“CONFLICTS AND COOPERATION: THE PAST, PRESENT, AND FUTURE OF INTERSTATE WATER COMPACTS”

 

Denver, Colorado                          April 8, 2016

ADDRESSING COMPETING OBLIGATIONS UNDER COMPACTS & THE ENDANGERED SPECIES ACT

In this panel, Karen Kwon and James “Jay” Tutchton presented differing sides of ongoing conflicts between the federal law and state water compacts concerning the Endangered Species Act (“ESA”).  Kwon, from the Office of the Colorado Attorney General, works in water compact litigation and negotiations.  She has contributed to two amicus briefs submitted to the Supreme Court of the United States regarding state compact issues.  Tutchton has been a public interest environmental attorney for over twenty years, and he is currently a Senior Staff Attorney with the Defenders of Wildlife.  Federico Cheever, an environmental law professor at the University of Denver Sturm College of Law who has written about the ESA, moderated the panel.

First, Kwon offered her approach to this conflict.  She began with a brief recitation of the implications the ESA has among interstate relations.  For instance, the ESA affects water and wildlife management between states because endangered species recovery in one state can affect water supplies in other areas.  Additionally, the ESA implicates the allocation and use of compact water.  Recovery of underwater species under the ESA often requires reserving a steady water supply for recuperation efforts.

 

Then, Ms. Kwon focused on the state perspective of this competition and described several values that Coloradans hold.  First, Coloradans value their environment.  Conserving and promoting species promotes that way of life.  Second, that quality of life requires a certain availability in water supply.  Attaining a reliable supply of water helps to preserve species and further Coloradans’ way of life.  Finally, Coloradans seek to maintain their ability to manage the resources within their borders.

Kwon next analyzed the ESA and discussed its advantages and disadvantages.  One of its advantages is that lawyers can use it as a tool to effectuate change.  Through litigation, lawyers can try to modify or stop projects that jeopardize endangered species.  Another point in the law’s favor, the ESA protections have proven successful in preventing extinction.  On the other hand, the ESA’s disadvantages include the fact that very few species have recovered to the point that they can leave the endangered species list.  Also, some view the ESA as a threat instead of a tool because the ESA threatens liability for those who do not adhere to its guidelines.  Finally, the ESA contains no long-term incentives looking to the future.  Instead, it focuses on present happenings and immediate incentives.

Before posing her solution, Kwon presented two examples in Colorado of conflicts between the ESA and compacts: the Delta Smelt in the Bay Delta and the Silvery Minnow in the Rio Grande.  The Delta Smelt conflict could dramatically cut the amount of water flowing to Southern California and directly affect the Colorado River.  The Silvery Minnow conflict involves a dwindling fish population in the Rio Grande River, which divides several states’ waters.

Kwon’s proposed solution to this problem is as follows: fit species conservation within the existing structure of water allocation in and between states.  Through this framework, states can create long-term goals and accomplish them while working within the ESA’s parameters.  Additionally, states may find flexibilities under the ESA to allow compliance with water compacts while recovering species.  Kwon then offered several examples from Colorado that embody this solution.  First, a Colorado policy, the Colorado Parks and Wildlife and the Colorado Water Conservation Board (“CWCB”) work to “keep species common” and to recover and de-list already-endangered species.  To do this, the two entities collaborate with public and private groups to collect, exchange, and analyze data and resources on endangered species.  Overall, they use this data to collaborate and try to intervene before listing species as endangered.

Another example illustrating Kwon’s proposed solution concerns the Upper Colorado Recovery Program.  In this program, several public and private entities collaborate to recover four endangered species of fish in the Upper Colorado River without interfering with water rights or compacts.  The program avoids this interference by implementing flow augmentation, monitoring non-native fish, screening large diversions, and constructing fish ladders to help habitat access.  Through these actions, the program maintains compliance with the ESA while promoting the recovery of several endangered fish.  Kwon also mentioned a third example: a water lease in the 15-Mile Reach in Colorado.  Through this action, the CWCB leases approximately twelve thousand acre-feet to preserve the natural environment flows in that area and maintain the goals of the parties involved, such as water use and development.

Kwon summarized by re-emphasizing that the challenges facing species are growing, such as a lack of both long-term solutions and scientific consensus.  In order to combat these challenges, she stressed that water advocates must collaborate and utilize scientific methods.

Tutchton took the podium next, and he started by explaining that the ESA’s process, like a play, consists of “acts.”  In the first “act,” the ESA prescribes the requirements for listing a species as endangered. Researchers utilize the best available science to determine whether extinction poses a danger to a species or a distinct population segment of vertebrate.  The second “act” includes the consultation process, during which the government re-thinks its activities in light of the listing.  This portion prohibits the federal government from making the species’ situation worse.  Finally, the third “act” prohibits anyone from “taking” the endangered species.  In this context, both killing a member of the species and destroying its habitat constitutes a “taking.”

According to Tutchton, the ESA is a paper tiger.  That is, it looks tough, but lawyers may easily disarm it.  In practice, the ESA only removes or modifies the worst-of-the-worst projects.  In the water world, however, Tutchton concedes that the ESA commonly helps water species gain protection and escape extinction.  He attributes this characteristic to the fact-heavy situations and objective, scientific determination. An apparent advantage for water wildlife is that researchers can collect data to calculate with scientific precision the results of a particular action, and thus protect endangered water species from peril.  For example, Tutchton mentioned one case where the predicted extinction of a three-inch fish overruled the construction of a dam.  In that case, researchers produced enough data to conclude the species would become extinct if developers built the dam and blocked its construction.

Next, Tutchton briefly mentioned that one can comply with both of the laws of the river, and then quickly turned to the success of the ESA.  For instance, while the government has de-listed relatively few species, the ESA’s regulations have seen success in perpetuating the survival of listed species.  Going against those that criticize the ESA for a lack of de-listing, Tutchton admitted the ability of the species to recover depends on the means one wants to use.  Certainly more drastic measures can get faster results, but those drastic measures may venture beyond one’s comfort zone.  In practice, the small measures produce small effects, often resulting in maintenance or slow growth of a species.

Additionally, while Tutchton understands the desire for local control, he argued several counterpoints.  First, all species, as national resources, are of national interest.  All people, no matter where they live, have an equal right to enjoy the nation’s wildlife.  Furthermore, the need to list a species represents a local failure of conservation.  The federal government does not manage wildlife until after listing occurs.  Then, the federal government steps in to intervene for the endangered species.  Finally, Tutchton admitted that handing control back to the state, which often caused the endangered status, disappoints him.

Then, Tutchton touched on the issue of drought.  He declared that Westerners routinely live in a drought.  In fact, he hopes people in Colorado and the West more generally remove the word “drought” from their vocabularies, as these areas normally experience little or no precipitation.  Furthermore, Westerners should consider rain or snow an abnormality, especially in states located in a former dust bowl.  Thus, organizations should expect drought-like weather and act in accordance with the expected conditions.

Finally, Tutchton spoke about the future of the ESA.  First, he pointed out the ESA underrepresents real life.  The ESA currently protects fifteen-hundred species, but scientists speculate that number should be around six or eight thousand.  Next, he mentioned that species originally evolved before humans changed the earth’s landscape.  Wildlife originally developed when rivers regularly flooded and followed their natural course.  Now, humans use rivers for transportation and for development.  Creating and managing the workarounds needed to protect the species will only present more difficulty as human development continues. Tutchton summarized by emphasizing that he favors ESA litigation, as it helps to represent underrepresented points of view in critical ventures.

            Connor Pace


Alaska Wilderness League v. Jewell, 788 F.3d 1212 (9th Cir. 2015) (affirming the district court’s ruling that: (i) the Bureau of Safety and Environmental Enforcement’s approval of the challenged oil spill response plans was not arbitrary and capricious; (ii) the Endangered Species Act did not require the Bureau of Safety and Environmental Enforcement to consult with any environmental agencies before approving oil spill response plans; (iii) the Bureau of Safety and Environmental Enforcement was entitled to Chevron deference for its interpretation of the Oil Pollution Act; and (iv) the National Environmental Policy Act did not require the Bureau of Safety and Environmental Enforcement to do an environmental impact statement before approving an oil spill response plan).

The Outer Continental Shelf Lands Act (“OCSLA”) outlines the procedure for exploration and development of oil and gas resources offshore. This process has four stages. First, the Secretary of Interior creates a five-year leasing program under which operators may search and mine for oil and gas. Second, the Secretary must approve the leases under agreed upon terms and conditions. Third, the lessee must provide the Secretary with a plan of exploration and an Oil Spill Response Plan (“OSRP”) pursuant to the Clean Water Act (“CWA”). Fourth, after searching for oil and gas, and successfully finding either, the lessee has must submit a production and development plan to the Secretary for approval.

At the third stage, the Secretary of the Interior has delegated its power to the Bureau of Safety and Environmental Enforcement (“BSEE”) to approve OSRPs to prevent and respond to oil spills. The CWA requires these plans at four levels: national, regional, local, and individual. At the individual level, owners and operators must propose an OSRP for approval that outlines their response to a potential “worst case discharge” of oil or some other hazardous substance.

Shell Gulf of Mexico Inc. and Shell Offshore Inc. (collectively “Shell”) acquired three leases for offshore exploration and production—two leases in the Beaufort in 2005 and 2007, and one in the Chukchi Seas in 2008. Shell complied with all regulations at the time for intended exploration, but due to the Deepwater Horizon oil spill in 2010, the Secretary of the Interior placed a temporary moratorium on all offshore drilling. The United States Department of Interior required owners and operators to provide new information in all OSRPs after the moratorium ended. To comply with the new criteria, Shell updated its OSRPs for its three leases. BSEE approved the updated Beaufort and Chukchi Seas OSRPs.

Alaska Wilderness League, a coalition of environmental groups, sued Secretary of Interior, Sally Jewell, in her official capacity because of the approval of Shell’s three OSRPs. Shell intervened as a co-defendant. On cross-motions for summary judgment, the United States District Court for the District of Alaska (“district court”) ruled in favor of Jewell and Shell. Alaska Wilderness League appealed to the United States Court of Appeals, Ninth Circuit (“Court”). The Court reviewed the granting of summary judgment de novo and reviewed the record of the agency’s action under the arbitrary and capricious standard.

First, Alaska Wilderness League argued BSEE’s approval of the OSRPs was arbitrary and capricious because Shell assumed it would be able to recover ninety to ninety-five percent of any oil spilled in either of the seas via mechanical means. A figure that Alaska Wilderness League claimed was unrealistic and that Shell failed to support with any evidence. The Court did not agree with Alaska Wilderness League’s interpretation, finding instead that Shell could store, not recover, ninety to ninety-five percent of any spilled oil. Further, the Court found that BSEE did not rely on this information in approving Shell’s OSRPs. Therefore, the Court found that the record did not support Alaska Wilderness League’s argument. Accordingly, the Court concluded BSEE’s approval of the OSRPs was not arbitrary and capricious.

The Court next addressed Alaska Wilderness League’s argument that BSEE failed to consult with other agencies in order to comply with the Endangered Species Act (“ESA”). The Court disagreed. The Court reasoned that ESA only triggers consultation when the agency’s involvement is discretionary, and, in this case, BSEE’s approval of the OSRPs was non-discretionary. Therefore, the Court held that ESA did not require BSEE to do a consultation.

The Court then went through a two-step Chevron deference analysis to assess BSEE’s interpretation of the applicable sections of the CWA. At step one of its Chevron analysis, whether the statute in question is ambiguous, the Court found that the CWA was ambiguous in both its structure and its language. The Court found the CWA has ambiguous language because of three pertinent sections: (i) 33 U.S.C. § 1321(j)(5)(A)(i) requires an operator to “prepare and submit . . . a plan for responding, to the maximum extent practicable, to a worst case discharge;” (ii) § 1321(j)(5)(D) lists six requirements that the OSRP “shall” meet; and (iii) § 1321(j)(5)(E)(iii) states that if the OSRP meets all six requirements, then BSEE “shall” approve it.

Specifically, the Court found the text ambiguous as to whether BSEE has the discretion to consider any additional environmental factors in making its determination of an OSRP. The Court found that the “maximum extent practicable” language in § 1321(j)(5)(A)(i) suggested the agency had discretion in its approval of an OSRP. However, the Court also found §§ 1321(j)(5)(D) and 1321(j)(5)(E)(iii) to be a laundry list of requirements that an OSRP must meet. If an OSRP meets those requirements, then BSEE must approve the plan; removing any agency discretion. Additionally, the Court found the statute’s structure ambiguous because of the discretionary language in one section, and the rigid language in the one following it. The Court found this difference created “a statute whose halves do not correspond to each other – giving rise to ambiguity that calls for Chevron deference.” Under this finding of ambiguity, the Court found it must defer to BSEE’s interpretation of the statute as long as its interpretation is reasonable.

The Court then underwent the second step of the Chevron analysis to determine whether BSEE’s interpretation was reasonable. Courts must defer to an agency’s interpretation of an ambiguous statute as long as that interpretation is reasonable. The Court found that BSEE’s interpretation of the statute was reasonable. BSEE argued that § 1321(j)(5)(A)(i) mandated it to promulgate regulations that help operators follow the OSRP requirements listed in § 1321(j)(5)(D). Then, separately, § 1321(j)(5)(D)-(E) lists exactly what the OSRP shall include and the agency shall approve. The Court agreed with BSEE’s interpretation that the statute mandated the agency to publish regulations to outline how operators can comply with the list. The Court also agreed with BSEE’s interpretation that it could not consider anything more than the list when granting an OSRP. The Court, having found BSEE’s interpretation to be reasonable, deferred to the agency’s interpretation.

The Court also found that BSEE’s interpretation was consistent with longstanding agency policy. The Court explained how BSEE has a history of regulating in conformity with the goals of the Oil Pollution Act that amended the CWA. The legislative history of the Oil Pollution Act suggests that Congress meant to create specific requirements of OSRPs, not guidelines open to interpretation by the courts or agencies.

Lastly, the Court addressed Alaska Wilderness League’s four additional arguments. First, Alaska Wilderness League argued that the similarity in language between the requirements listed in § 1321(j)(5)(E) and the section of the statute governing federal response plans to spills subjected the approval of OSRPs to ESA consultation. However, the Court disagreed with this interpretation. Under the sections of the statute governing federal response plans, an ESA recommendation may prompt agency action, but the plan “shall include, but not be limited to” a number of factors. This federal response plan requirement, unlike that in § 1321(j)(5)(E), does not limit the factors to those listed.

Second, Alaska Wilderness League argued that the regulations contain no language to support approval of the OSRPs just because they address the clean up plan to some degree. The Court quickly dismissed this argument. The Court found that the statute states that the purpose of the OSRP is to prepare a response plan for an accident at sea resulting in release of oil, and that Congress ordered these plans be in compliance with “the Oil Pollution Act’s amendments to the Clean Water Act.” The Court deferred to BSEE’s interpretation that the OSRPs were sufficient and justly approved, despite any explicit language governing BSEE’s decision.

Third, Alaska Wilderness League argued that BSEE had discretion over whether OSRPs met the criteria in § 1321(j)(5)(E), thus triggering ESA consultation. The Court found this argument to be at odds with previous Supreme Court’s rulings. The Supreme Court previously held that “ESA cannot defeat an agency’s nondiscretionary statutory directive.” The Court held that BSEE’s act of granting OSRPs was nondiscretionary, and so it did not trigger any interagency review under ESA.

Lastly, Alaska Wilderness League claimed that BSEE violated the National Environmental Policy Act (“NEPA”) by failing to do an environmental impact statement (“EIS”) before approving the OSRPs. Under NEPA, all federal agencies must conduct an EIS before conducting any “major Federal action” that significantly affects the environment. However, the Court noted that there is an exception to this requirement when the environmental impact is the result of a decision over which the agency had no discretion. The Court ruled that because BSEE had no discretion over the approval of the OSRPs under the statute, it also had no discretion over the environmental impacts, making BSEE exempt from performing an EIS.

Accordingly, the Court affirmed the district court’s ruling.

D.W. Nelson, Senior Circuit Judge, dissenting.

Senior Circuit Judge Nelson agreed with the majority’s ruling that BSEE acted appropriately when it approved the OSRPs in question, but dissented to all other aspects of the majority opinion. Specifically, the dissent agreed with Alaska Wilderness League’s contention that BSEE’s action was discretionary, triggering an ESA consultation.

The dissent also disagreed with the majority’s finding that BSEE was exempt from performing a NEPA analysis. The dissent did not agree with the majority’s interpretation of the NEPA exception. The dissent argued that as a regulator of environmental consequences “the [BSEE] did in fact possess the kind of discretion that necessitated NEPA review.”

William James Tilton

Image: Deepwater Horizon oil spill, Gulf of Mexico. Flickr user Green Fire Productions, Creative Commons.