Emerging Issues in the Arctic, Part III: Competing Visions of Deference

Last week, the Ninth Circuit Court of Appeals heard oral argument in Native Village of Point Hope v. Salazar. The lawsuit, brought by an Inupiat village and a “who’s who” of environmental groups, challenges the Bureau of Ocean Energy Management’s approval of Shell Oil’s plans to drill exploratory wells in the Beaufort and Chukchi Seas this summer. In particular, the lawsuit claims that BOEM acted arbitrarily and capriciously when it accepted Shell’s oil spill response plan and determined, as required under the Outer Continental Shelf Lands Act, that the exploration plan would probably not cause any significant harm. 

The issues in the case get pretty technical pretty quick, but basically amount to these: 1) What kind and degree of worst case discharge analyses are required of BOEM and industry during the exploratory drilling phase in a post-Macondo world? 2) Will the well capping that worked in the Gulf of Mexico work in Arctic conditions? Shell used to say no. Now, it says yes. Should BOEM take the company’s word for it? If so, how much explanation does BOEM need to give?

I have been combing through the dockets from the various lawsuits surrounding Shell’s present and past proposals to drill in the Beaufort and Chukchi Seas in search of the competing visions of the Arctic at stake. I have assumed that this battle between Big Green and Big Oil over the future of the Arctic would involve both narrative nuance and high stakes rhetoric, in addition to the requisite reams of technical detail and bureaucratic process-speak. After all, the Sierra Club and World Wildlife Fund have mounted a campaign called “Save the Polar Bear Seas.” Earthjustice’s “Visions of the Arctic” campaign has an action alert asking supporters to write President Obama to “Protect the Fragile Arctic Ocean.”  NRDC enlisted Robert Redford for a video titled “Keep Shell Out of the Arctic.” The Center for Biological Diversity has issued a fact sheet arguing that the “national treasure” of “the Arctic’s remote and undeveloped seas” should be “off limits to oil drilling.” Greenpeace’s protest efforts have already included Lucy Lawless getting arrested for boarding an oil drilling ship in New Zealand and the organization’s being sued by Shell to keep protest boats away from drilling sites. So it’s not like emotions are being held in check. 

Of course, litigation rarely sounds as extreme (or as lively) as political campaigns or fundraising appeals or Greenpeace protests. So I was not surprised when Holly Harris, an attorney at Earthjustice, announced to the Ninth Circuit panel that although the issues in the case “strike at the heart of an oil company’s ability to stop and control an oil spill on the outer continental shelf, the court’s resolution of these issues will be founded…in nothing more than the hallmark principles of administrative law.” This, after all, is precisely what we, as law folk, want most to believe. Accordingly, although the Native Village of Point Hope case is, from the perspective of the plaintiffs’ members, about Arctic sea ice crashing into heavy equipment in violent winds and choppy waters and the threats this possibility poses to indigenous communities of the Far North, the whales and caribou they depend on, and those amazing polar bears, the case the lawyers and judges analyzed at oral argument was about the proper degree of deference the court should grant to the expert agency.

Shell’s and BOEM’s argument is that under the Ninth Circuit opinion in Lands Council v. McNair a court’s deference to an administrative agency is at its zenith when dealing with an issue that falls within the scientific or technical expertise of the agency, and even more so when the issue is at the frontier of science and technology. Here, both argued that McNair deference should apply to BOEM’s determination that Shell’s plan to use well capping to contain a blowout is an adequate part of the overall oil spill response plan. However, the case is not really about BOEM’s expertise, because BOEM is not the real expert. As noted above, Shell originally believed well capping would not work in Arctic conditions, and only recently changed its mind. BOEM accepted the company’s change of heart, but apparently without any explanation as to why. According to Ms. Harris of Earthjustice, this lack of explanation is fatal. According to Shell’s lawyers, it is irrelevant: BOEM has no responsibility to reconcile the inconsistency in Shell’s position because agencies are allowed to change their minds. 

This is a gross oversimplification of the skilled argument before the Ninth Circuit, but here, it seems to me, is the basic problem with the Shell’s argument: The agency didn’t change its mind, Shell did, and BOEM accepted it without much explanation. So, if the court defers to BOEM, and BOEM defers to Shell, isn’t the court really deferring to Shell? This, obviously, is not a unique occurrence. Industry frequently possesses a greater degree of technical expertise—and the resources necessary to develop the expertise—than administrative agencies. But this expertise is not neutral; it is deeply informed by companies’ corporate interests. Do we want courts to defer to industry (rather than agencies) in frontier areas of science and technology? Do we want courts to defer to Shell (rather than BOEM) in this frontier area of the planet? Isn’t that kind of deference a violation of the hallmark principles of administrative law? 

The well capping controversy may prove to be an illusory concern, as Shell has several other options for oil spill response and containment. These other options may be challenged a little later, when the Bureau of Safety and Environmental Enforcement issues a drill permit that officially approves the oil spill response plan. So, more to come on that front. Meanwhile, there are several other lawsuits underway, challenging the environmental review underlying the lease sale in the Chukchi Sea and the air permits issued by EPA for the drilling operations. Whether the lawyers admit it in court, the battle for the Arctic is most definitely on. 

- Michael Burger