Appeals Court: BSEE’s approval of Shell’s Alaska oil spill response plan lawful

A panel of judges in the U.S. Court of Appeals for the 9th circuit affirmed the district court’s summary judgment in favor of federal defendants and Shell in an action brought by environmental groups alleging that the Bureau of Safety and Environmental Enforcement acted unlawfully in approving two of Shell’s oil spill response plans for its oil leases in the Beaufort and Chukchi Seas on Alaska’s Arctic coast.

The panel held that the Bureau’s approval of Shell’s oil spill response plans was not arbitrary, capricious, or otherwise not in accordance with law under the Administrative Procedures Act.

Furthermore, the panel rejected the plaintiffs’ contention that the Bureau should have engaged in Endangered Species Act consultation before approving the plans.

Also, the panel held that the BSEE lacked discretion to deny approval once it determined that the oil spill response plans satisfied the statutory requirements. The panel concluded that the Bureau’s approval of the plans was a nondiscretionary act that did not trigger a requirement for interagency consultation under the Endangered Species Act.

The panel rejected plaintiffs’ contention that the Bureau violated the National Environmental Policy Act by failing to prepare an Environmental Impact Statement before approving the plans. The panel held that the Bureau reasonably concluded that it must approve any plan that met the statutory requirements of the Clean Water Act. The panel concluded that the Bureau’s approval of Shell’s plans was not subject to the requirements of the National Environmental Policy Act.

Judge D.W. Nelson dissented. Judge Nelson concurred with the majority that the Bureau did not act in an arbitrary or capricious manner in approving the plans, but dissented from
the remainder of the majority opinion.

She held that the Bureau was required to engage in Endangered Species Act consultation, and conduct analysis pursuant to the National Environmental Policy Act, and she would reverse the summary judgment accordingly.

Circuit Judge Jacqueline Nguyen wrote: “Shell Gulf of Mexico Inc. and Shell Offshore Inc. (collectively “Shell”) for many years have sought to develop offshore oil and gas resources in the remote Beaufort and Chukchi seas on Alaska’s Arctic coast. Shell secured leases for the Beaufort Sea in 2005 and 2007, and the Chukchi Sea in 2008, but its exploration efforts have been waylaid by a
variety of legal, logistical, and environmental problems, including multiple lawsuits, the wreck of one of its drill rigs, and the temporary suspension of drilling activities in the Arctic after the Deepwater Horizon Spill.

However, she said that: “We review here another challenge, a claim by a coalition of environmental groups that the Bureau of Safety and Environmental Enforcement (“BSEE”) acted unlawfully in approving two of Shell’s oil spill response plans (“OSRPs”). The district court granted summary judgment in favor of the federal defendants and intervenor-defendant Shell. We affirm.”

Responding  to the ruling, Shell said: “The 9th Circuit Court’s opinion upholding BSEE’s approval of Shell’s Oil Spill Response Plan is welcome news and validates that the Department of Interior complied with applicable laws and regulations in approving Shell’s OSRP for work in offshore Alaska. We remain confident that BSEE’s approval of our plans meets all legal and regulatory requirements.” 

Offshore Energy Today Staff