposing to reconstruct and expand an artificial gravel island, Seal Island, on state submerged lands in the Northstar reserve; 2) drill oil and gas production wells, gas injection wells, and waste disposal wells from Seal Island into federal portions of the Northstar reserve; 3) transport oil from Seal Island to the shore using a buried six-mile pipeline; 4) transport gas to the shore using a second pipeline buried in the same trench as the oil pipeline; 5) transport oil overland to the Trans-Alaska pipeline in an above-ground eleven-mile pipeline; 6) transport oil in the Trans-Alaska pipeline to Valdez, Alaska; and 7) transport oil in tankers from Valdez to ports in the western United States and abroad.

BPXA applied for permits from the United States Army Corps of Engineers (Corps) as required by section 404 of the Clean Water Act (CWA)[4] and section 10 of the Rivers and Harbors Appropriations Act of 1899.[5] BPXA also applied to the Department of Interior's Minerals Management Service (MMS) for approval of the Development and Production Plan (DPP) as required by the Outer Continental Shelf Lands Act (OCSLA).[6] Because issuing the permit constituted a "major Federal action[]," under NEPA[7] in 1995 the Corps required preparation of an EIS. In 1996 MMS and the Environmental Protection Agency (EPA) concurred that an EIS was necessary. Acting as the lead agency, the Corps prepared a single EIS in conjunction with MMS, EPA, United States Fish and Wildlife Service (FWS), and the National Marine Fisheries Service (NMFS). In July 1999, MMS relied on the EIS in approving the BPXA DDP, and in October 1999 the petitioners sought review in the Ninth Circuit of MMS's decision to approve the DDP.

The petitioners alleged two EIS deficiencies with respect to the DDP: 1) the EIS failed to address adequately direct and indirect effects; and 2) the EIS failed to address adequately cumulative impacts. First, the petitioners argued that the EIS inadequately addressed direct and indirect effects of the DDP because DDP itself did not include a "site-specific oil spill trajectory analysis."[8] The court responded that the OCSLA regulations promulgated by MMS do not require a lessee to conduct such a site-specific analysis when analyzing environmental impacts. However, MMS regulations do require that the "worst case" estimate of environmental impacts in the event of an oil spill involve "[a]n appropriate trajectory analysis specific to the area in which the facility is located."[9] The petitioners also faulted the worst-case analysis for its reliance on data generated during a previous MMS oil spill-risk analysis conducted for a federal sale in an area overlapping the Northstar reserve. The court rejected this argument, holding that MMS "made a reasoned judgment that the data was relevant."[10] Although FWS also objected to the EIS omission of a site-specific analysis, the Ninth Circuit held that MMS took the requisite "hard look" with respect to direct and indirect effects of Northstar.[11]

The petitioners next alleged that the EIS inadequately analyzed cumulative impacts of the DDP because MMS did not follow the methodology outlined in the Council of Environmental Quality's guidance handbook.[12] The court rejected the petitioners' reliance on the handbook, calling the handbook not legally binding. The court then considered five areas where the petitioners alleged deficient cumulative impacts analysis: freshwater, gravel, air quality, vegetation, and subsistence.

First, the petitioners alleged that the EIS failed to consider the cumulative impacts on freshwater resulting from drawdowns of millions of gallons to build the icy roads. Although the petitioners properly noted that the EIS "overlooked" the 5.9 to 7.8 million gallons of water required to connect Seal Island to the coast, the court was "not persuaded...that such omission [was] material."[13] Correcting the amount of water withdrawn brought the total to 18.9 to 22.8 million gallons, which was still less than the 100 million-gallon limit imposed by Alaska for withdrawals from the Kuparuk Deadarm mine site, the probable source of freshwater for the BPXA icy roads. The petitioners further alleged that the cumulative impacts analysis failed to consider the combined effects of other drawdowns in conjunction with the proposed BPXA drawdowns. Although the court agreed that the EIS "could have explained existing drawdowns," the court found no evidence to suggest that such other drawdowns existed.[14] Accordingly, the Ninth Circuit refused to hold that the omission rendered the EIS inadequate. Finally, the petitioners alleged that the EIS inadequately analyzed the effects of the drawdowns on birds and vegetation. Because the EIS stated that impacts on water quality were negligible, the court concluded that the absence of further discussion was reasonable.

Second, the petitioners alleged that the EIS failed to consider the cumulative impacts of past and ongoing gravel extraction in conjunction with the proposed extraction to construct Seal Island. Because the EIS compared the impacts of gravel extraction from several alternative sites and concluded that extraction from existing sites could disrupt whale migration and fish and bird habitat, the court held that the EIS adequately addressed the environmental impacts of gravel extraction.

Third, the petitioners claimed that the EIS was inadequate with respect to cumulative effects on air quality because the EIS failed to analyze the effects of future industrial development on Arctic haze. The court rejected this claim, holding that the EIS could conclude that European pollution caused Arctic haze and thus failure to analyze impacts of the BPXA project on Arctic haze was "reasonable."[15] The petitioners also alleged that the EIS improperly concluded that impacts on air quality would be insignificant because pollutant concentrations would remain below National Ambient Air Quality Standards (NAAQS).[16] However, because the area already met NAAQS, the petitioners argued that the EIS should analyze degradation of air quality. The court rejected this claim as well, stating that once BPXA commenced construction and drilling, those activities would trigger review under the Clean Air Act (CAA)[17] provisions governing the prevention of significant deterioration in NAAQS attainment areas.[18] The petitioners also challenged the EIS because it failed to discuss new PM2.5 or ozone standards. Noting that the new standards had not taken effect, the court determined that the EIS's air-quality analysis was reasonable.

Fourth, the petitioners alleged that the EIS failed to analyze the cumulative effects on birds and caribou of past wetland destruction in conjunction with the effects of proposed wetland destruction. The court compared the proposed two-acre tundra "consumption" with past tundra losses of fourteen square miles to determine that the EIS could reasonably conclude that cumulative tundra loss "'would be small.'"[19]

Fifth, the petitioners claimed that the EIS failed to address adequately the impacts of the BPXA proposal on Inupiat subsistence hunting. Because the EIS examined impacts on bowhead whales and caribou, the court held that the EIS's reliance on elevating the pipeline to mitigate significant effects on caribou harvests was reasonable. Turning to the OPA claims, the Ninth Circuit determined that it lacked jurisdiction to review the claims because OPA provisions confer jurisdiction to review spill response plans on the district court.