Coal Age

MAY 2019

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40 www.coalage.com May 2019 legally speaking Judge's Ruling May Halt Federal Leases by ali nelson Yet another effort by President Don- ald Trump's ad- ministration to roll back former- President Barack Obama-era policy changes impacting the coal industry has been overturned by the courts. The late-April decision by Judge Brian Morris in Citizens for Clean Energy v. Department of the In- terior (DOI) in the U.S. District Court for the District of Montana may yet again bring new coal leases on fed- eral lands to a standstill, pending re- view by the DOI of the environmental impacts of the coal leasing program administered by the Department's Bureau of Land Management (BLM). On January 15, 2016, Secretary of the Interior Sally Jewell issued Order No. 3338 (the Jewell Order) directing BLM to prepare a Programmatic Envi- ronmental Impact Statement (PEIS) to analyze potential reforms to the federal coal leasing program. That order raised concerns with the program about fair return, climate change and market conditions. The order also instituted a "pause" on leasing — no new applica- tions for coal leases or lease modifica- tions would be processed until com- pletion of the programmatic review. Fourteen months later, on March 28, 2017, Trump issued an executive order directing former DOI Secretary Ryan Zinke to "take all steps necessary and appropriate to amend or with- draw" the Jewell Order. Secretary Zinke issued his own order the next day (the Zinke Order), declaring that "the public interest is not served by halting the fed- eral coal program for an extended time, nor is a PEIS required to consider po- tential improvements to the program," revoking the Jewell Order, and ordering BLM to resume processing coal lease applications and modifications. Numerous environmental organi- zations and the attorneys general for several states challenged the Zinke Order in federal court, requesting the court find that the department had violated the National Environmental Protection Act (NEPA) by issuing it without first completing the required environmental analysis. NEPA requires federal agencies to perform an environmental analysis before taking "any major federal ac- tions significantly affecting the quality of the human environment." Although the defendants argued the Zinke Or- der was a policy shift and return to the status quo, not a major federal ac- tion requiring NEPA review, the court found that lifting the moratorium met the "relatively low" threshold standard for a NEPA-triggering event. The court also found the Zinke Order met the re- quirements for "final agency action" because the decision to recommence coal leasing applications was the "con- summation" of decision-making on the moratorium and had the legal con- sequence of lifting the environmental protections that were in place pending preparation of a new PEIS. The court cited precedent establishing that a "de- cision not to prepare an EIS or consult NEPA can itself be final agency action." What's Next? The court did not enter an order com- pelling the department to prepare a PEIS. It simply ordered the defendants to "initiate the NEPA process," explain- ing that "the decision of whether an EIS proves necessary pursuant to the agen- cy's action 'is a matter of action left to the agency's discretion.'" While an EIS would satisfy the requirements of NEPA, the court noted that the department could also determine that no EIS is needed and supply a "convincing state- ment of reasons" to explain why the impacts of its order would be insignifi- cant and prepare an environmental as- sessment instead. However, the court's observation the defendants "have failed to take even the initial step of determin- ing the extent of environmental analysis that the Zinke Order requires" makes it clear the department will need to con- sider NEPA before taking further action to undo the process set in to motion by the previous administration. In addition, the court did not re- store the moratorium on federal leases pending completion of the NEPA pro- cess. Rather, the court held that "per- manent injunction is not an automatic remedy in a NEPA case," and found that the plaintiffs had failed to address the factors for permanent injunc- tive relief. It then directed the parties' counsel to confer in good faith and ei- ther submit a joint proposal regarding any agreed remedies or submit addi- tional briefing on the factors support- ing a permanent injunction. It seems unlikely the department will agree to an injunction on federal leasing while the NEPA process is under way, so whether leasing is allowed to continue will likely be decided by the court. This isn't the first NEPA case that has slowed the current administra- tion's progress, but the administration is continuing to work to make it one of the last. Trump issued an executive order on August 25, 2017, directing the Council on Environmental Quality (CEQ) to modernize the environmen- tal review process. CEQ published an advance notice of proposed rulemak- ing last summer seeking comment on possible updates to the NEPA regula- tion, which may include narrowing what constitutes a "major federal proj- ect" that would trigger the NEPA pro- cess and by expanding the categorical exclusions from its requirements. Ali Nelson is senior counsel with Husch Blackwell. She can be reached at ali.nelson@huschblackwell.com.

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