By: Nina Victoria
On January 6, 2021, only fourteen days before President-Elect Joe Biden is inaugurated, the Trump Administration will begin selling oil and gas leases in the Arctic National Wildlife Refuge.[1] However, there are compelling reasons to prevent drilling in the region including to protect vulnerable arctic wildlife, the risk of an oil spill and the difficulty of mitigating the effects of one in the arctic, and the affects that drilling has on climate change.[2] Lawsuits have already been filed by The Audubon Society, Center for Biological Diversity, Sierra Club, and the Gwich’in Steering Committee challenging the adequacy of the environmental review process that is required by the National Environmental Policy Act (“NEPA”) before leases can be issued.[3] Additionally, the Biden Administration “has vowed to protect the refuge and could delay or possibly revoke any leases that are issued.”[4] But, is revoking leases after they are issued within the authority of the incoming president and his executive branch agencies?
In 2016, the Secretary of the Interior under the Obama Administration, Sally Jewel, did just that. She revoked granted leases to drill for oil and gas in the Badger Two Medicine Area of Billings, Montana; some of which were granted in the early 1980s.[5] The Secretary cancelled the leases because they were in violation of NEPA and the Historic Preservation Act.[6] NEPA requires agencies “to use all practicable means to create and maintain conditions under which man and nature can exist in productive harmony.”[7] Agencies must “incorporate environmental, considerations in their planning and decision-making . . . [by preparing] detailed statements assessing the environmental impact of and alternatives to major federal actions significantly affecting the environment.”[8]
One of the companies that held a lease which was cancelled in 2016 challenged the move in district court, claiming, among other things, that the cancellation decision was arbitrary and capricious.[9] While the United States District Court for the District of Columbia initially overturned the cancellation of that lease, which was issued in 1982, the Court of Appeals upheld the cancellation in Solenex LLC v. Berhard.[10]
Under the Administrative Procedure Act, which governs administrative agencies, agency action may be held unlawful and set aside if the action is found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law . . .”[11] Agency action is arbitrary and capricious where the agency does not offer evidence that explains its underlying decision and they do not have a rational connection between the facts and the choice made.[12]
The court in Solenex LLC v. Berhardt, found that the agency action of cancelling the lease was not arbitrary and capricious, even though there was a thirty-four-year delay in the cancellation.[13] They found that the delay in the cancellation was the result of “extensive and complex environmental, cultural, historical, and religious challenges to the agency decision” and did not result in harm to the company.[14] However, the Court remanded the case back to the District Court for the District of Columbia to reconsider whether the agency action was arbitrary and capricious for more than just the delay of the action alone.[15]
Thus, the Secretary of the Interior under the Biden Administration, currently pegged to be Representative Deb Haaland of New Mexico, may cancel the leases to be sold on January 6, 2021 so long as there is a rational connection between the facts surrounding the issue and the cancellation, and she offers evidence to support her decision. She can choose to cancel those leases based on a violation of NEPA, as many environmental groups allege, or other statutory requirements and policy considerations. Harm is unlikely to result by the cancellation of these leases, especially if the cancellations are done shortly after the administration is sworn in and cabinet nominations have been confirmed. There would be too little time for the companies with leases to begin their operations, and those applying for the leases are already aware of the possibility the Biden Administration will revoke them. Additionally, the agencies may remedy any expenses that a company may incur while applying for the lease, which makes harm even less likely.[16] Therefore, the Biden Administration will likely be successful in preventing drilling in the arctic, which will help to prevent further climate catastrophes in the years to come.
[1] Henry Fountain, Sale of Arctic Refuge Oil and Gas Leases Is Set for Early January, The N.Y. Times, Dec. 3, 2020, https://www.nytimes.com/2020/12/03/climate/arctic-refuge-lease-sales.html.
[2] 5 reasons why America’s Arctic should remain off-limits to new drilling for oil and gas, World Wildlife Fund, (last accessed Dec. 23, 2020) https://www.worldwildlife.org/stories/5-reasons-why-america-s-arctic-should-remain-off-limits-to-new-drilling-for-oil-and-gas.
[3] Adam Federman, The Trump Administration Rushes to Sell Leases in the Arctic Refuge, But How Much Oil Is There?, The Sierra Club, Dec. 7, 2020, https://www.sierraclub.org/sierra/trump-administration-rushes-sell-leases-arctic-refuge-how-much-oil-there.
[4] Id.
[5] Associated Press, US cancels energy leases in Montana area sacred to Blackfeet, FOX News, Nov. 17, 2016, https://www.foxnews.com/us/us-cancels-energy-leases-in-montana-area-sacred-to-blackfeet.
[6] Solenex LLC v. Bernhardt, 962 F.3d 520, 525 (D.C. Cir. 2020).
[7] What is the National Environmental Policy Act?, U.S. Environmental Protection Agency, (last accessed Dec. 23, 2020), https://www.epa.gov/nepa/what-national-environmental-policy-act.
[8] Id.
[9] Solenex LLC v. Bernhardt, 962 F.3d at 526.
[10] See Id.
[11] 5 U.S.C.A. § 706.
[12] See Motor Vehicle Mfrs. Ass’n v. State Farm Mutual Ins. Co., 463 U.S. 29 (1983).
[13] See Solenex LLC v. Bernhardt, 962 F.3d 520.
[14] Id. at 528.
[15] Id. at 530.
[16] See Solenex LLC v. Bernhardt, 962 F.3d 520.