JurisdictionUnited States
National Environmental Policy Act
(Oct 2010)


Michael S. Freeman
Meg Parish
Denver, Colorado

MICHAEL FREEMAN is a Staff Attorney with Earthjustice. He represents sportsmen and conservation groups in litigation and administrative proceedings relating to oil and gas regulation and development. In 2008, he represented a coalition of conservation organizations in the Colorado Oil and Gas Conservation Commission proceedings that led to the adoption of new permitting rules that protect wildlife, water quality, and public health. Mike also is challenging a number of proposed oil and gas projects on federal lands, including on Colorado's Roan Plateau. Prior to joining Earthjustice in March 2008, Mike was a partner with the law firm of Faegre & Benson LLP. Mike graduated from the University of Chicago Law School in 1994.

MEG PARISH joined Earthjustice's Denver office in May 2008. Meg works to address out-of-control oil and gas development in the West, fighting to protect special places from this development and pushing the industry to adhere to standards that will better protect communities and the environment. Meg became committed to environmental issues when working as a community organizer for Kentuckians for the Commonwealth in Harlan, Kentucky for four years, where she helped communities fight against the devastating effects of stripmining. Meg attended law school at Georgetown University Law Center and graduated there in 2006. During law school, she lobbied for the Citizens Coal Council, a coalition of coalfield citizen groups, worked on regulatory takings issues with Georgetown Environmental Law and Policy Institute, and clerked for Oceana. After graduating she clerked for two years with the Nuclear Regulatory Commission's Atomic Safety and Licensing Board Panel, which hears challenges to nuclear power plants. Meg received her BA in 1998 from New College of Florida.

I. Introduction

The National Environmental Policy Act (NEPA) has been called the "magna carta" of environmental laws, and with good cause. It is a classic "government in the sunshine law," requiring every federal agency to disclose to citizens the potential environmental impacts of its proposed actions, and permitting the public an opportunity to shape the final agency action through comments. NEPA also requires federal agencies to "look before they leap" by evaluating the potential environmental consequences of their actions.

But what happens when the "leap" takes years, and the landscape where the "leap" occurs changes over time? And what happens when the project itself may evolve over a period of years from what was originally proposed? Can an agency put on blinders after completing its environmental analysis and go forward long after the environmental analysis has grown stale?

These questions have long been asked - and answered by courts - over NEPA's four-decade history. But the growth of oil and gas development in the Rocky Mountain West has posed a particular challenge to agency NEPA compliance. The sheer scale and pace of that growth has rendered earlier NEPA analyses outdated, and often presented new environmental concerns not considered in existing NEPA documents. As a result, courts and agencies have grappled with the questions of when supplemental NEPA analyses are required and how to make

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that determination. This article surveys the law on supplemental NEPA analysis and discusses its application to federal energy development today.1

II. Background

The NEPA statute itself does not expressly address supplemental environmental impact analyses.2 NEPA's implementing regulations, and the Supreme Court, however, have recognized that supplemental post-decisional analyses are sometimes necessary to satisfy the purpose of the law.

The Supreme Court has explained that NEPA aims to protect the environment by focusing government and public attention on the environmental impacts of a proposed agency action. In particular, a NEPA analysis serves two goals. First, it focuses an agency's attention on those impacts, so that "important effects will not be overlooked or underestimated only to be discovered after resources have been committed or the die otherwise cast."3 Second, it requires "broad dissemination of relevant environmental information" so that the public can comment on and effectively participate in agency decision making.4

Meeting those two goals can require supplementing a NEPA analysis. In Marsh v. Oregon Natural Resources Council, the Supreme Court explained: "It would be incongruous with this approach to environmental protection, and with [NEPA's] manifest concern with preventing

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uninformed action, for the blinders to adverse environmental effects, once unequivocally removed, to be restored prior to the completion of agency action simply because the relevant proposal has received initial approval."5 At the same time, however, the Court recognized the need for finality in agency decision making. It stated that "an agency need not supplement an [Environmental Impact Statement (EIS)] every time new information comes to light after the EIS is finalized. To require otherwise would render agency decisionmaking intractable, always awaiting updated information only to find the new information outdated by the time a decision is made."6

Accordingly, Council for Environmental Quality (CEQ) regulations require that a draft or final EIS be supplemented in the following two circumstances:

(i) The agency makes substantial changes in the proposed action that are relevant to environmental concerns; or

(ii) There are significant new circumstances or information relevant to environmental concerns and bearing on the proposed action or its impacts.7

CEQ regulations are binding on all executive federal agencies.8 Applying this regulation, the Supreme Court counseled, turns on "the value of the new information to the still pending decisionmaking process."9

Federal case law addressing supplemental EISs (SEISs) can be roughly divided by the two prongs of the CEQ regulation. First, courts have considered situations where the agency made substantial changes in the action. This claim is typically raised when a final EIS includes a

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proposed action that was either not discussed in the draft EIS or has been significantly modified from the draft EIS. It can also arise when a project is modified after the NEPA analysis and initial decision have been finalized. The second group of supplemental NEPA cases arises "more frequently,"10 and address the question of whether significant new circumstances or information - that are typically external to the project itself - require further analysis.

III. Substantial Changes in the Proposed Action

A. Legal Test for Supplemental NEPA Following Substantial Changes

Under 40 C.F.R. § 1502.9(c)(1)(i), an EIS must be supplemented when "[t]he agency makes substantial changes in the proposed action that are relevant to environmental concerns." Claims based on this part of the regulation may arise when an agency considers or adopts a decision that differs from the alternatives considered in the draft EIS. Substantial change claims also can arise when an already-approved project is later modified by the agency.11

The Ninth and Tenth Circuit Courts of Appeal, and Bureau of Land Management (BLM) handbooks, focus on two main elements.12 First, the courts consider whether the environmental impacts associated with the change may be "substantial" or "significant."13 Second, the impacts

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must be different from those considered in the existing NEPA analysis - or the impacts must be uncertain.14

These elements should be applied to advance NEPA's twin goals of informed decisionmaking and public disclosure. For example, the Ninth Circuit has explained that the EIS process "should serve both to alert the public of what the agency intends to do and give the public enough information to participate intelligently in the EIS process."15 In the SEIS context, this requires a "pragmatic judgment" as to whether the change "was within the range of alternatives the public could have reasonably anticipated" the agency to be previously considering, and "whether the public's comments on the draft EIS alternatives also apply to the chosen alternative. . . ."16

Similarly, the analysis must ensure that the agency is informed about the impacts of the substantial change. A CEQ guidance document provides that a supplemental EIS is necessary where the change to an earlier proposal is "not a variation of . . . any alternative discussed in the draft impact statement," or where it is a "variation [that] was not given any consideration by the agency." On the other hand, the guidance states that no supplemental analysis is needed for a change that is "qualitatively within the spectrum of alternatives that were discussed in the draft" and is only a "minor variation" from those alternatives.17

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B. Application of the Substantial Change Standard

In recent years, the need to supplement NEPA analyses to reflect substantial changes in proposals for oil and gas development has arisen in several contexts.

1. The Otero Mesa Decision

The Tenth Circuit recently issued a significant decision applying the substantial change standard to a BLM mineral leasing decision. In New Mexico ex rel. Richardson v. BLM, the Tenth Circuit ruled that the government violated NEPA by failing to prepare supplemental analysis in connection with a revised plan for drilling New Mexico's Otero Mesa. The Tenth Circuit decision provides several guideposts for analysis of changes to energy development plans.

In the draft EIS, BLM's preferred alternative would have limited habitat fragmentation on Otero Mesa by requiring that surface disturbance occur only along existing road corridors.18 BLM's final plan eliminated that...

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