United States District Court, D. Montana, Great Falls Division
INDIGENOUS ENVIRONMENTAL NETWORK and NORTH COAST RIVER ALLIANCE, and NORTHERN PLAINS RESOURCE COUNCIL, et al., Plaintiffs,
UNITED STATES DEPARTMENT OF STATE, et al., Defendants and TRANSCANADA KEYSTONE PIPELINE and TRANSCANADA CORPORATION, Defendant-Intervenors.
MORRIS UNITED STATES DISTRICT COURT JUDGE
Indigenous Environmental Network and Northern Plains Resource
Council (collectively “Plaintiffs”) bring this
action against the United States Department of State
(“the Department”) and various other governmental
agencies and agents in their official capacities. Plaintiffs
allege that the Department violated the Administrative
Procedure Act (“APA”), the National Environmental
Policy Act (“NEPA”), and the Endangered Species
Act (“ESA”) when it published its Record of
Decision (“ROD”) and National Interest
Determination (“NID”) and issued the accompanying
Presidential Permit to allow defendant-intervenor TransCanada
Keystone Pipeline, LP (“TransCanada”) to
construct a cross-border oil pipeline known as Keystone XL
(“Keystone”). Plaintiffs have moved for summary
judgment. (Docs. 139 & 145.) The Department and
TransCanada (collectively “Defendants”) have
filed cross motions for summary judgment. (Docs. 170 &
Court detailed the background of this case in its Order
regarding the Department's and TransCanada's Motion
to Dismiss for Lack of Jurisdiction. (Doc. 99.) The Court
will only recite those facts that have arisen since its
Partial Order on Summary Judgment Regarding NEPA Compliance.
(“Partial Order”) (Doc. 210.)
Court directed the Department, in its Partial Order, to
supplement the 2014 final supplemental EIS (“2014
SEIS”) to consider the Mainline Alternative route as
approved by the Nebraska Public Service Commission. (Doc. 210
at 12.) The Court declined, however, to vacate the
Presidential Permit. The Court instead ordered the Department
to file a proposed schedule to supplement the 2014 SEIS in a
manner allowing appropriate review before TransCanada's
planned construction activities. Id.
Department published the Notice of Intent to Prepare a SEIS
in the Federal Register on September 17, 2018. 83 Fed. Reg.
46, 989 (Sept. 17, 2018). The Department published the Notice
of Availability of the Draft SEIS in the Federal Register on
September 24, 2018. 83 Fed. Reg. 48, 358 (Sept. 24, 2018).
The Court will address each remaining issue in turn.
should grant summary judgment where the movant demonstrates
that no genuine dispute exists “as to any material
fact” and the movant is “entitled to judgment as
a matter of law.” Fed.R.Civ.P. 56(a). Summary judgment
remains appropriate for resolving a challenge to a federal
agency's actions when review will be based primarily on
the administrative record. Pit River Tribe v. U.S. Forest
Serv., 469 F.3d 768, 778 (9th Cir. 2006).
standard of review governs Plaintiffs' claims. See W.
Watersheds Project v. Kraayenbrink, 632 F.3d 472, 481
(9th Cir. 2011); Bennett v. Spear, 520 U.S. 154, 174
(1997). The APA instructs a reviewing court to “hold
unlawful and set aside” agency action deemed
“arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. §
706(2)(A). A rational connection must exist between the facts
found and the conclusions made in support of the agency's
action. Kraayenbrink, 632 F.3d at 481. The Court
reviews the Department's compliance with NEPA and the ESA
under the arbitrary and capricious standard pursuant to the
APA. See Ctr. for Biological Diversity v. Nat'l
Highway Traffic Safety Admin., 538 F.3d 1172, 1194 (9th
Did the Department Violate NEPA when it Approved
first allege that the Department violated NEPA when it
approved Keystone. (Doc. 140 at 20.) NEPA serves as the
“basic national charter for protection of the
environment.” 40 C.F.R. § 1500.1(a). NEPA requires
federal agencies to prepare a “detailed
statement” for any “major Federal actions
significantly affecting the quality of the human
environment.” 42 U.S.C. § 4332(2)(C). The
agency's detailed statement is known as an environmental
impact statement (“EIS”), and must describe the
environmental impacts of the proposed action. 42 U.S.C.
§ 4332(2)(C)(i), (ii).
must include a “full and fair discussion” of the
effects of the proposed action, including those on the
“affected region, the affected interests, and the
locality.” 40 C.F.R. §§ 1502.1, 1508.27(a).
An agency also may be required to perform a supplemental
analysis “if significant new circumstances or
information relevant to environmental concerns and bearing on
the proposed action or its impacts” arise during the
NEPA review. 40 C.F.R. § 1502.9(c)(1)(ii). The Court
must ensure that the agency has taken a “hard
look” at the environmental consequences of its
decision. Churchill Cnty. v. Norton, 276 F.3d 1060,
1072 (9th Cir. 2001).
Purpose and Need Statement
challenge the reasonableness of the Department's purpose
and need statement. (Doc. 146 at 22.) Plaintiffs allege that
the Department violated NEPA when it focused the purpose and
need narrowly on TransCanada's private interests and
improperly restricted the scope of the 2014 SEIS.
requires agencies to “briefly specify the underlying
purpose and need to which the agency is responding in
proposing the alternatives including the proposed
action.” 40 C.F.R. § 1502.13. Courts afford
agencies “considerable discretion to define the purpose
and need of a project.” Westlands Water Dist. v.
U.S. Dept. of Interior, 376 F.3d 853, 866 (9th Cir.
2004). NEPA permits an agency to consider the needs and goals
of the parties involved in the application. 40 C.F.R. §
1508.18(b)(4). The agency may consider the context of the
action proposed, as well as the objectives of the private
applicant. Alaska Survival v. Surface Transp. Bd.,
705 F.3d 1073, 1085 (9th Cir. 2013). A purpose and need
statement will fail, however, if it unreasonably narrows the
alternatives in a manner that preordains the outcome.
Id. at 1085. The Court's duty requires it to
review the purpose and need statement for reasonableness.
Westlands Water Dist., 376 F.3d at 866.
purpose and need statement reasonably defines both
TransCanada's and the Department's purposes. For
TransCanada, “the primary purpose of [Keystone] is to
provide the infrastructure to transport Western Canadian
Sedimentary Basin (“WCSB”) crude oil from the
Canadian border, to existing pipeline facilities near Steele
City, Nebraska, for onward delivery to Cushing, Oklahoma, and
the Texas Gulf Coast area.” DOSKXLDMT0005756. Most of
the crude oil ultimately would be delivered to refineries in
the Gulf Coast area. Id. TransCanada maintains
contractual obligations to transport approximately 555, 000
barrels per day (“bpd”) of WCSB crude oil to the
Gulf Coast area. Id. Keystone would serve to fulfill
TransCanada's need to meet contractual demand, compete
with other transportation options, and to provide refiners a
reliable supply of light crude oil from the WCSB and the
Bakken. Id. at 5757.
Department's purpose stems from the President's
authority to require permits for transboundary projects.
Executive Order 13, 337 delegates to the Secretary of State
(“Secretary”) the authority to receive
applications for cross-border permits. 69 Fed. Reg. 25, 299
(April 30, 2004). As part of this delegation, the Secretary
must determine if issuance of a permit would serve the
national interest. Id. at 25, 300.
Department's purpose, therefore, stems from
Keystone's crossing of the international border between
the United States and Canada. This crossing requires a
cross-border permit. DOSKXLDMT0005757. The Department must
put forth a ROD approving or denying TransCanada's
cross-border permit application. Id. The Department
needed to consider Keystone's application and whether it
would serve the national interest. Id. The
Department reached a national interest determination based on
its evaluation of the Keystone's potential environmental,
cultural, economic, and other impacts. Id.
error exists in the Department's purpose and need
statement. The Department possesses broad discretion to
define the purpose of its actions. The Department may
consider private interests as part of its purpose and need.
See Alaska Survival, 705 F.3d at 1085. The
Department reasonably stated that it sought to determine
whether approval of the permit would serve the national
interest. DOSKXLDMT0005757. The Department's purpose and
need statement further proves reasonable when it considered
both TransCanada's private interests and the
Department's own requirements for issuing cross-border
Adequacy of Alternatives
next allege that the Department violated NEPA by failing to
consider a reasonable range of alternatives in approving
Keystone. (Doc. 146 at 24-25.) Plaintiffs allege that the
Department unreasonably dismissed alternatives that did not
satisfy TransCanada's purpose. Plaintiffs further contend
that the Department failed to consider feasible,
environmentally beneficial alternatives. Id.
Dismissal of Alternatives
allege that the Department only analyzed alternatives that
satisfied TransCanada's private needs. Id. at
23-24. NEPA requires that an agency “[r]igorously
explore and objectively evaluate all reasonable alternatives,
and for alternatives which were eliminated from detailed
study, briefly discuss the reasons for their having been
eliminated.” 40 C.F.R. § 1502.14. An agency's
consideration of alternatives is dictated by the
“nature and scope of the proposed action.”
Nw. Envtl. Def. Ctr. v. Bonneville Power Admin., 117
F.3d 1520, 1538 (9th Cir. 1997). An agency need not analyze
alternatives that do not meet the agency's purpose and
need. League of Wilderness Defs.-Blue Mountains
Biodiversity Project v. U.S. Forest Serv., 689 F.3d
1060, 1071 (9th Cir. 2012). However, “[t]he existence
of reasonable but unexamined alternatives renders an EIS
inadequate.” Ctr. for Biological Diversity v. U.S.
Dept. of Interior, 623 F.3d 633, 643 (9th Cir. 2010)
(quoting Friends of Southeast's Future v.
Morrison, 153 F.3d 1059, 1065 (9th Cir. 1998)).
Department adequately examined proposed alternatives and
reasonably excluded those that did not meet the Project's
purpose and need. The factors that the Secretary deemed
relevant to the national interest included the following:
“foreign policy; energy security; environmental,
cultural, and economic impacts; and compliance with
applicable law and policy.” DOSKXLDMT0002493. The 2014
SEIS articulated and analyzed the proposed Project and the
alternatives. The 2014 SEIS also provided a separate section
that detailed the alternatives considered, but excluded from
further consideration. Id. at 6082. The Department
set forth reasonable explanations for why each excluded
alternative did not meet the private needs of TransCanada.
Further, the Department explained why it excluded the
alternatives due to national interest factors including
environmental and cultural resources, or increased spill
risk. The Department's analysis of both the private
interest of TransCanada and the Department's national
interest considerations (i.e. environmental and cultural
impacts) proves reasonable in its dismissal of alternatives.
Range of Alternatives
next argue that the Department failed to analyze a reasonable
range of alternatives because it did not consider more
environmentally beneficial alternatives. (Doc. 146 at 24.)
The alternatives requirement “is the heart of the
environmental impact statement.” 40 C.F.R. §
1502.14. An agency must “[r]igorously explore and
objectively evaluate all reasonable alternatives, ”
including the “alternative of no action.” 40
C.F.R. § 1502.14(c). The range of alternatives
“must be bounded by some notion of feasibility.”
Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def. Council,
Inc., 435 U.S. 519, 551-52 (1978). The Court limits its
review of the sufficiency of alternatives to whether the
agency considered alternatives “necessary to permit a
reasoned choice.” Cal. v. Block, 690 F.2d 753,
767 (9th Cir. 1982).
Department set forth four alternatives, including a no action
alternative. DOSKXLDMT0005946. Each alternative chosen,
including the no action alternative, comports with the
Project's underlying purpose and need, as they address
both the private interests of TransCanada and the
Department's national interest. The 2014 SEIS's
comparison of the chosen alternatives also provides the
Department with a reasoned choice. See Block, 690
F.2d at 767. Accordingly, the range of alternatives analyzed
by the Department proves reasonable.
No Action Alternative
next allege that the Department failed to establish a true no
action alternative. (Doc. 140 at 26.) NEPA requires a
“full and fair discussion” of direct, indirect,
and cumulative effects of the proposed action. 40 C.F.R.
§§ 1502.1, 1502.16(a), (b), (h), 1508.25(c). NEPA
also requires that “all reasonable alternatives”
to the proposed action, including no action be addressed. 40
C.F.R. § 1502.14(a), (d). Part of the no action
alternative includes consideration of the “predictable
actions of others.” 46 Fed. Reg. 18, 026, 18, 027 (Mar.
Department's no action alternative articulates four
scenarios that would occur in the absence of the pipeline.
The Status Quo Baseline scenario represents the first
alternative. “Under the Status Quo Baseline, the
proposed Project would not be built.” DOSKXLDMT0006050.
Accordingly, the 2014 SEIS concludes that the environmental
conditions would remain the same under this scenario.
Id. The Department also analyzed three intermodal
options including a “Rail/Pipeline Scenario, ”
“Rail/Tanker Scenario, ” and a “Rail direct
to the Gulf Coast Scenario.” Id. at 6061-81.
The Department purported to analyze these scenarios as
illustrations of the likely potential impacts associated with
transport of crude oil in the absence of Keystone.
Id. at 61.
correctly note that NEPA obligates agencies to provide only a
single no action alternative. See 40 C.F.R. §
1502.14(d). More importantly, however, the Court must
consider whether providing more than one alternative proves
arbitrary and capricious. Plaintiffs rely on Conservation
Nw. v. Rey, 674 F.Supp.2d 1232 (W.D. Wash. 2009), in
which parties challenged a forest management plan as part of
the protracted litigation involving the spotted owl. The
Forest Service analyzed two no action alternatives that
represented its attempt to reconcile the latest iteration of
the forest management plan with the effects of recent
litigation. Id. at 1246-47. The district court
determined that having two no-action alternatives in the
environmental analysis proved irrational when only one
baseline could exist. Id. at 1247. The district
court determined that NEPA required the Forest Service
“to provide a single, comprehensive no-action
alternative that accurately represented the status quo at the
time of the 2007 Final Supplement.” Id.
contrast, Defendants argue that nothing in NEPA prohibits
analysis of multiple no action scenarios. Defendants cite
Mont. Wilderness Ass'n v. McAllister 658
F.Supp.2d 1249, 1264 (D. Mont. 2009); aff'd, 666 F.3d 549
(9th Cir. 2011); 460 Fed. App'x 667 (9th Cir. 2011),
where parties challenged the Forest Service's revised
travel management plan for the Gallatin National Forest. The
Forest Service evaluated two alternatives as the “no
action alternatives.” McAllister, 658
F.Supp.2d at 1264. Alternative 1 considered “off road
motorized vehicle as it was prior to 2001” when an
off-highway vehicle ban had been approved. Id.
Alternative 2 contemplated “the possibility that use
generally will continue on road and trails being used”
at the time of the proposed travel plan amendment.
Id. The district court determined that each of the
“no action alternatives” reasonably reflected the
exemptions, discretion, and latitude in the Forest
Service's current management policies. Id.
Ninth Circuit agreed that having two no-action alternatives
emphasized the validity of the Forest Service's
alternatives analysis. 460 Fed. App'x at 671. The Ninth
Circuit reasoned that the Forest Service had
“constructed two no action alternatives”
due to uncertainty as to how it ultimately would implement
the ban on off-highway travel. Id. (emphasis in
original). The Ninth Circuit deemed nothing unreasonable
about the Forest Service's formulation of these no-action
alternatives under those circumstances. Id. The same
reasoning applies to the alternatives articulated by the
Department. Uncertainty regarding what would happen in the
absence of Keystone supported the discussion of three no
action alternatives in the 2014 SEIS.
Keystone's Impact on Tar Sands Production
The Department's “Market Analysis”
suggest that the “market analysis” section of the
EIS improperly supports a conclusion that the same level of
tar sands production would be inevitable regardless of
whether the Department approved Keystone. Plaintiffs argue
that this unsubstantiated assumption led to an arbitrary
conclusion that Keystone would have no impact on the
world's climate. (Doc. 140 at 20.) NEPA's “full
and fair discussion” requirement directs an agency to
look at a Project's “direct” and
“indirect” effects. 40 C.F.R. §
1508.8(a)-(b). Indirect effects include those “caused
by the action and are later in time or farther removed in
distance, but are still reasonably foreseeable.” 40
C.F.R. § 1508.8(b).
argue, and the Court agrees, that the 2014 SEIS contained a
full and fair discussion of the market demand for oil. (Doc.
173 at 31.) The 2014 SEIS set forth 140 pages of modeling why
Keystone would not affect significantly the rate of
extraction of oil from Canadian oil sands. Id. at 36
(citing DOSKXLDMT0005760-5908). The 2014 SEIS determined that
the pipeline would not affect significantly oil extraction in
Canada. As a result of this determination, the 2014 SEIS
reasoned that the emissions associated with transporting 830,
000 bpd of tar sands crude oil (Keystone's capacity),
would occur regardless of the pipeline's existence. To
reach this conclusion, the 2014 SEIS analyzed numerous
factors, including the price of oil, transportation costs,
and supply and demand for oil. DOSKXLDMT0005760.
WCSB produced 1.8 million bpd of crude oil when the
Department issued the 2014 SEIS. The 2014 SEIS estimated that
production would increase to at least 5 million bpd by 2030.
Id. at 5789. The 2014 SEIS further concluded that
increased transportation capacity of oil from Canada by other
pipelines and rail transportation would meet demand.
Id. at 5803. The 2014 SEIS reasoned that existing
pipeline capacity stood at 3.3 million bpd in 2014. The 2014
SEIS also concluded that rail capacity supported 700, 000
bpd, and estimated that rail capacity would increase to 1.1
million bpd by the end of 2014. Id. at 5804.
Defendants argue that rail transportation would fill any void
in crude oil transportation in the absence of construction of
expanded pipeline capacity. (Doc. 173 at 35.)
Court must limit its review to determining whether the 2014
SEIS took a “hard look” at the effects of
Keystone on oil markets. See Norton, 276 F.3d at
1072. The Department met this “hard look”
requirement in its market analysis and its conclusion that
Keystone would not impact the rate of tar sands extraction.
The Department provided sufficient analysis that went beyond
mere assumptions of the rate of oil sands extraction rates in
2014. The Court finds no error in the Department's 2014
analysis of the rate of tar sands extraction and its impact
on climate change.
New Information Since 2014
argue, however, that significant new information has come
forth since 2014 regarding oil markets, rail transportation,
and greenhouse gas emissions that requires a supplement of
the Project's impacts. (Doc. 140 at 35.) NEPA imposes a
continuing duty on federal agencies to supplement new and
relevant information. Price Rd. Neighborhood Ass'n v.
U.S. Dep't of Transp., 113 F.3d 1505, 1508-09 (9th
Cir. 1997). NEPA requires a supplemental EIS if an
“agency makes substantial changes in the proposed
action that are relevant to environmental concerns; or there
are significant new circumstances or information relevant to
environmental concerns and bearing on the proposed action or
its impacts.” 40 C.F.R. § 1502.9(c)(i)-(ii). An
agency is not required, however, to “supplement an EIS
every time new information comes to light after the EIS is
finalized.” Marsh v. Or. Nat. Res. Council,
490 U.S. 360, 373 (1989). A supplement proves necessary
“if the new information [presented] is sufficient to
show the remaining action will ‘affec[t] the quality of
the human environment' in a significant manner or to a
significant extent not already considered[.]”
Id. at 374 (quoting 42 U.S.C. § 4332(2)(C)).
Change in Oil Markets
first argue that the Department failed to consider a decrease
in oil prices in the 2014 SEIS. (Doc. 140 at 27.) The 2014
SEIS analyzed the possibility of moderate fluctuations in oil
prices and the possibility of a low oil price scenario. The
2014 SEIS failed to address, however, the significant changes
in oil prices that have occurred since 2014. This lack of
analysis fails to satisfy NEPA's hard look requirement.
The 2014 SEIS stated that “pipeline constraints are
unlikely to impact production given expected supply-demand
scenarios, prices, and supply costs. Over the long term,
lower-than-expected oil prices could affect the outlook for
oil sand production[.]” DOSKXLDMT0005895. The
Department acknowledges that a significant drop in oil prices
materially could change the analysis. The 2014 SEIS
conditioned much of its analysis, however, on the price of
oil remaining high.
record demonstrates the need to supplement. The 2014 SEIS
stated the price of crude oil would range from $100 per
barrel to $140 per barrel over twenty years. Id. at
5864. The 2014 SEIS predicts the price of oil needed to fall
within the range of $65-$75 per barrel in order for Keystone
to break even. Id. at 5767. The 2014 SEIS concedes
that Keystone would be affected by supply costs if the oil
prices fell within or below that range. Id.
United States Energy Information Administration predicts that
the price of oil likely will remain below $100 for decades.
Id. at 1849. The record shows further that a
dramatic drop in oil prices occurred soon after publication
of the 2014 SEIS that lowered the price to nearly $38 per
barrel. The Department suggests that the current price of oil
stands at roughly $60 per barrel. (Doc. 173 at 49.) This drop
constitutes more than a mere fluctuation in oil prices.
also present evidence that the Environmental Protection
Agency called upon the Department to revisit the EIS's
conclusions after the 2015 oil prices dropped. (Doc. 140 at
36 (citing DOSKXLDMT0000973-74).) Oil prices have remained
below the “break-even” numbers established in the
2014 SEIS. This new and relevant information bears upon the
Department's earlier analysis in the 2014 SEIS. The Court
makes no suggestion of whether this information should alter
the Department's ...