U.S. Judge Orders "Hard Look" at CO2 from Federal E&P Leases

In a decision that could affect environmental permitting for federal oil and gas leases, Judge Rudolph Contreras ruled that the Obama administration improperly excluded downstream greenhouse gas emissions when evaluating the impact of lease activity in Wyoming. While the ruling's immediate outcome is limited in scope - it temporarily blocks new leases on a 300,000-acre area in Wyoming - it rests on an interpretation of environmental requirements that could affect all federal E&P leasing, offshore or on.  

Under the National Environmental Policy Act (NEPA), every federal agency has to estimate the environmental impact of every major decision it takes, except for those that the agency believes will have no significant effect on the quality of the environment. When performing estimates, the Department of the Interior has historically evaluated local or regional impacts - like water quality or wildlife habitat degradation - in its process for permitting oil and gas projects.

Under Judge Contreras' interpretation, the Department would have to take a "hard look" at the global climate impact of burning the fossil fuels produced from each specific E&P lease. This is a notable departure from current permitting practice, because these emissions are not created at the lease site: they are created everywhere that the site's products are processed and consumed. 

"Given the national, cumulative nature of climate change, considering each individual drilling project in a vacuum deprives the agency and the public of the context necessary to evaluate oil and gas drilling on federal land before irretrievably committing to that drilling," wrote Judge Contreras. "Simply put, NEPA [requires] more robust analyses of GHG emissions from oil and gas drilling and downstream use."

Environmental advocacy groups cheered the decision. “This is the first court ruling that specifically tears apart the Interior Department’s failure to take into account the impact of climate change on drilling, on a national scale,” said Jeremy Nichols, climate change and energy director for plaintiff WildEarth Guardians. 

Western Energy Alliance, a trade association for petroleum companies in the Western U.S., said that the decision was unnecessary because later stages of the permitting process would have included a greenhouse gas assessment anyways. "[BLM] under Obama did the correct level of greenhouse gas analysis at the leasing stage. The judge failed to acknowledge there are multiple rounds of NEPA required before any development can occur, which will get to that well-specific GHG impact," the group said in a statement on Twitter. 

“The judge is asking BLM to take a wild guess at how many wells would be developed on these leases and analyze greenhouse gas impacts for wells that will never be developed,” said Kathleen Sgamma, a spokeswoman for the group.