Is NEPA a winning strategy to fight oil and gas?

By Heather Richards | 08/24/2022 06:43 AM EDT

The National Environmental Policy Act may not be enough to stop projects such as Willow in Alaska, even as political commitments and climate policies aim to reduce federal fossil fuel production.

A northeastern section of the National Petroleum Reserve-Alaska.

A northeastern section of the National Petroleum Reserve-Alaska. Bob Wick/Bureau of Land Management Alaska/Flickr

Environmentalists have long used four letters — NEPA — to force greenhouse gas disclosures about fossil fuel plans on public lands.

But as the massive Willow oil and gas project in Alaska shows, the National Environmental Policy Act may not be enough to stop proposals even as Democrats’ political commitments and climate policies aim to reduce federal drilling.

A draft environmental review recently released by the Biden administration found that Willow could drive as much as $18 billion in climate damages. That finding came on the heels of a federal judge vacating the project’s Trump-era approval over an earlier climate analysis deemed insufficient under NEPA. But the new carbon cost estimates produced by the Biden administration are just one factor in determining whether the White House ultimately approves — or rejects — Willow.


Legal analysts say that’s because NEPA has its limits. It demands robust analysis, but it can’t force an administration to make a particular decision.

“NEPA, for all its benefits, doesn’t mandate outcomes. All it mandates is that an agency accurately disclose the impacts — the environmental impacts — of a project,” said Jeremy Lieb, a senior attorney for Earthjustice, one of the organizations that got the Willow project approval revoked on climate grounds.

Willow, backed by Houston-based ConocoPhillips, highlights a long struggle by environmental groups to make climate change central to decisions about fossil fuel development on public lands. The project also underscores the legal constraints faced by climate organizers who ultimately want to retire oil and gas drilling on federal lands — an action that may have to come from the White House or Congress rather than the courts.

The Biden administration hasn’t yet revealed its plans with Willow. A public comment period on the draft environmental review ends this month.

Over a 30-year lifetime, Willow could generate some $10 billion in public revenues by producing from a 600-million barrel reserve, according to ConocoPhillips. The company had pushed to begin construction during the winter of 2021, before being stymied by courts. Company leadership has since stressed that the company needs federal approval before reaching a financial close and moving the project forward.

The project’s supporters, who include union workers, state and local political leaders and Alaska Native corporations, are now hoping for a final decision this year in time for construction during the Arctic’s narrow window for operations — when it’s cold enough for ice roads to protect the sensitive tundra.

Time “is of the essence,” said Mark McManus, general president of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, in a letter earlier this month urging Interior to finish its supplemental environmental review. “Swift completion of this process will put our members to work.”

In the draft analysis of Willow, officials contemplate a slimmed-down project that some expect to be the final verdict, which would reduce local impacts but do little to stem emissions over the project’s decadeslong life.

It would be a disappointing turn of events for many Arctic activists.

President Joe Biden’s White House has been credited as being the most climate-focused in history, and its commitments include aiming for net-zero carbon emissions across the U.S. by midcentury, curbing leaks of the potent greenhouse gas methane in the oil patch, investing in electric vehicles and lifting renewables like offshore wind to supplant fossil fuels.

But Willow highlights the president’s struggle to keep climate ideals amid high pump prices and political pressures.

Even as Democrats hold a narrow majority on Capitol Hill, the president’s climate asks from lawmakers have been difficult to achieve without major concessions to fossil fuel interests on public lands.

Willow is also supported by powerful political voices in Congress, such as Alaska Sen. Lisa Murkowski (R). They’ve tried to pair the White House’s climate focus on public lands with global issues such as high energy prices, which stem in part from the Covid-19 pandemic and Russia’s war in Ukraine.

Citing a “troubled” economy with the “highest inflation in four decades,” Murkowski said in a recent statement that Biden must meet challenges “head on” by supporting federal energy projects.

“It is time to start approving common sense development projects like Willow that will help bring down inflation, create jobs, and return our economy to growth,” she said.

ConocoPhillips echoed that sentiment. The company has argued that environmental groups exaggerate the potential climate impacts of the project and downplay its benefits, citing support from labor and local leaders.

“We have experienced attacks on Willow from activist groups that ignore the facts about the project’s emissions and twist data to compare the lifespan emissions of a major natural resource development project with annual emissions data,” Dennis Nuss, a ConocoPhillips spokesperson, said in a recent email.

“The Willow project will leverage modern technology and operational practices to reduce overall [greenhouse gas] emissions, which is reflective of ConocoPhillips’ commitment to conservation and the environment,” he said. “Now, more than ever, the United States’ natural resource development needs to be prioritized to achieve energy and climate security—two goals that are compatible.”

‘Very strong evidence’

While Willow is a significant challenge for the Biden administration — and an opportunity for industry — it also represents the culmination of a long line of U.S. climate fights.

For years, environmental groups sued the federal government, demanding that fossil fuel decisions consider the cumulative impacts of development on the climate under NEPA, while industry groups have defended federal leasing and drilling.

“We’ve been in the thick of it, defending pretty much every lease since 2015, and most of those are challenged on the basis of climate change,” said Kathleen Sgamma, president of the Western Energy Alliance in Denver.

But environmentalists have often won those climate fights, going back to the Obama administration and a lawsuit over the climate impacts of coal leasing. The Bureau of Land Management had argued the effects would be the same with or without federal coal because coal buyers would simply buy from somewhere else. A judge disagreed.

Green advocates built on that win with oil and gas fights, often over leasing decisions. Leveraging NEPA requirements to consider the ramification of federal decisions, they strong-armed BLM — a subagency of the Interior Department that runs the federal oil program on land — to do more expansive climate analyses. That often meant looking not just at local emissions but cumulative emissions from federal oil and gas.

The fights have spilled offshore, too. After the Sierra Club, Healthy Gulf and several other organizations sued the Biden administration over its 80-million-acre oil lease auction in the Gulf of Mexico last year, the U.S. District Court for the District of Columbia vacated the sale due to weak climate assessments.

With Willow, a federal judge vacated the project’s approval by the Trump administration over greenhouse gas assessments.

Despite racking up those wins in court, groups that include the WildEarth Guardians, Trustees for Alaska and the Western Environmental Law Center have yet to see their long-term strategy come full circle with a presidential administration willing to block or limit a significant oil project on climate grounds.

“We felt like if we could get a better rigor, better analytical accountability, that it would open the door for more substantive action,” said Jeremy Nichols, climate and energy program director at WildEarth Guardians. “This is no tilting at windmills … the only way out of [climate change] is a significant transition. There’s simply not the leadership in place to make that happen.”

Early on, the Biden administration appeared willing to at least consider retiring the federal oil program due to climate impacts. It had promised to end new oil permitting and leasing on federal lands on the campaign trail and immediately froze new leasing after taking office, kicking off a review of the federal oil and gas program.

But after its own court losses, industry backlash and rising global oil prices, the Biden administration has pivoted to more strategic regulatory actions, within the clear bounds of the Interior Department’s authority. That includes increasing royalty rates and reducing the size of lease auctions.

The Interior Department also has released a broad climate assessment to be used in future oil and gas decisions and pushed to reinstate a social cost of carbon metric to show the cost of oil and gas in financial terms. Willow’s $18 billion estimated climate damage, depending on which development scenario would be approved, was calculated using the administration’s carbon price metric.

Such actions could have far-reaching effects on the footprint of the federal program in the future while also increasing revenues. But they may fall short of the public lands revolution activists hoped to see materialize.

The Interior Department declined to comment to E&E News on Willow.

But when pressed on the future of oil and gas on federal lands, officials such as Interior Secretary Deb Haaland have stressed that traditional energy will continue to be part of the energy mix on public lands for years, although ultimately a shift to renewables is needed because of climate change.

Former Obama-era Interior official Joel Clement, now an Arctic Initiative senior fellow at the Harvard Kennedy School’s Belfer Center for Science and International Affairs, pointed to the disconnect between what the Interior Department has put on the record regarding Willow’s climate impacts and the “political imperatives” at the White House that could ultimately decide Willow’s fate.

“The Interior Department now has very strong evidence that the Willow project would have serious climate consequences, and that evidence is on the record and well-supported,” he said in an email. “At a time when science tells us what we must do and politics stands in the way, it would be heartening to see the Interior Department stand firm and support the public interest over political interest. Ultimately, however, it’s a White House decision, and it will be a political one.”

‘Fairly broad discretion’

Many activists have said Biden can still block Willow on climate grounds under NEPA, while other experts are uncertain if such a move would run afoul of other laws.

Central to this disagreement is authority: Can a president interpret increasingly dour climate analyses on public lands and waters as a right to bar fossil fuel development?

Under both NEPA and other laws, some experts argue the Interior Department has a suite of authorities to protect the environment and public lands.

Lieb of Earthjustice said in Willow’s case there is also the National Petroleum Reserves Production Act, which specifically governs activity in the reserve and grants extensive authority to an administration.

“If the analysis demonstrates that the project will have impacts that can’t be mitigated, the administration can deny the project,” Lieb said.

Mark Squillace, a federal law expert at the University of Colorado Law School and former special assistant to the Interior solicitor during the Clinton administration, agreed that the reserve act gives the Interior “fairly broad discretion” to restrict activities with serious surface impacts.

But he also said if the Biden administration were to reject Willow, it probably would be on multiple grounds, with climate impacts being just one. Such a decision also wouldn’t bar other reserve oil and gas activities, in his estimation.

“Biden could decide to reject this particular proposal from ConocoPhillips even while leaving the door open for some more modest development with fewer adverse impacts,” Squillace said.

Regardless of what the Interior Department ultimately decides, Squillace said Biden is likely to get sued. The final word on Willow, and on climate strategies to bar oil development on public lands, could be months or years away.

Meanwhile, oil and gas supporters are questioning the limits of presidential powers as climate becomes more of a central issue for large oil and gas decisions. From their perspective, oil and gas activity is robustly supported by laws. Those laws were written during previous eras when protecting U.S. fossil fuel interests was paramount and environmental impacts were largely local concerns.

“Clearly environmental impacts now include impacts on climate change,” said Sgamma of the Western Energy Alliance. “But there’s no law passed by Congress that says we are shutting down our economy because of climate change.”

Rebecca Watson, who oversaw the BLM and other Interior energy agencies as a deputy Interior secretary during the George W. Bush administration, said the Interior secretary’s discretionary power over oil approvals doesn’t necessarily supersede other important mandates.

That includes Federal Land Policy and Management Act language defining mineral development as a “principal use” of federal lands and the Mineral Leasing Act’s use of “shall” regarding leasing for energy development, she said.

Biden officials likely feel the constraint of those laws, as well as others that touch on the federal government’s energy responsibilities, including the Outer Continental Shelf Lands Act and the Federal Oil and Gas Royalty Management Act, Watson said.

“I do not think it is as simple as the advocates argue,” she said in an email. “I think it is one of those ‘silver bullet’ solutions that don’t really work in the real world of governance and the rule of law.”