Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 1 of 49

1 Nathan Matthews, CA Bar No. 264248 Sierra Club 2 2101 Webster Street, Suite 1300 3 Oakland, CA 94612 Phone: (415) 977-5695 4 Fax: (510) 208-3140 [email protected] 5 Counsel for Plaintiff Sierra Club 6 (Additional Counsel Listed on Signature Page) 7

8 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA 9

10 SIERRA CLUB; CENTER FOR ) BIOLOGICAL DIVERSITY; DINÉ ) 11 CITIZENS AGAINST RUINING OUR ) ENVIRONMENT; EARTHWORKS; ) 12 FORT BERTHOLD PROTECTORS OF ) 13 WATER AND EARTH RIGHTS; ) SOUTHERN UTAH WILDERNESS ) 14 ALLIANCE, THE WILDERNESS ) SOCIETY; and WESTERN RESOURCE ) 15 ADVOCATES, ) ) Case No. 4:18-cv-00524-HSG 16 Plaintiffs, ) 17 ) Related to Case No. 4:18-cv-00521-HSG v. ) 18 ) DAVID BERNHARDT, in his official ) 19 capacity as Secretary of the Interior; ) CITIZEN GROUP PLAINTIFFS’ 20 UNITED STATES BUREAU OF LAND ) MOTION FOR SUMMARY JUDGMENT MANAGEMENT; and UNITED STATES ) 21 DEPARTMENT OF THE INTERIOR, ) ) Judge: Hon. Haywood S. Gilliam, Jr. 22 Defendants. ) Date: December 5, 2019 23 ) Time: 2:00 p.m. ) Location: Courtroom 2, 4th Floor 24 ) 1301 Clay St., Oakland, CA 94612 ) 25 ) ) 26 ) 27 ) ) 28

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 2 of 49

1 NOTICE OF MOTION AND MOTION 2 PLEASE TAKE NOTICE that on December 5, 2019, at 2:00 p.m., or as soon thereafter as 3 possible, this motion will be heard before the Honorable Haywood S. Gilliam. Plaintiffs Sierra 4 Club, et al. (the Citizen Group Plaintiffs) move for summary judgment pursuant to Federal Rule of 5 Civil Procedure 56(a). As set forth in the Citizen Group Plaintiffs’ accompanying memorandum, the 6 Federal Defendants’ decision to rescind the Bureau of Land Management 2015 Hydraulic Fracturing 7 Rule, 82 Fed. Reg. 61,924 (Dec. 29, 2017), violated the Administrative Procedure Act, the National 8 Environmental Policy Act, and the Endangered Species Act. Because there are no genuine issues of 9 material fact and Plaintiffs are entitled to judgment as a matter of law, this Court should enter 10 summary judgment for the Citizen Group Plaintiffs on all four causes of action in the First Amended 11 Complaint, ECF No. 55. See Fed. R. Civ. P. 56(a). 12 The Citizen Group Plaintiffs’ standing to bring this case is demonstrated by the 13 accompanying declarations, which are attached as Exhibit C. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG (Related to Case No. 4:18-cv-00521-HSG) i

Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 3 of 49

1 TABLE OF CONTENTS 2 INTRODUCTION ...... 1 3 FACTUAL BACKGROUND ...... 2 4 I. BLM PROMULGATES THE 2015 RULE TO PROTECT PUBLIC AND TRIBAL 5 LANDS ...... 2 6 II. BLM REPEALS THE 2015 RULE ...... 5 7 STANDARD OF REVIEW ...... 6 8 ARGUMENT ...... 6 9 I. BLM’S REPEAL WAS ARBITRARY AND CAPRICIOUS ...... 7 10 A. BLM’s Own Analysis Shows that the Repeal Will not Promote Oil and Gas Development ...... 8 11 B. The 2015 Rule Is not Duplicative of State and Tribal Regulations ...... 9 12 C. BLM Arbitrarily Ignored the 2015 Rule’s Benefits ...... 11 13 1. BLM Ignored the Benefits that the 2015 Rule Provided Over State and 14 Tribal Regulations ...... 12

15 2. BLM Failed to Offer a Reasoned Explanation for Reversing Its Position on 16 the 2015 Rule’s Benefits ...... 13 a. Accidents Are not a “Rarity” ...... 13 17 b. BLM Failed to Explain Its Reversal on the Benefits of Tanks ...... 14 18 c. BLM Ignored the Benefit of Increased Oversight and Information ....16 19 II. THE REPEAL DISREGARDS BLM’s STATUTORY DUTIES AND IS CONTRARY TO 20 LAW ...... 18 21 A. BLM Adopted the 2015 Rule to Carry Out Its Statutory Obligations ...... 19

22 B. BLM Failed to Provide a Reasoned Explanation for Reversing Its Earlier 23 Conclusion that It Had a Legal Obligation to Promulgate the 2015 Rule ...... 20

24 C. The Repeal Unlawfully Delegates BLM’s Duties Under FLPMA, the MLA, and the IMLA ...... 23 25 III. THE REPEAL VIOLATES THE ENDANGERED SPECIES ACT ...... 25 26 27 A. BLM Must Consult FWS Before Taking Actions that May Affect ESA-Listed Species ...... 25 28 Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG ii

Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 4 of 49

1 B. BLM Violated the ESA by Failing to Consult FWS About the Repeal ...... 27

2 1. The Repeal May Adversely Affect ESA-Listed Species ...... 27 3 a. Waste Storage Pits ...... 28 4 b. Preventing Surface and Groundwater Pollution ...... 29 5 c. Disclosure of Water Source and Volume ...... 29 6 2. BLM Violated the ESA by Failing to Consult with FWS ...... 30

7 IV. THE REPEAL VIOLATES NEPA ...... 31 8 A. BLM Failed to Take a Hard Look at the Repeal’s Impacts ...... 31 9 1. BLM Failed to Take a Hard Look at the Impacts of Storing Wastes in 10 Pits, Rather than Tanks ...... 32

11 2. BLM Failed to Take a Hard Look at the Repeal’s Impacts on Tribal Lands ...34 12 B. BLM Violated NEPA by not Preparing an EIS ...... 36 13 CONCLUSION ...... 40 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG iii Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 5 of 49

1 TABLE OF AUTHORITIES

2 Page(s)

3 Cases 4 Anderson v. Evans, 5 371 F.3d 475 (9th Cir. 2004) ...... 36, 40 6 Assiniboine & Sioux Tribes of Fort Peck Indian Reservation v. Bd. of Oil & Gas Conservation of Mont., 7 792 F.2d 782 (9th Cir. 1986) ...... 20, 23, 24, 25 8 Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, 9 462 U.S. 87 (1983) ...... 34 10 Blue Mountains Biodiversity Project v. Blackwood, 161 F.3d 1210 (9th Cir. 1988) ...... 32, 36 11 Boesche v. Udall, 12 373 U.S. 472 (1963) ...... 19 13 California v. Azar, 14 911 F.3d 558 (9th Cir. 2018) ...... 20 15 California v. BLM, 286 F. Supp. 3d 1054 (N.D. Cal. 2018) ...... 9, 11, 13 16 Cal. ex rel. Becerra v. U.S. Dep’t of the Interior, 17 -- F. Supp. 3d --, No. 4:17-cv-5948-SBA, 2019 WL 2223804 (N.D. Cal. Mar. 29, 18 2019) ...... 18 19 Cal. ex rel. Lockyer v. U.S. Dep’t of Agric., 459 F. Supp. 2d 874 (N.D. Cal. 2006) ...... 38 20 Cal. ex rel. Lockyer v. U.S. Dep’t of Agric., 21 575 F.3d 999 (9th Cir. 2009) ...... 26, 30 22 Citizens for Better Forestry v. U.S. Dep’t of Agric., 23 481 F. Supp. 2d 1059 (N.D. Cal. 2007) ...... 26, 30, 31, 38

24 Citizens for Better Forestry v. U.S. Dep’t of Agric., 632 F. Supp. 2d 968 (N.D. Cal. 2009) ...... 37 25 Conner v. Burford, 26 848 F.2d 1441 (9th Cir. 1988) ...... 26, 31 27 Ctr. for Biological Diversity v. BLM, 28 937 F. Supp. 2d 1140 (N.D. Cal. 2013) ...... 39

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG iv

Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 6 of 49

1 Ctr. for Biological Diversity v. Nat’l Highway Traffic Safety Admin., 538 F.3d 1172 (9th Cir. 2008) ...... 12–13, 32, 39 2 Ctr. for Biological Diversity v. Zinke, 3 900 F.3d 1053 (9th Cir. 2018) ...... 9, 11 4 Ctr. for Food Safety v. Vilsack, 5 No. C 08-00484 JSW, 2009 WL 3047227 (N.D. Cal. Sept. 21, 2009) ...... 35

6 Diné Citizens Against Ruining Our Env’t v. Bernhardt, 923 F.3d 831 (10th Cir. 2019) ...... 33 7 8 Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016) ...... 20 9 Exec. Bus. Media, Inc. v. U.S. Dep’t of Def., 10 3 F.3d 759 (4th Cir. 1993) ...... 23

11 Fed. Commc’ns Comm’n v. Fox Television Stations, Inc., 556 U.S. 502 (2009) ...... 7, 13, 16, 20, 22 12 13 Forest Guardians v. Forsgren, 478 F.3d 1149 (10th Cir. 2007) ...... 26 14 Friends of Alaska Nat’l Wildlife Refuges v. Bernhardt, 15 -- F. Supp. 3d --, No. 3:18-cv-00029-SLG, 2019 WL 1437596 (D. Alaska Mar. 29, 2019) ...... 16, 22 16 17 Fund for Animals v. Kempthorne, 538 F.3d 124 (2d Cir. 2008)...... 23 18 G.H. Daniels III & Assocs., Inc. v. Perez, 19 626 F. App’x 205 (10th Cir. 2015) ...... 23

20 Hughes River Watershed Conservancy v. Glickman, 21 81 F.3d 437 (4th Cir. 1996) ...... 12 22 Indep. Petroleum Ass’n of Am. v. DeWitt, 279 F.3d 1036 (D.C. Cir. 2002) ...... 19 23 Karuk Tribe v. U.S. Forest Serv., 24 681 F.3d 1006 (9th Cir. 2012) (en banc) ...... 26, 30

25 Kern v. BLM, 26 284 F.3d 1062 (9th Cir. 2002) ...... 31, 37–38 27 Klamath-Siskiyou Wildlands Ctr. v. BLM, 387 F.3d 989 (9th Cir. 2004) ...... 31 28

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG v

Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 7 of 49

1 Lands Council v. Powell, 395 F.3d 1019 (9th Cir. 2005) ...... 31 2 Michigan v. EPA, 3 135 S. Ct. 2699 (2015) ...... 7, 12 4 Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto Ins. Co., 5 463 U.S. 29 (1983) ...... 7, 8, 9, 11

6 Muckleshoot Indian Tribe v. U.S. Forest Serv., 177 F.3d 800 (9th Cir. 1999) ...... 33 7 8 Nat’l Parks & Conservation Ass’n v. Babbitt, 241 F.3d 722 (9th Cir. 2001) ...... 37, 39 9 Nev. Power Co. v. Watt, 10 711 F.2d 913 (10th Cir. 1983) ...... 19

11 N.M. ex rel. Richardson v. BLM, 565 F.3d 683 (10th Cir. 2009) ...... 33 12 13 Ocean Advocates v. U.S. Army Corps of Eng’rs, 402 F.3d 846 (9th Cir. 2005) ...... 38, 39 14 Or. Nat. Desert Ass’n v. Rose, 15 921 F.3d 1185 (9th Cir. 2019) ...... 22, 32

16 Or. Nat. Res. Council Fund v. Brong, 17 492 F.3d 1123 (9th Cir. 2007) ...... 32 18 Organized Vill. of Kake v. U.S. Dep’t of Agric., 795 F.3d 956 (9th Cir. 2015) (en banc) ...... 8, 13, 18 19 Pac. Rivers Council v. Thomas, 20 30 F.3d 1050 (9th Cir. 1994) ...... 31

21 Regents of Univ. of Cal. v. Dep’t of Homeland Sec., 22 279 F. Supp. 3d 1011 (N.D. Cal. 2018) ...... 23 23 Robertson v. Methow Valley Citizens Council, 490 U.S. 332 (1989) ...... 31 24 Sierra Club v. Bosworth, 25 510 F.3d 1016 (9th Cir. 2007) ...... 37 26 Sierra Club v. Marsh, 27 816 F.2d 1376 (9th Cir. 1987) ...... 25 28

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG vi

Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 8 of 49

1 Standing Rock Sioux Tribe v. U.S. Army Corps of Eng’rs, 255 F. Supp. 3d 101 (D.D.C. 2017) ...... 34 2 Topaz Beryllium Co. v. United States, 3 649 F.2d 775 (10th Cir. 1981) ...... 19 4 U.S. Telecom Ass’n v. Fed. Commc’ns Comm’n, 5 359 F.3d 554 (D.C. Cir. 2004) ...... 23, 25

6 United States v. Carpenter, 526 F.3d 1237 (9th Cir. 2008) ...... 23 7 8 W. Energy All. v. Salazar, 709 F.3d 1040 (10th Cir. 2013) ...... 19 9 W. Watersheds Project v. Kraayenbrink, 10 632 F.3d 472 (9th Cir. 2011) ...... 6, 26, 30, 32, 36

11 White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980) ...... 35–36 12 13 Woods Petroleum Corp. v. Dep’t of the Interior, 47 F.3d 1032 (10th Cir. 1995) (en banc) ...... 20 14 Wyoming v. Zinke, 15 871 F.3d 1133 (10th Cir. 2017) ...... 5, 6

16 Statutes 17 5 U.S.C. § 706 ...... 6 18 16 U.S.C. § 1531 ...... 25 19 16 U.S.C. § 1536 ...... 25, 26 20 16 U.S.C. § 1540 ...... 6 21 25 U.S.C. § 396d ...... 20 22 23 30 U.S.C. § 187 ...... 19 24 30 U.S.C. § 189 ...... 19 25 30 U.S.C. § 226 ...... 19

26 42 U.S.C. § 4332 ...... 36

27 43 U.S.C. § 1701 ...... 19 28 43 U.S.C. § 1702 ...... 19 Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG vii

Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 9 of 49

1 43 U.S.C. § 1732 ...... 19

2 43 U.S.C. § 1733 ...... 19

3 43 U.S.C. § 1740 ...... 19 4 Regulations 5 25 C.F.R. § 211.4 ...... 20 6 40 C.F.R. § 1500.1 ...... 31 7 40 C.F.R. § 1502.4 ...... 37 8 40 C.F.R. § 1508.13 ...... 36 9 10 40 C.F.R. § 1508.18 ...... 36 11 40 C.F.R. § 1508.27 ...... 37, 38, 39, 40 12 50 C.F.R. § 402.02 ...... 26

13 50 C.F.R. § 402.12 ...... 26

14 50 C.F.R. § 402.13 ...... 26 15 50 C.F.R. § 402.14 ...... 25, 26, 27, 30, 31 16 Federal Register 17 77 Fed. Reg. 27,691 (May 11, 2012) ...... 5 18 78 Fed. Reg. 31,636 (May 24, 2013) ...... 23 19 80 Fed. Reg. 16,128 (Mar. 26, 2015) ...... passim 20 21 82 Fed. Reg. 16,093 (Mar. 28, 2017) ...... 1, 5 22 82 Fed. Reg. 34,464 (July 25, 2017) ...... 6 23 82 Fed. Reg. 61,924 (Dec. 29, 2017) ...... passim

24 Other Authorities

25 Fed. R. Civ. P. 56(a) ...... 6 26 Council on Envtl. Qual., Environmental Justice, Guidance Under the National 27 Environmental Policy Act (1997) ...... 34 28

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG viii

Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 10 of 49

1 MEMORANDUM OF POINTS AND AUTHORITIES 2 INTRODUCTION 3 Plaintiffs Sierra Club, et al. (the Citizen Group Plaintiffs) challenge the U.S. Bureau of Land 4 Management’s (BLM) repeal of a 2015 regulation, 80 Fed. Reg. 16,128 (Mar. 26, 2015) (the 2015 5 Rule), that would have prevented drinking water contamination and protected public lands, tribal 6 lands, and wildlife from accidents, spills, and other impacts caused by oil and gas development. Just 7 a few weeks after taking office in 2017, the new presidential administration announced that it would 8 eliminate the 2015 Rule, which BLM had spent nearly seven years developing and defending in 9 court. The decision to repeal the 2015 Rule, 82 Fed. Reg. 61,924 (Dec. 29, 2017) (the Repeal), 10 leaves more than 700 million acres (about 1.1 million square miles) of BLM-managed lands 11 vulnerable and subject to outdated standards that fail to protect water, wildlife, and other resources. 12 As demonstrated below, the Repeal violates the Administrative Procedure Act (APA), the 13 Federal Land Policy and Management Act (FLPMA), the Mineral Leasing Act (MLA), the Indian 14 Mineral Leasing Act (IMLA), the National Environmental Policy Act (NEPA), and the Endangered 15 Species Act (ESA). 16 First, the Repeal violates the APA because its premise of “Promoting Energy Independence 17 and Economic Growth,” Exec. Order No. 13,783, 82 Fed. Reg. 16,093 (Mar. 28, 2017), is contrary 18 to the record. BLM’s own analysis found that repealing the 2015 Rule would result in no increase in 19 oil and gas development on federal and tribal lands. BLM’s other explanations for the Repeal also 20 conflict with the record. For example, while the agency asserts that the 2015 Rule is “duplicative” 21 of state and tribal regulations, its own assessment shows that many states’ and tribes’ laws afford far 22 less protection than the 2015 Rule. Instead of eliminating “duplicative” regulations, the Repeal will 23 spare companies very modest compliance costs while excusing them from the oversight necessary to 24 protect public and tribal lands. 25 Second, the Repeal violates BLM’s obligations under FLPMA, the MLA, and the IMLA. 26 Those laws charge BLM with managing and protecting federally-owned lands, and acting as trustee 27 for Indian lands. BLM recognized that the 2015 Rule’s requirements were necessary to fulfill those 28 statutory responsibilities, and that neither its previous regulations, nor the existing patchwork of state

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 1 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 11 of 49

1 and tribal laws, could substitute for an adequate level of federal environmental protection. BLM 2 never reconciled the Repeal, and its rapid about-face, with the agency’s statutory obligations to 3 protect those lands. 4 Third, BLM violated the ESA by failing to consult with the U.S. Fish and Wildlife Service 5 (FWS) to ensure that the Repeal would not jeopardize the continued existence of endangered or 6 threatened species or adversely modify their critical habitat. 7 Finally, the agency violated NEPA by failing to take a hard look at the Repeal’s impacts, 8 such as allowing hundreds of new waste pits annually, and the Repeal’s disparate impacts on tribal 9 lands. Further, BLM violated NEPA by failing to prepare an Environmental Impact Statement 10 (EIS). Instead, the agency arbitrarily claimed that the Repeal will have no significant impact on the 11 environment despite eliminating protections at thousands of new oil and gas wells each year. 12 FACTUAL BACKGROUND 13 I. BLM PROMULGATES THE 2015 RULE TO PROTECT PUBLIC AND TRIBAL 14 LANDS.

15 Prior to 2015, BLM had not revised its oil and gas regulations since the 1980s—three 16 decades ago. 80 Fed. Reg. at 16,131. Since the 1980s, however, oil and gas development has 17 changed substantially due to the growth of hydraulic fracturing. Hydraulic fracturing is a technique 18 in which companies inject water, chemicals, and sand under high pressures through an oil and gas 19 well into geologic formations to fracture the rock and thereby release oil and gas. Id. at 16,130–31. 20 While such techniques have existed for decades, their intensity, scale and complexity have increased 21 dramatically in recent years. Id. at 16,128; see also DOIAR7260 (Environmental Protection Agency 22 (EPA) testimony).1 Today, companies combine hydraulic fracturing with advanced horizontal 23 1 BLM uses six separate Bates labeling prefixes for the Administrative Record in this case, which 24 Citizen Group Plaintiffs replicate in this brief. Documents with the prefixes “DOIAR” and “DOIPS” 25 are documents included in the administrative record originally compiled for the development of the 2015 Rule. Documents with the prefixes “HFRR_” and “HFRR_DEL” are documents originally 26 compiled as part of the administrative record for the Repeal. BLM did not lodge the “HFRR_DEL” documents with the court because it considers those documents to be deliberative. See ECF No. 87 27 at 2 (all docket citations are to Case No. 4:18-cv-000524-HSG, unless otherwise noted). The parties 28 stipulated that “[d]uring merits briefing, the Parties may cite [these] deliberative documents,” and that “the Parties will attach any deliberative documents they cite to their merits briefs.” Id. Citizen

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 2 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 12 of 49

1 drilling technologies to construct wellbores that are nearly three miles long and where fracturing 2 uses millions of gallons of water per well. DOIAR7260; see also HFRR_101618–19 (illustration). 3 In addition to dramatically larger operations, hydraulic fracturing has become much more common, 4 driving a rapid expansion of oil and gas development across the country. 80 Fed. Reg. at 16,131. 5 By the early 2010s, BLM recognized that its regulations were decades out of date and 6 proving inadequate to address the new environmental risks posed by the modern hydraulic fracturing 7 boom. See id. (explaining that BLM “regulations were established in 1982 and last revised in 1988, 8 long before the latest hydraulic fracturing technologies were developed or became widely used”). 9 Numerous experts,2 federal agencies,3 Congress and individual legislators,4 Indian tribes,5 and the 10 public6 called for BLM to update and strengthen its regulations. For example, EPA explained that 11 the chemicals, huge volumes of water, and high injection pressures used in modern hydraulic 12 fracturing “raise serious concerns regarding exposure of hydraulic fracturing fluids to drinking water 13 resources.” DOIAR7260. These concerns were well-documented: the record contains extensive 14 evidence of groundwater contamination and other accidents resulting from inadequately-constructed 15 wells. In addition, companies commonly store hydraulic fracturing wastes in large earthen pits, 16

17 Group Plaintiffs have accordingly attached as Exhibit A all administrative record documents with 18 the “HFRR_DEL” prefix that are cited in this brief. Finally, BLM filed two supplemental sets of administrative record documents with the prefixes “HFRR_SUPP_1” and “HFRR_SUPP_2” after 19 the rest of the administrative record. See ECF No. 106 at 1–2; ECF No. 108 at 1–2. 2 DOIAR29551–617; DOIPS292–95 (American Water Works Association); DOIPS365166–217; 20 DOIPS365410–49 (conservation groups); DOIPS391527 (American Public Health Association). 3 See, e.g., DOIPS389643–45; DOIPS389649–59 (Secretary of Energy Advisory Committee calling 21 on government to update its regulations to prevent and reduce hydraulic fracturing’s environmental 22 impacts). 4 DOIAR12592; DOIAR12596–97 (2012 Congressional report noting that BLM’s decades-old 23 regulations did not reflect current technologies or growth in their use, and that 30% of oil and gas wells on federal land were hydraulically fractured in, near or below an underground source of 24 drinking water); see also DOIAR29650–57 (congressional letter). 5 25 DOIAR49636–39 (Saginaw Chippewa Tribe); DOIAR62967–85 (Fort Peck Tribes); DOIPS365491–96 (Standing Rock Sioux Tribe); DOIPS365500–25 (Eastern Shoshone Tribe); see 26 also, e.g., DOIAR5510–13; DOIAR5619–30; DOIAR5641–43; DOIAR5728–33; DOIAR5735–36; DOIAR5739 (testimony from North Dakota hearing); DOIAR10061–66 (Jan. 12, 2012 tribal 27 consultation in Billings, Montana). 6 28 80 Fed. Reg. at 16,131 (noting that BLM received over 1.5 million public comments); DOIAR20573 (New York Times editorial).

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 3 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 13 of 49

1 which often leak and have contaminated groundwater in numerous cases. See infra pp. 14–16, 28– 2 30, 32–33. BLM also recognized that its statutory obligations for managing public lands, and as 3 trustee for Indian lands, required it to update its regulations. See infra pp. 19–25. 4 BLM undertook an extensive rulemaking lasting nearly five years, in which it held numerous 5 public forums and tribal consultation sessions. 80 Fed. Reg. at 16,131–32. BLM also accepted two 6 rounds of public comment during which it received input from more than 1.5 million members of the 7 public. Id. at 16,131. On March 26, 2015, BLM issued the 2015 Rule, which included four main 8 elements, id. at 16,128–30:

9 • It updated BLM’s well construction and testing requirements to account for modern 10 hydraulic fracturing practices and prevent accidents. Because faulty well construction is a 11 major source of groundwater contamination, see infra p. 14 n.10, the 2015 Rule adopted 12 requirements based on industry best practices such as confirming the adequacy of well 13 cementing and running mechanical integrity tests. See Regulatory Impact Analysis for the 14 2015 Rule (2015 RIA) at 37–38 (HFRR_24272–390) (explaining that the 2015 Rule adopts 15 industry standard best practices); HFRR_10119–20.

16 • It required the use of tanks instead of pits for storing fracturing wastes. BLM explained that 17 “the storage of flowback, or recovered fluid in pits, poses a risk of impacts to air, water, and 18 wildlife.” 80 Fed. Reg. at 16,162; see also infra pp. 14–16, 28–30, 32–33 (describing harms 19 from pits). In contrast, requiring above-ground tanks protects wildlife, and largely eliminates 20 the risk of flowback fluids damaging the environment because tanks are less prone to leaks 21 and any leaks are readily identifiable when they do occur. Environmental Assessment for 22 2015 Rule (2015 EA) at 43 (HFRR_23849–931).

23 • It provided crucial new information, along with additional oversight by BLM. For the first 24 time, the 2015 Rule required BLM to review and approve all hydraulic fracturing operations. 25 See 80 Fed. Reg. at 16,147, 16,153. This advance review was structured so the agency could 26 ensure that no pathways would allow gas or fluids to escape the underground zone being 27 fractured and contaminate aquifers or cause other accidents. Id.; see also infra pp. 16–18. 28

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 4 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 14 of 49

1 • It required public disclosure of the chemicals used for fracturing, many of which can be 2 hazardous. See, e.g., DOIAR29563–64; DOIPS64073–76; DOIPS392791–822. Chemical 3 disclosure is necessary for BLM to effectively address contamination incidents. 77 Fed. Reg. 4 27,691, 27,700–02 (May 11, 2012). It also allows firefighters, paramedics, and medical 5 professionals to train for (and safely address) accidents at oil and gas sites, while 6 incentivizing oil and gas companies to use safer chemicals. See DOIPS365428. 7 The compliance costs for these additional protections were very modest: they amounted to only 8 0.1% to 0.2% of the cost of drilling each well, which BLM recognized was too insignificant to 9 discourage energy development on federal and tribal lands. 80 Fed. Reg. at 16,195, 16,208. 10 Unfortunately, the 2015 Rule’s benefits were never realized. Several of the Defendant- 11 Intervenors in this case challenged the 2015 Rule in in the District of Wyoming, and district court 12 orders in that litigation prevented the 2015 Rule from taking effect. See Wyoming v. Zinke, 871 13 F.3d 1133, 1138–39 (10th Cir. 2017) (Zinke). 14 II. BLM REPEALS THE 2015 RULE. 15 While a Tenth Circuit appeal of the district court’s ruling was pending, a new presidential 16 administration took office in January 2017. Zinke, 871 F.3d at 1140. During the first few weeks of 17 the new administration, Defendant-Intervenors Western Energy Alliance (WEA), Independent 18 Petroleum Association of America, and American Petroleum Institute (API) began lobbying the new 19 Interior Department officials to eliminate the 2015 Rule. See HFRR_078873, HFRR_078888–89 20 (API); HFRR_SUPP1_110783–84 (WEA). Then, shortly before oral argument in March 2017, the 21 Tenth Circuit sua sponte directed BLM to confirm whether its positions defending the 2015 Rule 22 (argued in 2016 appellate briefs) “remain the same, or have now changed.” HFRR_110031–32. 23 The new administration seized the opportunity presented by the Tenth Circuit. Six days after 24 the court’s inquiry, BLM reversed position and announced that it planned to rescind the 2015 Rule. 25 HFRR_110034–35. Later that month, President Trump and Secretary of the Interior Ryan Zinke 26 formally directed BLM to rescind the 2015 Rule. 82 Fed. Reg. at 16,096; HFRR_019417. 27 Following these instructions, BLM moved swiftly to propose and then finalize the Repeal. In 28 contrast to the nearly five-year process of developing the 2015 Rule, BLM completed notice-and-

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 5 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 15 of 49

1 comment rulemaking on the Repeal in just over five months. See 82 Fed. Reg. 34,464 (July 25, 2 2017) (proposed Repeal); 82 Fed. Reg. 61,924 (Dec. 29, 2017) (final Repeal).7 3 The Repeal leaves oil and gas development on federal and tribal lands subject to BLM’s 4 outdated 1980s-era regulations, which the agency had acknowledged were inadequate to address the 5 risks to groundwater and other resources from modern hydraulic fracturing. 6 STANDARD OF REVIEW 7 A party is entitled to summary judgment if “there is no genuine dispute as to any material 8 fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The Citizen 9 Group Plaintiffs’ first, second and third claims for relief challenge the Repeal pursuant to the APA. 10 ECF No. 55 ¶¶ 105–123 (alleging violations of the APA, MLA, FLPMA, IMLA and NEPA). When 11 reviewing agency decisions under the APA, “the court shall review the whole record” of the 12 agency’s decision and “shall hold unlawful and set aside agency action . . . found to be arbitrary, 13 capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706. 14 The Citizen Group Plaintiffs bring their fourth claim under the ESA’s citizen suit provision, 15 rather than the APA. See 16 U.S.C. § 1540(g); ECF No. 55 ¶¶ 11, 124–28. Review of ESA citizen 16 suit claims are not limited to the administrative record, although BLM’s determinations are assessed 17 on an arbitrary and capricious basis. W. Watersheds Project v. Kraayenbrink, 632 F.3d 472, 481, 18 497 (9th Cir. 2011) (Kraayenbrink).

19 ARGUMENT 20 The Citizen Group Plaintiffs are entitled to summary judgment on their claims. First, the 21 Repeal is arbitrary and capricious because none of the rationales BLM supplied are supported by the 22 record, and BLM has failed to explain its departure from contrary conclusions it reached in 2015. 23

24 7 The agency’s haste resulted from an apparent desire to prevent the 2015 Rule from taking effect. 25 In response to BLM’s planned repeal of the 2015 Rule, the Tenth Circuit dismissed the pending appeals and ordered the lower court ruling vacated. Zinke, 871 F.3d at 1146. To prevent that 26 vacatur from allowing the 2015 Rule to take effect, BLM managed to complete its Repeal shortly before the Tenth Circuit’s mandate was scheduled to issue in January 2018. See Order at 4, 27 Wyoming v. Zinke, No. 16-8068 (Dec. 27, 2017), Doc No. 01019921125; 82 Fed. Reg. at 61,946–47 28 (issuing final Repeal two days after Tenth Circuit order to issue mandate, and waiving APA provisions that normally delay regulatory effective date for 30 days).

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 6 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 16 of 49

1 Second, the Repeal fails to satisfy BLM’s statutory obligation to protect public and tribal lands under 2 FLPMA, the MLA, and the IMLA. Third, BLM violated the ESA by failing to consult FWS about 3 the Repeal despite its clear potential to adversely affect endangered species and their habitat. 4 Finally, BLM violated NEPA by providing only a cursory environmental analysis and failing to 5 prepare an EIS taking a hard look at the Repeal’s impacts. 6 I. BLM’S REPEAL WAS ARBITRARY AND CAPRICIOUS. 7 BLM offered three reasons for the Repeal: (a) that it would promote oil and gas drilling by 8 “reduc[ing] unnecessary regulatory burdens on energy development,” 82 Fed. Reg. at 61,938, (b) 9 that the 2015 Rule was purportedly “duplicative” of existing state and tribal regulations, id. at 10 61,931, and (c) that “[a]ny marginal benefits provided by the 2015 rule do not outweigh the rule’s 11 costs,” id. at 61,939. Each of these rationales conflicts with the record, and the Repeal should 12 therefore be set aside as arbitrary and capricious. 13 An agency acts arbitrarily and capriciously in violation of the APA when it provides “an 14 explanation for its decision that runs counter to the evidence before the agency,” or where it has 15 “failed to consider an important aspect of the problem.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. 16 State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983) (State Farm). For example, the APA’s 17 standard of reasoned decisionmaking requires agencies to consider both the advantages and 18 disadvantages—in other words, both the costs and benefits—of their decisions. Michigan v. EPA, 19 135 S. Ct. 2699, 2707 (2015). 20 When an agency changes positions, the APA requires it to (a) “display awareness that it is 21 changing position;” (b) show that the new policy is permissible under governing statutes; (c) explain 22 why the agency believes the new policy is better than the old one; and (d) “show that there are good 23 reasons for the new policy,” which requires a more detailed explanation where the “new policy rests 24 upon factual findings that contradict those which underlay its prior policy; or when its prior policy 25 has engendered serious reliance interests that must be taken into account.” Fed. Commc’ns Comm’n 26 v. Fox Television Stations, Inc., 556 U.S. 502, 515–16 (2009) (FCC v. Fox) (emphasis in original). 27 As to the fourth factor, “unexplained conflicting findings about the environmental impacts of a 28

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 7 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 17 of 49

1 proposed agency action violate the APA.” Organized Vill. of Kake v. U.S. Dep’t of Agric., 795 F.3d 2 956, 969 (9th Cir. 2015) (en banc) (Kake). 3 BLM’s explanations for the Repeal violate the APA’s standards. 4 A. BLM’s Own Analysis Shows that the Repeal Will not Promote Oil and Gas 5 Development.

6 First, contrary to the conclusion reached by its own analysis, BLM arbitrarily asserted that 7 the Repeal would promote energy development. State Farm, 463 U.S. at 43. In announcing the 8 Repeal, BLM explained it as “part of President Trump’s goal to reduce the burden of federal 9 regulations that hinder economic growth and energy development.” HFRR_DEL_70217; 82 Fed. 10 Reg. at 61,925 (citing Executive Order No. 13,783 and Secretarial Order 3349 directives to promote 11 “Energy Independence” and eliminate regulations that “encumber energy production, constrain 12 economic growth, and prevent job creation”), 61,944 (agreeing with comments claiming that 2015 13 Rule hinders energy production). This rationale comported with the President’s order, but it 14 contradicted BLM’s own findings. 15 BLM prepared a regulatory impact analysis assessing the Repeal’s economic effects (the 16 RIA), which concluded that the Repeal will not, in fact, increase energy development. See RIA at 17 60 (HFRR_421-500) (admitting that “this final rule is unlikely to substantially alter the investment 18 decisions of firms and is unlikely to affect the supply, distribution, or use of energy”). BLM 19 determined that the Repeal is “not expected to impact the number of hydraulic fracturing operations” 20 on federal and tribal lands. 82 Fed. Reg. at 61,941. Pursuant to NEPA, the agency also prepared an 21 environmental assessment for the Repeal (the EA), which concluded that it would not “increase or 22 decrease the number of [fracturing] operations that occur in the future.” EA at 24 (HFRR_140–94). 23 BLM also explained why repealing the 2015 Rule will not promote energy development. A 24 modern hydraulically-fractured well typically costs $5.5 million to $7 million to drill and complete, 25 and the 2015 Rule’s compliance costs amount to only 0.1% to 0.2% of that expense. RIA at 4, 55 26 n.35. As BLM explained when reaching similar conclusions in 2015, “the additional cost [of 27 compliance] per hydraulic fracturing operation is insignificant when compared with the drilling costs 28 in recent years, the production gains from hydraulically fractured well operations, and the net

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 8 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 18 of 49

1 incomes of entities within the oil and natural gas industries.” 80 Fed. Reg. at 16,217. BLM also 2 concluded that the market price of crude oil—not federal regulation—was the only factor having “a 3 significant relationship” affecting the number of wells drilled on federal and tribal lands. RIA at 19. 4 BLM’s rationale of promoting energy development conflicts with the agency’s own analysis and is 5 therefore arbitrary and capricious. See California v. BLM, 286 F. Supp. 3d 1054, 1065–67 (N.D. 6 Cal. 2018) (California) (BLM violated APA in suspending regulation that allegedly “encumbers 7 energy production” where BLM’s own analysis reached contrary conclusion). 8 B. The 2015 Rule Is not Duplicative of State and Tribal Regulations. 9 BLM’s second explanation for the Repeal also “runs counter to the evidence before the 10 agency.” State Farm, 463 U.S. at 43. BLM asserted that the 2015 Rule is “duplicative” of existing 11 state and tribal regulatory programs and “therefore unnecessarily burdensome on regulated entities.” 12 82 Fed. Reg. at 61,939. According to BLM, “there are currently laws or regulations to address 13 hydraulic fracturing in all 32 of the states in which BLM currently manages oil and gas” 14 development, id., and thus any benefit from the 2015 Rule has been “eliminated by existing legal 15 frameworks” under state and tribal laws, RIA at 9 (emphasis added). 16 But regulations that “address hydraulic fracturing” are not all the same. BLM’s RIA 17 demonstrates that the patchwork of existing state regulations do not provide the same protections as 18 BLM’s rule. For example, the 2015 Rule’s limits on the use of waste pits, and requirement for prior 19 review and approval of fracturing operations (referred to as a sundry application), go well beyond 20 most state laws. See id. at 38–42, 51. The EPA made the same point in comments on the proposed 21 Repeal, noting that BLM’s claim “does not appear to be supported by the facts that BLM has 22 provided” in the RIA. HFRR_DEL_51551; HFRR_DEL_51554. BLM’s rationale is arbitrary and 23 capricious because it contradicts the agency’s own analysis. See Ctr. for Biological Diversity v. 24 Zinke, 900 F.3d 1053, 1068 (9th Cir. 2018) (agency’s finding was arbitrary and capricious where it 25 contradicted study by agency’s scientists that was cited elsewhere in same decision); California, 286 26 F. Supp. 3d at 1065–67 (BLM conclusions offered in support of suspending regulation were arbitrary 27 because they contradicted its factual findings). Substantial additional evidence in the record also 28 supports the RIA’s showing that state regulations are less protective than the 2015 Rule. See, e.g.,

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 9 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 19 of 49

1 HFRR_15712; HFRR_15968–69; HFRR_16493; HFRR_19080–82; HFRR_DEL_74485–88; 2 HFRR_DEL_74611–12; HFRR_DEL_74778. 3 The difference is even greater on Indian lands, where state laws do not apply. BLM’s RIA 4 acknowledges that only “some” tribes have oil and gas regulations at all, RIA at 3, much less 5 protections comparable to the 2015 Rule. BLM admits that “tribal regulations or enforcement 6 mechanisms . . . are not fully developed” in many areas. 82 Fed. Reg. at 61,939. BLM was more 7 direct in an earlier draft of the Repeal’s Preamble, stating that “BLM is aware that only a minority of 8 the oil and gas producing Indian tribes have regulatory programs to address hydraulic fracturing.” 9 HFRR_DEL_65761.8 By repealing the 2015 Rule, BLM leaves most tribes and their members 10 protected only by BLM’s outdated and inadequate 1980s-era regulations. 11 BLM recognized these differences when it adopted the 2015 Rule. BLM explained that 12 “state regulations range from not regulating [hydraulic fracturing] activity at all in some states to 13 fairly comprehensive regulation in other states.” 80 Fed. Reg. at 16,190. The agency concluded that 14 “not all of the states to which this final rule is applicable have the same requirements and, therefore, 15 this standard is necessary to protect Federal and tribal lands.” Id. at 16,161. BLM described the 16 2015 Rule as “establish[ing] baseline environmental safeguards for hydraulic fracturing operations 17 across all public and Indian lands.” Id. at 16,137; see also id. at 16,180 (explaining that BLM “has 18 the responsibility of ensuring for the public and tribes that specific minimum standards are adhered 19 to”). 20 In the Repeal, BLM claims that state regulation has substantially expanded since 2015 21 because the number of states with laws “addressing hydraulic fracturing” had increased from 20 to 22 32 states. 82 Fed. Reg. at 61,925.9 However, the states with new regulations account for a

23 8 Even for those tribes that do have regulations, the record shows that their laws are weaker than the 24 2015 Rule. See, e.g., HFRR_1721–23 (reviewing several tribal regulations addressing hydraulic 25 fracturing and concluding that none are as protective as the 2015 Rule); HFRR_15934–35 (explaining deficiencies in Fort Berthold regulations); HFRR_22296 (Southern Ute Tribe oil and gas 26 regulation uses a less protective standard for drinkable groundwater than the 2015 Rule). 9 The Repeal also states that “BLM has several pre-existing regulations that it will continue to rely 27 on” in addition to state and tribal regulations. 82 Fed. Reg. at 61,926. But in 2015, BLM dismissed 28 those same 1980s-era regulations as outdated because they were developed “long before the latest hydraulic fracturing technologies were developed or became widely used,” 80 Fed. Reg. at 16,131,

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 10 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 20 of 49

1 combined total of less than 1% of BLM-approved oil and gas development. RIA at 38. In contrast, 2 more than 99% of BLM-administered oil and gas development occurs in nine states—and all nine of 3 those states already had regulations “addressing hydraulic fracturing” in 2015. Id.; 2015 RIA at 51, 4 56. BLM’s RIA for the Repeal assessed those nine states in detail and confirmed that, just as in 5 2015, most of their regulations do not mandate the same protections as the 2015 Rule. Compare 6 RIA at 38–42 with 2015 RIA at 51–56. Because the states with new regulations account for less 7 than 1% of BLM-approved oil and gas operations, any laws there would not significantly affect the 8 amount of development affected by the 2015 Rule. 9 Moreover, the 2015 Rule adds significant protections for even the small number of BLM- 10 approved operations in the states with new regulations. For example, BLM’s RIA estimates that the 11 2015 Rule’s requirements to use tanks instead of pits would affect 100% of new BLM-approved 12 wells in Alabama, and 69.6% in Louisiana, meaning that those states allow fracturing waste to be 13 stored in open pits. RIA at 51; EA at 41. Further, the 2015 Rule requirement for pre-fracturing 14 approvals and post-fracturing disclosures would apply to all new wells in those states. RIA at 51. 15 BLM’s conclusion that an expansion of state regulations since 2015 has rendered the 2015 Rule 16 unnecessary is arbitrary and capricious. Ctr. for Biological Diversity, 900 F.3d at 1068; California, 17 286 F. Supp. 3d at 1065–67. 18 C. BLM Arbitrarily Ignored the 2015 Rule’s Benefits. 19 In analyzing the Repeal, BLM found that the 2015 Rule’s compliance costs were minimal, 20 averaging only 0.1% to 0.2% of the cost of drilling each new well. RIA at 4; see also 2015 RIA at 21 82 (similar finding in 2015). BLM acknowledged these minimal costs but asserted that “[a]ny 22 marginal benefits provided by the 2015 rule do not outweigh the rule’s costs, even if those costs are 23 a small percentage of the cost of a well.” 82 Fed. Reg. at 61,939. This claim is arbitrary and 24 capricious. State Farm, 463, U.S. at 43. 25 26 and “lack substantive provisions to assure” proper well construction, “proper management of 27 recovered fluids” in fracturing wastes, and to prevent other accidents at modern hydraulically- 28 fractured wells. 2015 EA at 4. In the Repeal, BLM did not assert that its prior conclusions about those regulations were mistaken, or that any new federal protections had been adopted since 2015.

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 11 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 21 of 49

1 1. BLM Ignored the Benefits that the 2015 Rule Provided Over State and Tribal Regulations. 2 3 First, BLM downplayed the 2015 Rule’s benefits by asserting that “[a]ny potential increase 4 in risk as a result of this [Repeal] would be partially or completely offset by state and other Federal 5 regulations that would still apply.” RIA at 56. As discussed above, the claim that state regulations 6 eliminate all the 2015 Rule’s benefits is contrary to the record. Supra pp. 9–11. BLM’s RIA 7 acknowledges that other regulations may only “partially” match the 2015 Rule’s requirements and 8 state regulations “may not provide a consistent level of assurance that the requirements in the 2015 9 final rule would have afforded.” RIA at 56. 10 Moreover, BLM was wrong in claiming that measures required under state law reduce the 11 benefits of the 2015 Rule below its costs. The agency’s compliance cost analysis already accounted 12 for other laws and industry practice: BLM assigned a cost to the 2015 Rule only where it required 13 action beyond what companies would already be doing. For example, the agency assumed zero 14 compliance costs for requirements like mechanical integrity testing and well pressure monitoring, 15 because it determined they were standard industry practice or required by most or all states. See id. 16 at 48. Conversely, BLM predicted that the 2015 Rule’s requirements to use tanks instead of pits to 17 store hydraulic fracturing wastes, and for cement evaluation logs to ensure adequate well 18 construction, would cost companies money because many states lack similar requirements. Id. at 19 46–49, 51. While the tanks and cementing requirements involve costs, they also yield benefits by 20 protecting groundwater and other resources beyond what is already required by other laws. See id. 21 at 46–49, 51, 55–56. Given its method of estimating compliance costs, BLM could not rationally 22 conclude that those benefits were already provided by other state and federal regulations. See 23 Hughes River Watershed Conservancy v. Glickman, 81 F.3d 437, 446–48 (4th Cir. 1996) (agencies 24 cannot rely on inaccurate economic assumptions). 25 In effect, BLM’s cost-benefit comparison addressed the 2015 Rule’s costs without 26 accounting for its benefits. This is classic arbitrary and capricious agency decision making. See 27 Michigan, 135 S. Ct. at 2707 (APA requires agencies to consider both advantages and disadvantages 28 of their decisions); Ctr. for Biological Diversity v. Nat’l Highway Traffic Safety Admin., 538 F.3d

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 12 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 22 of 49

1 1172, 1198–1203 (9th Cir. 2008) (CBD v. NHTSA) (holding agency’s failure to account for 2 environmental benefits arbitrary and capricious); California, 286 F. Supp. 3d at 1068–69 (explaining 3 that “BLM cannot have it both ways” by counting the costs, but not the benefits, of its earlier 4 regulation). 5 2. BLM Failed to Offer a Reasoned Explanation for Reversing Its Position 6 on the 2015 Rule’s Benefits.

7 BLM also concluded that the 2015 Rule was unnecessary because adverse impacts from 8 hydraulic fracturing operations are a “rarity.” See, e.g., 82 Fed. Reg. at 61,926, 61,931, 61,938; see 9 also id. at 61,932. This claim reversed the findings BLM made two years earlier, when it expressly 10 rejected industry comments making the same argument. See 80 Fed. Reg. at 16,180 (rejecting 11 comments claiming there was “no reason to promulgate the regulations because there was no 12 evidence that hydraulic fracturing operations have caused contamination of groundwater”). BLM’s 13 about-face in the Repeal was arbitrary and capricious. 14 When “show[ing] that there are good reasons for the new policy,” BLM owes the public a 15 more detailed explanation if the “new policy rests upon factual findings that contradict those which 16 underlay its prior policy.” FCC v. Fox, 556 U.S. at 515–16. In such cases, “unexplained conflicting 17 findings about the environmental impacts of a proposed agency action violate the APA.” Kake, 795 18 F.3d at 969. 19 BLM failed to make the showing required by FCC v. Fox. Its claim that oil-and-gas-related 20 accidents are a “rarity” conflicts with the record. Moreover, the Repeal disregards two central 21 benefits that BLM had identified just two years earlier and which led it to adopt the 2015 Rule: the 22 use of tanks instead of pits for storing hydraulic fracturing wastes, and the need for increased 23 oversight and information about hydraulic fracturing operations.

24 a. Accidents Are not a “Rarity.” 25 In 2015, BLM found that “[t]he need to assure that hydraulic fracturing fluids are isolated 26 from surface waters, usable groundwater, and other wells is clear. . . . [I]t is necessary to have 27 adequate requirements in place without further delay.” 80 Fed. Reg. at 16,180. BLM also 28 concluded that the “potential benefits of the [2015] rule are significant” and that the 2015 Rule

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 13 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 23 of 49

1 would “significantly reduce the risks associated with hydraulic fracturing operations on Federal and 2 Indian lands, particularly risks to surface waters and usable groundwater.” Id. at 16,203. 3 In reversing these findings, BLM stated that it had reviewed agency incident reports since 4 December 2014 and “did not find any increase in the number of incidents related to hydraulic 5 fracturing completions in BLM operations.” 82 Fed. Reg. at 61,932; see also id. at 61,926, 61,931, 6 61,938. This is misleading because regardless of whether oil and gas accidents are increasing, they 7 are anything but rare. BLM compiled a list of “major undesirable events” from October 2011 to 8 September 2016 that runs for 27 pages and includes approximately 1,000 accidents—nearly four 9 such reports each week over that five-year period. HFRR_78908–34. Other administrative record 10 documents further demonstrate the prevalence and frequency of accidents. One analysis found an 11 average of 23 spills each day in 2016 (8,519 total) in 14 oil and gas producing states, and hundreds 12 of spills contaminating water resources each year. HFRR_77398–99; see also HFRR_15648–49 13 (collecting examples of studies and reports). For example, BLM identified a 2015 accident in New 14 Mexico where a 160,000-gallon spill of hydraulic fracturing fluid could have been prevented had the 15 2015 Rule been in effect. HFRR_DEL_72682. Far from showing that adverse impacts are a 16 “rarity,” the record confirms BLM’s 2015 finding that updated regulations are needed.10

17 b. BLM Failed to Explain Its Reversal on the Benefits of Tanks. 18 BLM also ignored one of the major benefits that led it to adopt the 2015 Rule—requiring 19 companies to use tanks, instead of pits, to store hydraulic fracturing wastes. Supra p. 4. BLM 20

21 10 For example, the 2015 Rule updated BLM’s well construction standards. Supra p. 4. The record 22 shows that impacts from faulty well construction are widely recognized by the oil and gas industry. Hydraulic fracturing company Halliburton Energy Services identifies “casing failure and cementing 23 failure” as key risks, DOIAR90093–94, and several studies estimate well cementing failure rates ranging from 1% to 7%, see, e.g., DOIAR30072–73; DOIAR100588; DOIPS389262; see also 24 DOIAR12587 (explaining that 21% of major environmental violations on federal wells between 25 1998 and 2011 were the result of casing and cementing deficiencies). The record also contains numerous examples documenting such incidents. See, e.g., DOIAR29588–95 (groundwater 26 contamination examples linked to faulty well casing and cementing); DOIPS365417–18 (examples in Pennsylvania, Wyoming, Colorado, West Virginia, Ohio, and Texas); see also DOIAR8549–52; 27 DOIPS392568–70; DOIPS392573–75; DOIPS392582–83 (describing causes of surface and 28 groundwater contamination in Pennsylvania, Wyoming, and Colorado); DOIAR11755 (describing groundwater contamination in Wyoming linked to hydraulic fracturing); HFRR_83141–69 (same).

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 14 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 24 of 49

1 determined in 2015 that the costs of this requirement were warranted because it would benefit air 2 quality, water quality, and wildlife. See 80 Fed. Reg. at 16,162 (noting “that above-ground tanks, 3 when compared to pits, are less prone to leaking, are safer for wildlife, and will have less air 4 emissions”); see also id. at 16,163 (concluding that use of tanks “limits potential environmental 5 impacts . . . eliminates longer term environmental risk, reduces risks of spills or leaks, and increases 6 safety”), 16,203–04 (similar). 7 The Repeal offers no explanation for why the environmental benefits from using tanks 8 instead of pits are suddenly “marginal” or “questionable.” 82 Fed. Reg. at 61,925, 61,939. Just as in 9 2015, the administrative record is replete with examples where waste pits have caused groundwater 10 contamination, harmed wildlife, and other damage.11 If anything, the Repeal’s RIA supports BLM’s 11 original finding: it admits that rescinding the tank requirement creates “the potential for incremental 12 environmental harm” and “could increase the potential risk to surface and groundwater resources 13 through spills and contamination.” RIA at 49, 55. In the preamble, BLM provides a cursory 14 statement that “rescinding the 2015 rule’s storage tank requirement may alleviate some on-the- 15 ground impacts, such as those associated with truck traffic to transport tanks to and from well sites.” 16

17 11 See, e,g., HFRR_10135–36 (describing study documenting livestock dying after drinking out of 18 waste pits); HFRR_15968 (comments citing studies about air pollution impacts of storing flowback fluids in pits rather than tanks); HFRR_DEL_68921 (EPA Hydraulic Fracturing study describing 19 120 examples of water supply contamination from unlined or inadequately constructed pits in Ohio and Texas, and noting other examples in New Mexico, Oklahoma, Pennsylvania, and Wyoming); 20 HFRR_DEL_75964 (describing leaking waste impoundment that contaminated drinking water); DOIPS392570–71 (listing examples of spills and contamination caused by pits storing flowback and 21 produced water); DOIPS392582 (same); DOIPS392584 (same); DOIAR29595–99 (same); 22 DOIPS64058 (Colorado resident fell ill after drinking water contaminated by chemicals leaching from a pit); DOIAR3425 (New Mexico official stating “[o]perators have not been maintaining 23 proper control of their waste and some of those . . . wastes have gotten into surface and ground water”); DOIAR90086 (Halliburton explaining that “effective management of flowback water” is 24 necessary to “protect against risks to human health or the environment”); DOIAR90093 (Halliburton 25 comments citing expert survey identifying “flowback of reservoir fluids” as a “priority environmental risk”); DOIAR12600 (numerous safety violations related to improper pit 26 construction); DOIAR12605 (same); DOIPS365513–14 (Eastern Shoshone Tribe commenting that pits contributed to groundwater contamination on their reservation); DOIPS10185–86 (discussing 27 peer-reviewed literature explaining how birds are killed from drinking out of pits); DOIAR27937–38 28 (discussing avian mortality caused by pits); DOIAR27843 (describing air pollution from pits); DOIAR27857 (same); DOIAR97144 (describing risks pits pose to air, water, and wildlife).

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 15 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 25 of 49

1 82 Fed. Reg. at 61,939–40; see also RIA at 49 (similar). BLM, however, had considered truck 2 traffic in its 2015 analysis, and still found that tanks provided substantial environmental benefits. 3 See 80 Fed. Reg. at 16,162–63 (noting commenters had raised issue of “increased truck traffic,” and 4 that most tanks are mounted on trucks or trailers); 2015 EA at 44. 5 BLM’s reversal of its earlier finding about the benefits of tanks was arbitrary and capricious. 6 “An agency cannot simply disregard contrary or inconvenient factual determinations . . . any more 7 than it can ignore inconvenient facts when it writes on a blank slate.” FCC v. Fox, 556 U.S. at 537; 8 see also Friends of Alaska Nat’l Wildlife Refuges v. Bernhardt, -- F. Supp. 3d --, No. 3:18-cv- 9 00029-SLG, 2019 WL 1437596, *8–10 (D. Alaska Mar. 29, 2019) (Interior Department reversal of 10 prior decision not to build road through national wildlife refuge was arbitrary and capricious because 11 it did not address prior finding that the road would cause significant ecological damage). 12 c. BLM Ignored the Benefit of Increased Oversight and Information. 13 In reversing its findings about the need for the 2015 Rule, BLM disregarded another key 14 benefit: the additional oversight and information it required about well construction and hydraulic 15 fracturing operations. Rather than explain this change in position, BLM ignores its prior findings on 16 the issue. FCC v. Fox, 556 U.S. at 515–16. 17 When BLM adopted the 2015 Rule, it explained that under its 1980s-era rules, “the 18 information that the BLM currently requires . . . is inadequate and does not reflect the complex 19 nature of the [hydraulic fracturing] operations.” 80 Fed. Reg. at 16,194. The agency determined 20 that its old regulations “result[] in incomplete information being provided to the BLM. That lack of 21 information restricts the BLM’s ability as the resource manager to make informed resource decisions 22 . . . . [Additional] knowledge of the hydraulic fracturing operations will help the BLM better manage 23 and protect public and tribal resources.” Id. at 16,194–95; see also id. at 16,128 (concluding that the 24 “increased complexity [of modern hydraulically-fractured wells] requires additional regulatory effort 25 and oversight”); 2015 RIA at 9 (BLM determining that information collected under its prior 26 regulations was inadequate for oversight of more complex modern operations).12 A 2016 EPA study

27 12 28 Without the 2015 Rule, for example, BLM does not even know how many federally-approved wells are being hydraulically fractured. See 80 Fed. Reg. at 16,195 (providing only an estimate of

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 16 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 26 of 49

1 reached similar conclusions. HFRR_21129 (describing “data gaps” related to threats that are 2 addressed by 2015 Rule); HFRR_15650–51 (same). 3 While the 2015 Rule’s informational requirements involved minimal costs for companies, see 4 RIA at 51 (per-unit costs for “sundry” notices providing various information), the record 5 demonstrates that they provide very real benefits. For example, the 2015 Rule required BLM to 6 review and approve fracturing operations in advance. BLM described this provision as “necessary,” 7 and an “essential part of this rule,” because the information in the fracturing application “allows the 8 BLM to evaluate the proposal,” and ensure there are no pathways that would allow gas or fluids to 9 escape the area being fractured and contaminate aquifers or cause other accidents. 80 Fed. Reg. at 10 16,147, 16,153. In particular, BLM review aimed to avoid accidents such as “frack hits,”13 which 11 are a growing problem. Id. at 16,181–82, 16,189, 16,193–94; see also HFRR_DEL_65328 (2015 12 BLM memo noting that a single company in New Mexico reported 36 frack hits on its new wells). 13 Advance review also allows BLM to ensure that an adequate layer of rock lies between the 14 subsurface zone being fractured and drinking water aquifers. Where that separation is missing, 15 major groundwater contamination events have occurred. See HFRR_15647–48 (describing major 16 fracturing-related contamination in Pavillion, Wyoming, and evidence of similar risks in California). 17 The 2015 Rule also required companies to notify BLM about inadequate cementing of wells, 18 and obtain BLM approval for remedial action on those wells. BLM explained these steps “will help 19 to ensure protection of aquifers.” 80 Fed. Reg. at 16,156. In addition, the 2015 Rule’s requirement 20 to disclose fracturing chemicals served to “inform the community of the chemicals involved [in 21 hydraulic fracturing], and to assist in clean-up of any spills.” Id. at 16,149; see also supra p. 5 22 (describing benefits of disclosure requirement). 23 24

25 number of hydraulically-fractured wells); 82 Fed. Reg. at 61,936. Nor does BLM know how many 26 federally-approved wells have cementing problems. See RIA at 46–47 n.31 (relying on third-party estimates to evaluate frequency of inadequate cementing). 13 27 A “frack hit” (or “inter-well communication”) is an accident that occurs when hydraulic fracturing from one well intersects with the underground wellbore of a different well, potentially causing a 28 blowout of fracturing fluids at the other well. See 80 Fed. Reg. at 16,153, 16,181–82, 16,194; DOIAR67708 at spreadsheet line 74; DOIAR76381–83; DOIAR95539–40; DOIAR102823.

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 17 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 27 of 49

1 The Repeal does not address BLM’s prior findings about the 2015 Rule’s significant 2 informational benefits. The agency’s only response is that it has “broad authority to collect 3 [additional] information” under its existing regulations. 82 Fed. Reg. at 61,935. BLM, however, 4 does not claim that it will seek such additional information on a regular basis or that any such efforts 5 would address the needs BLM identified in 2015. See id.; see also RIA at 55–56 (mentioning 6 “public awareness” of fracturing as a benefit of the 2015 Rule but not improved BLM oversight). 7 In short, BLM accepted claims that there was no need for the 2015 Rule, despite having 8 rejected those same claims two years earlier. This reversal was arbitrary and capricious because 9 BLM failed to offer a reasoned explanation for “why the industry concerns it previously rejected . . . 10 now justified returning to its pre-[2015] Rule regulatory framework.” Cal. ex rel. Becerra v. U.S. 11 Dep’t of the Interior, -- F. Supp. 3d --, No. 4:17-cv-5948-SBA, 2019 WL 2223804, at *8, *19 (N.D. 12 Cal. Mar. 29, 2019) (vacating repeal of Interior Department regulation governing royalties for oil, 13 gas and coal developed on public lands); see also Kake, 795 F.3d at 968–69 (where Forest Service 14 had previously found that regulation avoided “loss of important roadless area values,” agency acted 15 arbitrarily and capriciously by repealing rule on grounds that it was “unnecessary to maintain the 16 roadless values” and that roadless areas were “sufficiently protected” under other laws). 17 II. THE REPEAL DISREGARDS BLM’s STATUTORY DUTIES AND IS CONTRARY 18 TO LAW.

19 BLM adopted the 2015 Rule because it concluded that the regulatory changes were necessary 20 to fulfill its legal responsibilities under FLPMA, the MLA, and the IMLA. Those laws charge BLM 21 with managing and protecting federally-owned lands, and acting as trustee for Indian lands. BLM 22 determined that neither its 30-year-old regulations, nor a patchwork of state and tribal laws, could 23 substitute for adequate federal rules. 24 When BLM reversed course in 2017, it failed to reconcile the Repeal with its earlier 25 conclusion that the 2015 Rule was necessary to meet the agency’s statutory obligations for 26 protecting federal and tribal lands. This approach was arbitrary and capricious under the FCC v. Fox 27 standard. Moreover, the Repeal violates FLPMA, the MLA, and the IMLA by unlawfully delegating 28 BLM’s duties under those statutes to states and tribes.

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 18 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 28 of 49

1 A. BLM Adopted the 2015 Rule to Carry Out Its Statutory Obligations. 2 The 2015 Rule discharged several of BLM’s statutory obligations. First, FLPMA directs 3 BLM to manage federal public lands for multiple uses “in a manner that will protect the quality of . . 4 . ecological, environmental, air and atmospheric, water resource,” and other values. 43 U.S.C. 5 §§ 1701(a)(8), 1702(c). FLPMA mandates that BLM “shall, by regulation or otherwise, take any 6 action necessary to prevent unnecessary or undue degradation of the [public] lands.” Id. § 1732(b). 7 To implement these requirements, FLPMA requires BLM “to establish comprehensive rules and 8 regulations” for managing federal lands, including regulations to prevent unnecessary and undue 9 degradation, and standards implementing FLPMA’s multiple-use mandate to balance mineral 10 development with environmental protection. Id. §§ 1701(a)(5), 1732, 1733, 1740; see also Nev. 11 Power Co. v. Watt, 711 F.2d 913, 917 n.2 (10th Cir. 1983) (describing BLM’s authority over public 12 lands under FLPMA as “comprehensive”); Topaz Beryllium Co. v. United States, 649 F.2d 775, 777 13 (10th Cir. 1981) (similar). 14 Second, the MLA’s purpose is “conservation through control” of federally-owned minerals 15 by the federal government. Boesche v. Udall, 373 U.S. 472, 481 (1963). In adopting the MLA, 16 Congress authorized BLM to impose “exacting restrictions and continuing supervision” over oil and 17 gas development on public lands, and to issue “rules and regulations governing in minute detail all 18 facets of the working of the land.” Id. at 477–78; see also Indep. Petroleum Ass’n of Am. v. DeWitt, 19 279 F.3d 1036, 1039 (D.C. Cir. 2002) (describing BLM’s “sweeping authority” under the MLA); W. 20 Energy All. v. Salazar, 709 F.3d 1040, 1042 (10th Cir. 2013). Under the MLA, Congress also 21 charged BLM with ensuring that companies conduct drilling operations with “reasonable diligence, 22 skill, and care,” and instructed BLM to protect the “interests of the United States” and “the public 23 welfare.” 30 U.S.C. § 187. It authorized BLM to “prescribe necessary and proper rules and 24 regulations and to do any and all things necessary to carry out and accomplish the purposes” of the 25 MLA. Id. § 189. The MLA also directs that BLM “shall regulate all surface-disturbing activities 26 conducted pursuant to any lease issued under this chapter, and shall determine reclamation and other 27 actions as required in the interest of conservation of surface resources.” Id. § 226(g). 28

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 19 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 29 of 49

1 Third, the Interior Department administers Indian minerals pursuant to the IMLA, which 2 provides that “[a]ll operations under any oil, gas, or other mineral lease” issued pursuant to the 3 IMLA or other related statutes “shall be subject to the rules and regulations promulgated by the 4 Secretary of the Interior.” 25 U.S.C. § 396d. The IMLA “is a detailed and comprehensive act that 5 imposes extensive responsibilities on the government in tribal mineral leasing matters for the benefit 6 of Indians.” Assiniboine & Sioux Tribes of Fort Peck Indian Reservation v. Bd. of Oil & Gas 7 Conservation of Mont., 792 F.2d 782, 794 (9th Cir. 1986) (Assiniboine). The Interior Department’s 8 “congressionally-imposed duties, and the long-standing, general trust relationship between the 9 government and the Indians” creates a “fiduciary relationship . . . in the management of tribal 10 mineral resources.” Id.; see also Woods Petroleum Corp. v. Dep’t of the Interior, 47 F.3d 1032, 11 1038 (10th Cir. 1995) (en banc) (“The power to manage and regulate Indian mineral interests carries 12 with it the duty to act as a trustee for the benefit of the Indian landowners.”). The Interior 13 Department has delegated its IMLA authority to administer drilling approvals for Indian minerals to 14 BLM. 25 C.F.R. § 211.4. 15 B. BLM Failed to Provide a Reasoned Explanation for Reversing Its Earlier 16 Conclusion that It Had a Legal Obligation to Promulgate the 2015 Rule.

17 In 2015, BLM concluded that the 2015 Rule was necessary to meet its obligations under the 18 MLA, FLPMA, and other laws, and that leaving hydraulic fracturing regulations up to states and 19 tribes would violate the agency’s statutory duties. In 2017, BLM reached the opposite conclusion 20 without explaining, or even acknowledging, its change in position. This unexplained reversal 21 violates the APA. 22 When an agency changes position, the APA requires it to (a) “display awareness that it is 23 changing position;” (b) show that the new policy is permissible under governing statutes; (c) explain 24 why the agency believes the new policy is better than the old one; and (d) “show that there are good 25 reasons for the new policy.” FCC v. Fox, 556 U.S. at 515–16. An “unexplained inconsistency in 26 agency policy is a reason for holding [its legal] interpretation to be an arbitrary and capricious 27 change from agency practice.” Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2126 (2016) 28 (quotations and alterations omitted); see also California v. Azar, 911 F.3d 558, 577 (9th Cir. 2018)

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 20 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 30 of 49

1 (rejecting agency’s “unexplained about-face” on legal issue related to Affordable Care Act 2 regulations). 3 In adopting the 2015 Rule, BLM “determined that the collections of information in the [2015 4 Rule] are necessary to enable the BLM to meet its statutory obligations to regulate operations 5 associated with Federal and Indian oil and gas leases [under MLA and IMLA]; prevent unnecessary 6 or undue degradation [under FLPMA]; and manage public lands using the principles of multiple use 7 and sustained yield [under FLPMA]; and protect resources associated with Indian lands [pursuant to 8 IMLA and the trust obligation].” 80 Fed. Reg. at 16,154. BLM also stated that it was promulgating 9 the 2015 Rule “consistent with its trust responsibilities on tribal lands and with its obligations under 10 [FLPMA]” because its “current regulations . . . lack substantive provisions to assure that wellbores 11 will be able to withstand the high pressures” associated with hydraulic fracturing, “assure proper 12 management of recovered fluids,” and prevent other accidents. 2015 EA at 4–5. BLM found that “it 13 is necessary to have adequate requirements in place without further delay.” 80 Fed. Reg. at 16,180. 14 In 2015, BLM rejected calls to leave hydraulic fracturing regulation to states and tribes 15 because doing so would violate FLPMA and other laws. The agency noted that “none of the BLM’s 16 statutory authorities authorize delegation of the BLM’s regulatory duties to state or tribal agencies,” 17 80 Fed. Reg. at 16,176, and that “[t]he BLM’s regulations are necessary because the BLM is unable 18 to delegate its responsibilities to the states and tribes,” id. at 16,190. It explained that “a major 19 impetus for a separate BLM rule is that states are not legally required to meet the stewardship 20 standards that apply to public lands and do not have trust responsibilities for Indian lands under 21 Federal laws.” Id. at 16,133. Because state regulations vary widely, BLM determined that it “needs 22 a baseline set of standards” that “meet the agency’s unique responsibilities under the FLPMA, the 23 Indian mineral leasing acts, and other statutes to administer oil and gas operations in a manner that 24 protects Federal and Indian lands.” Id. at 16,190. 25 Two years later, BLM disregarded these legal obligations in the Repeal. The agency 26 reversed course and chose to defer to state regulation, relying on “states and tribes taking the lead for 27 regulating most hydraulic fracturing activities.” 82 Fed. Reg. at 61,945. BLM asserted that state 28 and tribal laws “provide a better framework than the 2015 rule for mitigating the impacts of

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 21 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 31 of 49

1 associated with hydraulic fracturing operations.” Id. at 61,939; but see supra pp. 9–11. BLM, 2 however, never reconciled this approach with its earlier legal conclusion that doing so would be 3 contrary to law. See 82 Fed. Reg. at 61,935 (asserting “[w]ith respect to legal duties, no statute 4 requires the BLM to regulate hydraulic fracturing” or to subject all federal wells to “the same 5 regulations,” but not mentioning its 2015 conclusion). Nor did BLM claim that existing state and 6 tribal regulations satisfy FLPMA, the MLA, the IMLA, or BLM’s trust responsibilities. 7 The Repeal fails all four of the FCC v. Fox requirements. BLM totally ignored its earlier 8 legal conclusions, and thus did not “display awareness” that it was changing position on this legal 9 issue. FCC v. Fox, 556 U.S. at 515. Nor did BLM show that its new approach is permissible under 10 FLPMA, the MLA and the IMLA. Id.. BLM also did not explain why its new interpretation is 11 better. Id. And BLM failed to supply “good reasons” for its new approach. Id. at 515–16. 12 The recent decision in Friends of Alaska National Wildlife Refuges is instructive. In 2013, 13 the Interior Department rejected a land exchange that would allow construction of a road through a 14 national wildlife refuge. The agency found that “such a road would not be in the public interest,” 15 which was the legal standard under the governing land management statute. Friends of Alaska Nat’l 16 Wildlife Refuges, 2019 WL 1437596, at *2, *8. In 2018, the agency reversed course and agreed to 17 the land exchange without “address[ing] or acknowledg[ing]” its prior contrary determination. Id. at 18 *8. The court set aside the land exchange as arbitrary and capricious because the Interior 19 Department had not acknowledged its change in position, and discarded its prior findings “without a 20 reasoned explanation.” Id.; see also Or. Nat. Desert Ass’n v. Rose, 921 F.3d 1185, 1189–90 (9th 21 Cir. 2019) (BLM’s unexplained re-interpretation of “roads and trails” under Steens Act was arbitrary 22 and capricious). 23 The same is true for the Repeal. BLM violated the APA by failing to acknowledge or 24 explain its change in position about whether relying on state and tribal regulations would meet the 25 agency’s obligations under the MLA, FLPMA, and other statutes.14 26

27 14 BLM also mentions in passing that the Repeal “eliminates the need for further litigation about 28 BLM’s statutory authority.” 82 Fed. Reg. at 61,925. But avoiding litigation is not a valid rationale for the Repeal. This Court recognized in a similar case that “if we are to indulge the spin that the

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 22 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 32 of 49

1 C. The Repeal Unlawfully Delegates BLM’s Duties Under FLPMA, the MLA, and the IMLA. 2 3 The Repeal violated not only the APA, but also BLM’s substantive legal obligations as a 4 federal land manager and trustee for Indian lands. As BLM recognized in 2015, FLPMA, the MLA, 5 and the IMLA do not allow the agency to delegate its regulatory oversight to the states. See supra 6 pp. 20–22; 80 Fed. Reg. at 16,176 (“none of the BLM’s statutory authorities authorized delegation of 7 the BLM’s regulatory duties to state or tribal agencies”); id. at 16,178–79 (“BLM is not allowed to 8 delegate its responsibilities to the states”); id. at 16,190 (similar); 2015 EA at 19 (similar); 78 Fed. 9 Reg. 31,636, 31,640 (May 24, 2013) (proposed 2015 Rule reaching same conclusion for IMLA). 10 An agency delegates its authority when it allows another party to determine statutory 11 compliance, or by abdicating its final reviewing authority. Fund for Animals v. Kempthorne, 538 12 F.3d 124, 133 (2d Cir. 2008). “[S]ubdelegations to outside parties are assumed to be improper 13 absent an affirmative showing of Congressional authorization.” G.H. Daniels III & Assocs., Inc. v. 14 Perez, 626 F. App’x 205, 212 (10th Cir. 2015) (quotation omitted). “[W]hen an agency delegates 15 power to outside parties, lines of accountability may blur, undermining an important democratic 16 check on government decision-making.” U.S. Telecom Ass’n v. Fed. Commc’ns Comm’n, 359 F.3d 17 554, 565 (D.C. Cir. 2004). “The fact that the subdelegation . . . is to state [governments] rather than 18 private organizations does not alter the analysis.” Id. at 566. Courts will not “read broad authority 19 to subdelegate into [mineral leasing] statutes, absent clear proof of legislative intent to relieve the 20 Secretary of a portion of his duties.” Assiniboine, 792 F.2d at 796. 21 22 decision to end [the Deferred Action on Childhood Arrivals program (DACA)] rested on a litigation- 23 management assessment . . . then the [agency] committed a serious error.” Regents of Univ. of Cal. v. Dep’t of Homeland Sec., 279 F. Supp. 3d 1011, 1044 (N.D. Cal. 2018). Given BLM’s earlier 24 finding that the 2015 Rule was necessary to meet its statutory obligations, abandoning the 2015 25 Rule—even as a litigation decision—would be contrary to FLPMA and other statutes. See United States v. Carpenter, 526 F.3d 1237, 1242 (9th Cir. 2008) (government’s discretion to settle litigation 26 “does not include license to agree to settlement terms that would violate the civil laws governing the agency” (quoting Exec. Bus. Media, Inc. v. U.S. Dep’t of Def., 3 F.3d 759, 762 (4th Cir. 1993))). 27 BLM also had an obligation to balance any litigation risk against “competing policy considerations,” 28 i.e., the 2015 Rule’s foregone benefits. Regents, 279 F. Supp. 3d at 1044. There is no evidence in the record that BLM did so.

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 23 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 33 of 49

1 BLM cannot defer to states and tribes in the hope that their regulations will satisfy FLPMA, 2 the MLA and the IMLA. As BLM observed in 2015, “a major impetus for a separate BLM rule is 3 that states are not legally required to meet the stewardship standards that apply to public lands and 4 do not have trust responsibilities for Indian lands under Federal laws.” 80 Fed. Reg. at 16,133. 5 Moreover, “state rules may not apply to tribal lands,” id. at 16,176, and many or most tribes lack 6 comparable regulatory programs of their own, supra p. 10. 7 Deferring to state and tribal regulation also leaves BLM and the public exposed to the risk 8 that states may revise or rescind their own regulations, thus falling even further below the baseline 9 required by federal statutes. For example, BLM notes that most states have adopted rules requiring 10 disclosure of hydraulic fracturing chemicals, EA at 37, but nothing would prevent a state from 11 eliminating or narrowing the required disclosures in the future. 12 Nor can BLM control how states and tribes interpret and enforce their own rules. States or 13 tribes may choose to waive their regulatory requirements on waste pits, cementing and other well 14 construction standards. For example, relying on state chemical disclosure regulations puts BLM at 15 the mercy of state decisions about what information companies must provide. But “[n]o federal 16 statute allows the BLM to defer to decisions of states or tribes about what information . . . the BLM 17 would allow operators to withhold from the public.” 80 Fed. Reg. at 16,172. 18 Another problem with relying on state or tribal regulation is “[t]he information that states, 19 tribes, or other Federal agencies collect is neither uniform nor uniformly accessible to the BLM.” Id. 20 at 16,154. As noted above, BLM determined that additional information is needed to satisfy its 21 statutory obligations as a land manager. Supra pp. 16–18. Under state regulations, however, BLM 22 will not receive relevant reports from companies about pressure testing, problems with cementing 23 operations, or the risk of frack hits. Moreover, BLM will receive even less information on Indian 24 lands where the tribes lack their own oil and gas regulations. See supra p. 10. 25 More than 30 years ago, the Ninth Circuit addressed a similar BLM effort to unlawfully 26 delegate its mineral development authority. In Assiniboine, BLM signed a cooperative agreement 27 with Montana providing that mineral developers seeking permits to develop tribal lands would apply 28 for permits with the state, rather than BLM. 792 F.2d at 786. While BLM, not Montana, had

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 24 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 34 of 49

1 jurisdiction over tribal mineral development, the plaintiffs alleged that under the applicable 2 agreement, Montana would process permit applications, subject to “rubber stamp” by BLM. Id. at 3 793–94. 4 The Ninth Circuit held that plaintiffs had stated a claim for unlawful delegation of BLM’s 5 authority under the IMLA. Id. at 794–95. The court pointed out that the state had “no independent 6 jurisdiction” over tribal lands. Id. at 795. There was no “express congressional authorization for a 7 subdelegation” under the IMLA, and no evidence of clear Congressional intent to allow the 8 Secretary to delegate his “comprehensive responsibilities” over mineral leasing. Id. at 795–96. The 9 Repeal, which relies on states to satisfy BLM’s statutory obligations to set standards for mineral 10 development, violates the law for the same reasons. Id.; see also U.S. Telecom, 359 F.3d at 565–66.

11 III. THE REPEAL VIOLATES THE ENDANGERED SPECIES ACT. 12 The ESA requires BLM to consult with the Fish and Wildlife Service (FWS) when it takes 13 any action, including promulgating a regulation, that may affect a species listed as threatened or 14 endangered under the ESA, or habitat designated as critical for that species by FWS. The Repeal 15 may adversely affect ESA-listed species by eliminating a variety of protections for wildlife, 16 including requiring tanks rather than pits for wastewater storage, and other measures to protect 17 surface water and groundwater. BLM thus violated the ESA by failing to consult with FWS. 18 A. BLM Must Consult FWS Before Taking Actions that May Affect ESA-Listed 19 Species.

20 Congress enacted the ESA to protect endangered and threatened species and the ecosystems 21 on which those species depend. 16 U.S.C. § 1531(b). The ESA provides that, “[e]ach federal 22 agency shall . . . insure that any action authorized, funded, or carried out by such agency . . . is not 23 likely to jeopardize the continued existence of any endangered species or threatened species or result 24 in the destruction or adverse modification of [critical] habitat of such species.” Id. § 1536(a)(2); see 25 also 50 C.F.R. § 402.14(a). The obligation to “insure” against a likelihood of jeopardy or adverse 26 modification requires the agencies to give the benefit of the doubt to endangered species and to place 27 the burden of risk and uncertainty on the agency proposing the action. See Sierra Club v. Marsh, 28 816 F.2d 1376, 1386 (9th Cir. 1987).

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 25 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 35 of 49

1 To implement this duty, Section 7 of the ESA requires agencies to consult with FWS when 2 they take an “action” that “may affect” a listed species. 50 C.F.R. § 402.14(a); see also 16 U.S.C. 3 § 1536(a)(4). Interior Department regulations broadly define the scope of agency actions subject to 4 consultation. See 50 C.F.R. § 402.02 (defining action); Conner v. Burford, 848 F.2d 1441, 1453 (9th 5 Cir. 1988) (courts construe “action” broadly). “Examples [of actions] include, but are not limited to 6 . . . (b) the promulgation of regulations.” 50 C.F.R. § 402.02; accord Forest Guardians v. Forsgren, 7 478 F.3d 1149, 1159 (10th Cir. 2007) (emphasizing that “the very definition of ‘action’ in § 402.02 8 tells us that ‘promulgation of regulations’ . . . constitutes ‘action’”). “The minimum threshold for an 9 agency action to trigger consultation with FWS is low.” Kraayenbrink, 632 F.3d at 496. “[A]ctions 10 that have any chance of affecting listed species or critical habitat—even if it is later determined that 11 the actions are ‘not likely’ to do so—require at least some consultation under the ESA.” Karuk 12 Tribe v. U.S. Forest Serv., 681 F.3d 1006, 1027 (9th Cir. 2012) (en banc). 13 “Actions” that courts have recognized “may affect” listed species include the issuance of a 14 new, nationally-applicable regulation that is less protective than an earlier version of the regulation 15 that “would impose greater protections.” Cal. ex rel. Lockyer v. U.S. Dep’t of Agric., 575 F.3d 999, 16 1019 (9th Cir. 2009) (Lockyer II); see also Citizens for Better Forestry v. U.S. Dep’t of Agric., 481 17 F. Supp. 2d 1059, 1097 (N.D. Cal. 2007) (Citizens for Better Forestry I) (“[P]rogrammatic rules . . . 18 are covered by ESA’s procedural requirements.”). Indeed, when BLM revised its nationally- 19 applicable grazing regulations, the Ninth Circuit held that “[t]he sheer number of acres affected by 20 the 2006 Regulations and number of special status species who reside on those lands alone suggest 21 that the proposed amendments ‘may affect’ a listed species or its critical habitat.” Kraayenbrink, 22 632 F.3d at 496. 23 The agency taking action initiates consultation by preparing a “biological assessment” 24 identifying ESA-listed species and potential impacts on them. 50 C.F.R. § 402.12. If the agency 25 determines its action is not likely to adversely affect listed species or their critical habitat, it may 26 undergo “informal consultation,” and seek written concurrence from FWS agreeing with this 27 conclusion. Id. §§ 402.13, 402.14(b)(1). If the action agency’s biological assessment finds a 28

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 26 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 36 of 49

1 likelihood of adverse effects, it must undertake a more formal consultation process with FWS. Id. 2 § 402.14.

3 B. BLM Violated the ESA by Failing to Consult FWS About the Repeal. 4 The Repeal eliminates several requirements designed to protect wildlife, which may 5 adversely affect numerous ESA-listed species and their designated critical habitat. See ECF No. 6 55.1 at 4–13. Yet BLM failed to consult FWS about the Repeal. 82 Fed. Reg. at 61,941 7 (acknowledging that BLM did not consult FWS); accord ECF No. 71 ¶ 97 (BLM Answer to 8 Amended Complaint). 9 1. The Repeal May Adversely Affect ESA-Listed Species. 10 Substantial evidence shows that the Repeal may affect ESA-listed species and their critical 11 habitat, and that BLM was therefore required to consult FWS. ESA-listed species whose habitat 12 overlaps with areas subject to BLM-approved oil and gas development include the California 13 condor, Gunnison sage-grouse, four endangered Colorado River Basin fish (Colorado pikeminnow, 14 razorback sucker, humpback chub, and bonytail (collectively, Colorado River Fish)), California red- 15 legged frog, Mexican spotted owl, Piping plover, Whooping crane, American burying beetle, Uinta 16 Basin hookless cactus, Parachute beardtongue, and Heliotrope milkvetch, among others. ECF No. 17 55.1 at 6–8, 10–13; see also Decl. of Joel Minor at Exs. 4, 6, 10–11, 13–14 (May 30, 2019) (attached 18 as Exhibit B). The administrative record includes several BLM analyses of oil and gas projects in 19 Utah and Wyoming that document the potential adverse impacts of that development on these and 20 many other ESA-listed species. See, e.g., HFRR_27443–44 (Black-footed ferret, Ute ladies’-tresses, 21 and endangered Colorado River Fish); HFRR_28970–75 (Clay reed-mustard, Shrubby reed-mustard, 22 Pariette cactus, Uinta Basin hookless cactus, Graham’s beardtongue, Ute ladies’-tresses, Mexican 23 spotted owl, Western yellow-billed cuckoo, and Colorado River Fish); HFRR_31050 (Colorado 24 River Fish); HFRR_33001–06 (Mexican spotted owl, Southwestern willow flycatcher, Western 25 yellow-billed cuckoo, Colorado River Fish, and Uinta Basin hookless cactus); HFRR_33966–68 26 (Colorado River Fish, Black-footed ferret, Ute ladies’-tresses, and Canada lynx). Another analysis 27 by a state agency concluded that impacts from hydraulic fracturing could not be avoided for some 28 ESA-listed species “due to their inherent poor mobility.” HFRR_23743.

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 27 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 37 of 49

1 BLM staff recognized this point. For example, James Tichenor, one of the Repeal’s principal 2 authors, 82 Fed. Reg. at 61,948, searched an FWS database in November 2017 for ESA-listed 3 species in states with BLM-approved oil and gas operations, HFRR_2199. Based on the results, Mr. 4 Tichenor concluded: “Looks like we’ll need to do a biological assessment for this rule.” 5 HFRR_2202. Similarly, BLM admitted in a draft of its NEPA documentation that “because the 6 BLM won’t require verification, testing, and monitoring of hydraulic fracturing operations, or 7 require temporary storage of recovered fluids in above-ground tanks, it could increase the possibility 8 of adverse effects on listed species or designated critical habitats.” HFRR_DEL_63282. 9 Despite these admissions, BLM failed to consult with FWS about the Repeal. 82 Fed. Reg. 10 at 61,941; ECF No. 71 ¶ 97. This failure violated the ESA because the Repeal eliminated several 11 provisions of the 2015 Rule that protected listed species and their habitat. 12 a. Waste Storage Pits 13 By restoring BLM’s 1980s-era regulations, the Repeal allows operators to store hydraulic 14 fracturing wastewater in open pits, instead of the closed tanks required by the 2015 Rule. Those pits 15 pose risks to wildlife, which can drink the toxic fluids in the pits, or (for avian species) land in them, 16 causing illness or death. See HFRR_23924 (“Mortality of avian species has been attributed to 17 contact with fluid contents in pits at oil and gas well sites.”). To avoid these harms, the 2015 Rule 18 required recovered fluids to “be stored in rigid enclosed, covered, or netted and screened above- 19 ground tanks.” 80 Fed. Reg. at 16,220. BLM observed in 2015 that “the storage of flowback, or 20 recovered fluid in pits, poses a risk of impacts to air, water, and wildlife. . . . BLM believes that 21 above-ground tanks, when compared to pits, are less prone to leaking, [and] are safer for wildlife.” 22 Id. at 16,162. BLM found that “[t]he use of storage tanks would largely eliminate the risk of 23 flowback fluids damaging various environmental resources . . . includ[ing] . . . wildlife (with netting 24 over open-topped tanks or use of enclosed tanks).” 2015 EA at 43.15 25 26 15 See also 80 Fed. Reg. at 16,162, 16,203–04 (requiring tanks to be covered, netted, or screened 27 “helps prevent accidental deaths of species protected under the Migratory Bird Treaty Act or other 28 laws”); HFRR_23924 (“[T]he requirement to use tanks would . . . more easily exclude wildlife than would pits.”); HFRR_28295 (similar).

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 28 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 38 of 49

1 Other agencies, including FWS, also have concluded that storing waste in tanks rather than 2 pits prevents bird deaths. ECF No. 55.1 at 5–6; Minor Decl. at Exs. 1–3. For example, FWS and 3 BLM have recognized that waste pits pose threats to two ESA-listed species: the Gunnison sage- 4 grouse and the California Condor. ECF No. 55.1 at 6–8.

5 b. Preventing Surface and Groundwater Pollution 6 The 2015 Rule also protected listed species and their habitats by requiring measures to 7 prevent surface and groundwater contamination. These included updated well construction 8 standards, prior BLM approval of fracturing operations, and the use of tanks instead of pits. See 9 supra pp. 4–5; 80 Fed. Reg. at 16,129, 16,152–54, 16,155, 16,160, 16,163, 16,180–82, 16,193–94, 10 16,203–04; HFRR_23894. Many scientists have independently catalogued the ways in which 11 ground and surface water pollution caused by hydraulic fracturing can pose risks to wildlife. ECF 12 No. 55.1 at 9–11 & n.19; Minor Decl. at Exs. 7–9. 13 Many ESA-listed species that coexist with BLM-authorized hydraulic fracturing rely on 14 clean surface and groundwater. These include, for example, the Colorado River Fish. ECF No. 55.1 15 at 10; Minor Decl. at Exs. 10–11. FWS and BLM have both acknowledged that spills and accidents 16 causing contamination of waters in the Upper Colorado River Basin can kill and otherwise harm the 17 listed fish and their aquatic habitat. ECF No. 55.1 at 10; Minor Decl. at Exs. 10–11. 18 c. Disclosure of Water Source and Volume 19 BLM recognized in 2015 that one environmental impact from hydraulic fracturing is “stress 20 on surface water and ground water supplies from the withdrawal of large volumes of water used in 21 drilling and hydraulic fracturing.” 2015 EA at 24. The water depletions associated with BLM- 22 approved hydraulic fracturing operations adversely impact listed species and their habitat. ECF No. 23 55.1 at 12. For example, water depletions harm Colorado River Fish by reducing their habitat and 24 concentrating water pollutants. Minor Decl. at Exs. 10, 13. 25 The 2015 Rule therefore required companies to submit information about the source of the 26 water they would use in fracturing. 80 Fed. Reg. at 16,218. BLM explained in 2015 that it required 27 this information “in order to conduct and document an environmental effects analysis that takes a 28 hard look at the impacts of its Federal action.” Id. at 16,152–53. By doing so, the 2015 Rule would

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 29 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 39 of 49

1 have allowed the agency to better evaluate and mitigate the impacts of those water withdrawals— 2 including the impacts to ESA-listed aquatic species such as the Colorado River Fish. See id. at 3 16,152. The Repeal eliminated this requirement. 4 2. BLM Violated the ESA by Failing to Consult with FWS. 5 BLM chose not to consult FWS about the proposed Repeal, despite its clear potential to 6 adversely affect ESA-listed species and their critical habitat. See BLM ECF No. 71 ¶ 97 (BLM’s 7 Answer to Amended Complaint, admitting that “BLM did not prepare a document titled ‘biological 8 assessment’ for the HF Recession [sic] Rule”). Given the numerous species that may be affected, 9 this failure violated the ESA. See HFRR_2202 (Mr. Tichenor concluding that “[l]ooks like we’ll 10 need to do a biological assessment for this rule”); cf. Kraayenbrink, 632 F.3d at 496 (holding that 11 BLM violated the ESA by failing to consult prior to adopting regulations, where the agency 12 identified numerous species with habitat that would be affected by the regulations). 13 BLM took the position that ESA consultation was not required because the Repeal is “not 14 expected to impact the number of hydraulic fracturing operations.” 82 Fed. Reg. at 61,941. But 15 regardless of the number of hydraulic fracturing operations, the Repeal changes the nature of those 16 operations by allowing operators to store their waste in pits rather than tanks, by eliminating 17 protections against ground and surface water contamination, and by eliminating informational 18 requirements designed to help BLM mitigate impacts on listed species. Supra pp. 28–29. For 19 example, the Repeal’s RIA indicates that it may result in hundreds of new waste pits on federal and 20 tribal lands each year. See RIA at 3, 49, 51 (explaining that there are up to 3,500 hydraulic 21 fracturing operations on Federal and Indian lands each year, and listing percentage of wells in each 22 state that would have been required to use tanks instead of pits under 2015 Rule). Moreover, the 23 RIA estimates that the Repeal will result in BLM allowing thousands of new wells to be completed 24 without the information required by the 2015 Rule. See id. at 3, 51 (showing that 100% of new 25 wells will not be subject to the 2015 Rule’s “Application (Sundry)” requirement). These changes 26 meet the “may affect” threshold for triggering ESA consultation. 50 C.F.R. § 402.14(a); Karuk 27 Tribe, 681 F.3d at 1027; Kraayenbrink, 632 F.3d at 496; Lockyer II, 575 F.3d at 1019; Citizens for 28 Better Forestry I, 481 F. Supp. 2d at 1095–97.

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 30 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 40 of 49

1 BLM also stated that its later decisions to approve drilling permits and other oil-and-gas- 2 related authorizations will be made “in compliance with . . . the ESA.” 82 Fed. Reg. at 61,941. But 3 BLM cannot defer its ESA compliance until later. The ESA requires BLM to “review its actions at 4 the earliest possible time to determine whether any action may affect listed species or critical 5 habitat.” 50 C.F.R. § 402.14(a). Indeed, “the Ninth Circuit rejected the very argument proffered by 6 [BLM] here—that an agency was not required to consult under ESA until a site-specific project or 7 activity takes place.” Citizens for Better Forestry I, 481 F. Supp. 2d at 1095 (discussing Pac. Rivers 8 Council v. Thomas, 30 F.3d 1050, 1055 (9th Cir. 1994) (holding that resource management plans 9 may affect listed species because they set forth criteria for resource development within the species’ 10 habitat)); see also Conner, 848 F.2d at 1455 (rejecting BLM argument that ESA consultation on 11 leasing can be deferred until individual drilling permits issue). 12 IV. THE REPEAL VIOLATES NEPA. 13 The Repeal eliminates protections for wildlife, surface water, and groundwater on thousands 14 of BLM-approved oil and gas wells each year on federal and tribal lands across the country. Rather 15 than taking a hard look at the environmental impacts of this step, BLM prepared only a brief 16 environmental assessment (EA), which is riddled with deficiencies. Further, BLM arbitrarily and 17 capriciously concluded that the Repeal’s environmental impacts were not “significant.” 18 A. BLM Failed to Take a Hard Look at the Repeal’s Impacts. 19 “NEPA ‘is our basic national charter for protection of the environment.’” Klamath-Siskiyou 20 Wildlands Ctr. v. BLM, 387 F.3d 989, 993 (9th Cir. 2004) (quoting 40 C.F.R. § 1500.1(a)). “The 21 purpose of NEPA is to require disclosure of relevant environmental considerations that were given a 22 ‘hard look’ by the agency.” Lands Council v. Powell, 395 F.3d 1019, 1027 (9th Cir. 2005). NEPA’s 23 hard look mandate ensures “that the agency, in reaching its decision, will have available, and will 24 carefully consider, detailed information concerning significant environmental impacts.” Robertson 25 v. Methow Valley Citizens Council, 490 U.S. 332, 349–50 (1989). This analysis also serves to 26 inform the public about the environmental impacts of proposed agency actions. Kern v. BLM, 284 27 F.3d 1062, 1066 (9th Cir. 2002). NEPA’s “hard look must be taken objectively and in good faith, 28

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 31 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 41 of 49

1 not as an exercise in form over substance, and not as a subterfuge designed to rationalize a decision 2 already made.” Kraayenbrink, 632 F.3d at 491 (quotation omitted). 3 BLM’s NEPA analysis for the Repeal falls well short of taking a hard look. Despite 4 eliminating nationwide standards that apply to as many as 3,500 new oil and gas wells each year, 5 RIA at 3, BLM’s EA devotes only 10 pages to analyzing the Repeal’s impacts, EA at 30–39. This 6 cursory analysis overlooks the impacts from eliminating the requirement to store fracturing wastes in 7 tanks, and ignores the disproportionate risks the Repeal imposes on Native American communities. 8 1. BLM Failed to Take a Hard Look at the Impacts of Storing Wastes in 9 Pits, Rather than Tanks.

10 The 2015 Rule required companies to store their hydraulic fracturing wastes in tanks to avoid 11 the significant harm that waste pits cause to groundwater, wildlife, and air quality. See supra pp. 12 14–16, 28–29; 80 Fed. Reg. at 16,162, 16,203–04, 16,163. But the EA for the Repeal almost entirely 13 ignores the very impacts from pits that the 2015 Rule sought to avoid. This violates NEPA’s 14 requirement to “provid[e] a reasonably thorough discussion of the significant aspects of the probable 15 environmental consequences” of a proposed action. CBD v. NHTSA, 538 F.3d at 1194. 16 The EA includes only a handful of passing references to the harms caused by waste pits. 17 See, e.g., EA at 18 (including “unlined pits” in list of oil and gas impacts identified by 2016 EPA 18 study), 29 (noting “air emissions” from pits, but downplaying those emissions), 31 (including “torn 19 pit liners” in listing various causes of spills), 32 (including “retaining pit spills” in list of different 20 types of spills). These cursory references fall well short of satisfying NEPA’s hard look mandate. A 21 “general statement[] about possible effects and some risk . . . . do[es] not constitute a hard look 22 absent a justification for why an agency could not supply more definitive information.” Rose, 921 23 F.3d at 1191 (quotations omitted); accord Blue Mountains Biodiversity Project v. Blackwood, 161 24 F.3d 1210, 1213 (9th Cir. 1988); Or. Nat. Res. Council Fund v. Brong, 492 F.3d 1123, 1134 (9th Cir. 25 2007). 26 Such generalized statements are particularly inadequate because the record amply documents 27 the risks caused by pits. Supra pp. 14–16. Instead of taking a hard look at how the Repeal will 28 increase those pit-related harms, the EA asserts that “many operators were already implementing this

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 32 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 42 of 49

1 practice” of using tanks. EA at 28–29; see also id. at 24–25. But the EA ignores that elsewhere in 2 the record, BLM showed that the Repeal (even accounting for such voluntary action and state 3 regulations) will allow numerous waste pits that the 2015 Rule would have forbidden. See RIA at 4 48–49, 51 (estimating applicability of tank requirement across different states). For example, 5 BLM’s analysis indicates that even if eliminating the tank requirement impacts only 10% of new 6 wells, see EA at 28–29, that would result in up to 350 new waste pits every year on public and tribal 7 lands, see RIA at 3 (estimating the Repeal affects up to 3,500 wells per year); but see 82 Fed. Reg. at 8 61,937 (commenter pointing out that BLM’s estimate likely undercounted number of pits by 9 assuming inaccurately high rates of voluntary tank use). By failing to use its own estimates to 10 analyze the impacts of those new pits, BLM violated NEPA. See, e.g., Diné Citizens Against 11 Ruining Our Env’t v. Bernhardt, 923 F.3d 831, 856–59 (10th Cir. 2019) (holding that BLM violated 12 NEPA by relying on general statements about impacts to water resources from hydraulic fracturing 13 while ignoring more specific record evidence); N.M. ex rel. Richardson v. BLM, 565 F.3d 683, 713– 14 15 (10th Cir. 2009) (holding that BLM violated NEPA by improperly minimizing likely groundwater 15 impacts from oil and gas development despite contrary record evidence). 16 The EA also focuses on the more limited adverse impacts associated with tanks, like the 17 potential for surface disturbance or additional truck traffic to transport the tanks. EA at 28, 39. As 18 discussed above, in 2015 BLM considered the impacts of tanks and still concluded that they 19 provided major environmental benefits over pits. See 2015 EA at 44; see also supra pp. 15–16. The 20 EA for the Repeal, however, never offers a similar comparison. For example, the EA states that 21 “[r]eleases are . . . possible from tanks,” EA at 31, without mentioning whether pits pose a greater 22 threat of such releases and resulting groundwater contamination, cf. 80 Fed. Reg. at 16,162 (2015 23 finding that leaks are less common from tanks, and that tanks are safer for wildlife, and have fewer 24 air emissions). The EA’s misleading one-sided discussion of tanks does not represent the hard look 25 required by NEPA. See Muckleshoot Indian Tribe v. U.S. Forest Serv., 177 F.3d 800, 811 (9th Cir. 26 1999) (“one-sided” agency analysis violated NEPA where it “focuse[d] solely on the beneficial 27 impact [of] the [land] exchange” and did not discuss impacts from timber harvesting that was likely 28 to result).

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 33 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 43 of 49

1 2. BLM Failed to Take a Hard Look at the Repeal’s Impacts on Tribal Lands. 2 3 The Repeal has major implications for the health of Native American communities and 4 pollution on tribal lands, because most tribes lack their own oil and gas regulations. See supra p. 10. 5 The EA, however, does not address the Repeal’s impact on tribal communities. Indeed, BLM’s 6 cursory environmental justice analysis ignores tribal lands altogether. 7 This omission violates NEPA’s requirement to “consider every significant aspect of the 8 environmental impact of a proposed action.” Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, 9 462 U.S. 87, 97 (1983). Namely, BLM disregarded the environmental justice impacts of the Repeal 10 on Native Americans. See Council on Envtl. Quality, Environmental Justice, Guidance Under the 11 National Environmental Policy Act 9 (1997), https://www.doi.gov/sites/doi.gov/files/uploads/EJ- 12 under-NEPA.pdf (NEPA analysis should identify tribes present in the area and “whether there may 13 be disproportionately high and adverse human health or environmental effects on” them); Standing 14 Rock Sioux Tribe v. U.S. Army Corps of Eng’rs, 255 F. Supp. 3d 101, 140 (D.D.C. 2017) (holding 15 agency’s environmental justice analysis violated NEPA’s hard look requirement where EA 16 contained nothing more than “bare-bones conclusion that Standing Rock [Sioux Tribe] would not be 17 disproportionately harmed”). 18 BLM was well aware that due to the lack of tribal oil and gas regulations, the Repeal would 19 affect Indian lands differently from federal lands.16 See HFRR_DEL_76008 (BLM indicating that 20

21 16 The record also illustrates the significant adverse impacts the Repeal will cause on tribal lands. 22 See, e.g., HFRR_3712–21 (peer-reviewed scientific article about brine spill from hydraulic fracturing operation on Fort Berthold Indian Reservation); HFRR_15935 (describing spills at Fort 23 Berthold); HFRR_16420 (same); HFRR_15680, HFRR_15683 (Sac and Fox Nation comments describing “permanent and irreparable pollution of the Sac and Fox Nation’s groundwater by oil and 24 gas activities” and “multiple oil spills”); HFRR_23495 (Pawnee Nation Resolution describing “a 25 growing epidemic of man-made earthquakes,” and “a serious water supply crisis . . . due to [the] groundwater supply [now being] threatened by . . . fracking and associated waste water disposal well 26 operations”); HFRR_DEL_62544–46 (memo describing potential groundwater contamination from hydraulic fracturing on Wind River Reservation in Wyoming). Accordingly, numerous tribes and 27 individual Native Americans submitted comments opposing the Repeal. See, e.g., HFRR_2552–53, 28 2556 (Thlophthlocco Tribal Town); HFRR_3708–09 (Three Affiliated Tribes of Fort Berthold member); HFRR_15934–35 (same); HFRR_15680–83 (Sac and Fox Nation).

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 34 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 44 of 49

1 the Repeal “[h]as potential substantial direct effects on tribes”); HFRR_DEL_65719 (BLM staff 2 comment suggesting that the EA “consider the impact of the rule on Indian lands where no tribal 3 regulations exist. BLM may wish to identify that issue here and how it intends to address” it); 4 HFRR_3567 (White House Office of Management and Budget “was particularly concerned with the 5 gap for Indian lands that don’t have any specific [hydraulic fracturing] regulations”). Other 6 commenters made the same point. See, e.g., HFRR_15682–83 (Sac and Fox Nation comments 7 explaining that “[r]elying on existing state regulations is inadequate for protecting tribes” because 8 some tribes lack the resources to develop and enforce oil and gas regulations); HFRR_1864 (EPA 9 comment querying whether BLM would provide funding and support “necessary for a tribe to start 10 developing these oil and gas programs”). BLM did not take this advice, and never analyzed the 11 disparate impacts on tribal lands and Native American communities.17 12 In one section of the EA, BLM purports to address “environmental justice,” and concludes 13 that the Repeal would not have “disproportionately high and adverse human health or environmental 14 effects on minority and low-income populations.” EA at 39. But this section makes no mention of 15 disproportionate impacts to Native Americans, and provides no support for its conclusion. See Ctr. 16 for Food Safety v. Vilsack, No. C 08-00484 JSW, 2009 WL 3047227, at *9 (N.D. Cal. Sept. 21, 17 2009) (holding that agency violates NEPA when “there is no support in the record for [its] 18 conclusion”). BLM’s purported environmental justice analysis, in fact, does nothing more than 19 repeat generalized statements about the 2015 Rule while ignoring the Repeal’s adverse impacts on 20 tribal communities. EA at 39. For example, BLM states that “most of the states where Federal and 21 Indian oil and gas activities are taking place” have regulations addressing pits and “[s]tate 22 regulations such as those apply on Federal lands.” Id. This statement, however, ignores that those 23 state regulations do not apply on Indian lands. See, e.g., White Mountain Apache Tribe v. Bracker, 24 25 17 In its rush to complete the Repeal, BLM also neglected to consult with several tribes until mid- 26 January 2018—three weeks after the Repeal was finalized. HFRR_2555, 2559 (documenting consultation with Thlopthlocco Tribal Town and members of Seminole and Muscogee Creek 27 Nations); see also HFRR_DEL_53601 (email one month before Repeal finalized indicating that 28 there were “50+ problematic [tribal consultations] from the [New Mexico State Office] that are not complete”).

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 35 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 45 of 49

1 448 U.S. 136, 144 (1980); HFRR_DEL_75962–63 (noting that state regulations do not apply on 2 Indian lands). This discussion, like the rest of the EA, violates NEPA by focusing on only federal 3 lands and arbitrarily ignoring the Repeal’s significant disproportionate impact on tribal communities. 4 See Kraayenbrink, 632 F.3d at 493 (holding agency’s decision arbitrary where “BLM entirely failed 5 to consider an important aspect of the problem”). 6 B. BLM Violated NEPA by not Preparing an EIS. 7 NEPA only allows agencies to rely on an EA if a proposed action “will not have a significant 8 effect” on the environment. 40 C.F.R. § 1508.13. If a proposed action may have a significant 9 impact, NEPA requires a more detailed analysis—an environmental impact statement (EIS). 42 10 U.S.C. § 4332(2)(C); 40 C.F.R. § 1508.18. To avoid preparing an EIS, an agency must make a 11 “finding of no significant impact” (FONSI) for its proposed action. 40 C.F.R. § 1508.13. 12 Agencies must prepare an EIS if there are even “substantial questions whether a project may 13 have a significant effect on the environment.” Anderson v. Evans, 371 F.3d 475, 488 (9th Cir. 2004) 14 (quotation omitted, emphasis added). “[T]o prevail on a claim that the [agency] violated its statutory 15 duty to prepare an EIS, a plaintiff need not show that significant effects will in fact occur. It is 16 enough for the plaintiff to raise substantial questions whether a project may have a significant effect 17 on the environment.” Blackwood, 161 F.3d at 1212 (quotations and citations omitted, emphasis 18 added). When considering whether an agency acted arbitrarily or capriciously in issuing a FONSI 19 instead of completing an EIS, the reviewing court “must determine whether the agenc[y] that 20 prepared the [environmental assessment] took a ‘‘hard look’ at the environmental consequences’ of 21 the proposed action.” Anderson, 371 F.3d at 486. 22 Here, BLM issued a FONSI determining that the Repeal would have no significant impact on 23 the environment and thus no EIS was required. EA at 47–53.18 This was arbitrary and capricious 24 because there are at least “substantial questions” about the significance of the impact from returning 25 to BLM’s outdated 1980s regulations. Anderson, 371 F.3d at 486, 488. 26

27 18 In BLM’s haste to finalize the Repeal, Defendant Joseph Balash “inadvertently omitted” to sign 28 the FONSI until April 2019, more than a year after the Repeal was finalized. ECF No. 108 at Ex. C ¶ 10.

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 36 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 46 of 49

1 In deciding whether to prepare an EIS, NEPA regulations require agencies to consider “both 2 context and intensity.” 40 C.F.R. § 1508.27. Context “delimits the scope of the agency’s action,” 3 Nat’l Parks & Conservation Ass’n v. Babbitt, 241 F.3d 722, 731 (9th Cir. 2001), and contextual 4 “[s]ignificance varies with the setting of a proposed action,” 40 C.F.R. § 1508.27(a). The Repeal is 5 a nationally-applicable regulation that affects thousands of new oil and gas wells drilled each year on 6 federal and Indian lands. RIA at 3. This is precisely the type of action that has significant impacts. 7 The Council on Environmental Quality regulations implementing NEPA, in fact, expressly mention 8 new agency regulations as examples of actions that may require an EIS. See 40 C.F.R. § 1502.4(b) 9 (EISs “may be prepared, and are sometimes required, for broad Federal actions such as the adoption 10 of new agency . . . regulations”); see also, e.g., Citizens for Better Forestry v. U.S. Dep’t of Agric., 11 632 F. Supp. 2d 968, 973 (N.D. Cal. 2009) (Citizens for Better Forestry II) (Forest Service prepared 12 EIS for national land management regulation). 13 BLM’s FONSI claims that context weighs against preparing an EIS for the Repeal because it 14 will prepare additional NEPA analyses “when oil and gas operators seek approval” of drilling 15 permits, and that later analysis will address the Repeal’s impacts. EA at 48–49. Such project-by- 16 project analysis, however, will never consider the full, cumulative effects of this nationwide 17 regulation. By focusing on site-specific drilling approvals, BLM ignores the national scope of the 18 Repeal and fails to accurately address the significance of its impacts on federal and Indian lands 19 across the country. See Sierra Club v. Bosworth, 510 F.3d 1016, 1027–30 (9th Cir. 2007) (Forest 20 Service’s conclusion that nationally-applicable categorical exclusion from NEPA would not have 21 cumulatively significant impacts was arbitrary and capricious despite prospect of additional analysis 22 at project level); see also id. at 1026 (categorical exclusions subject to same standard as for requiring 23 EIS). 24 Moreover, an agency may not avoid its obligation to prepare an EIS for a broad 25 programmatic decision like a national rule merely by promising to address its impacts later. “If an 26 agency were able to defer analysis discussion of environmental consequences . . . based on a promise 27 to perform a comparable analysis in connection with later site-specific projects, no environmental 28 consequences would ever need to be addressed [at the programmatic level].” Kern, 284 F.3d at

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 37 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 47 of 49

1 1072. In fact, this court has rejected the argument “that subsequent environmental analysis in 2 connection with [future site-specific decisions] will satisfy the NEPA requirements for” a national 3 land management regulation. Cal. ex rel. Lockyer v. U.S. Dep’t of Agric., 459 F. Supp. 2d 874, 907 4 (N.D. Cal. 2006) (Lockyer I). Lockyer I explained that future site-specific NEPA analysis does not 5 “excuse[] the failure to comply with NEPA where a nationwide Rule has been repealed and replaced 6 with a less environmentally protective scheme. While the Forest Service may (and should) conduct 7 later project-specific NEPA analysis, that cannot substitute for a programmatic analysis of the 8 environmental effects of the [national] Rule.” Id. at 908; see also Citizens for Better Forestry I, 481 9 F. Supp. 2d at 1086 (rejecting agency’s failure to conduct NEPA analysis before promulgating a 10 nationally-applicable regulation that rescinded earlier environmental protections, and explaining that 11 “NEPA’s requirement of an EIS is not necessarily limited to site or project-specific impacts or 12 activities” (emphasis in original)). 13 The second consideration in the significance test, “intensity,” assesses the “severity of 14 impact.” 40 C.F.R. § 1508.27(b). The regulations list ten factors for determining whether an 15 action’s “intensity” warrants preparing an EIS. Id. The presence of any “one of these factors may 16 be sufficient to require preparation of an EIS in appropriate circumstances.” Ocean Advocates v. 17 U.S. Army Corps of Eng’rs, 402 F.3d 846, 865 (9th Cir. 2005). 18 The FONSI’s findings on these factors largely repeat the same flawed arguments discussed 19 above, and they are arbitrary and capricious for similar reasons. For example, in considering 20 “[i]mpacts that may be both beneficial and adverse,” 40 C.F.R. § 1508.27(b)(1), BLM asserts that 21 the Repeal could “alleviate some adverse on-the-ground indirect impacts” from requiring the use of 22 tanks instead of pits, EA at 49. But the FONSI never addresses BLM’s 2015 finding that tanks pose 23 far fewer environmental risks than pits. See id. Instead, BLM emphasizes the potential impacts 24 from tanks, then jumps to the conclusion that repealing the requirement to use them will not result in 25 significant impacts. Id. Thus, rather than addressing both beneficial and adverse impacts, it only 26 analyzes the purported benefits of pits. As discussed above, however, without taking a hard look at 27 the well-documented harms caused by pits—or addressing BLM’s 2015 finding that pits are far more 28 harmful than tanks—this conclusion is arbitrary and capricious. See supra pp. 32–33.

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 38 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 48 of 49

1 Similarly, BLM asserts that the Repeal would not have a significant adverse impact on 2 “public health or safety,” have “cumulatively significant impacts,” or have “highly controversial,” 3 “uncertain” or “unknown” environmental effects, 40 C.F.R. § 1508.27(b)(2), (4), (5), (7), because 4 most states have “appropriate regulatory programs,” in addition to BLM’s 1980s-era regulations, EA 5 at 50–52. But as discussed above, this rationale ignores the significant differences between state 6 regulations and the 2015 Rule, as well as the lack of tribal regulations. See supra pp. 9–11; see also 7 Ocean Advocates, 402 F.3d at 866 (“A patently inaccurate factual contention can never support an 8 agency’s determination that a project will have ‘no significant impact’ on the environment.”). 9 Moreover, this court has already found that the public health risks posed by hydraulic 10 fracturing, especially a well-documented “risk of water pollution,” were sufficient to require BLM to 11 prepare an EIS. Ctr. for Biological Diversity v. BLM, 937 F. Supp. 2d 1140, 1158–59 (N.D. Cal. 12 2013). Further, this court recognized that broad public opposition, combined with “serious concerns 13 raised by federal and state [environmental] agencies,” can make a BLM oil and gas decision 14 “controversial” enough to require an EIS. Id. (quotations omitted); accord Nat’l Parks & 15 Conservation Ass’n, 241 F.3d at 736–37 (similar); CBD v. NHTSA, 538 F.3d at 1222 (similar). 16 Here, the 1.5 million comments BLM received supporting the 2015 Rule, and the serious concerns 17 raised by the U.S. EPA, tribes, states, and other experts, supra pp. 3–4, support the need for an EIS. 18 BLM also asserts that the Repeal will not have significant effects on areas that are 19 ecologically, culturally, or historically significant, 40 C.F.R. § 1508.27(b)(3), (8), because it will not 20 “impact the location or number of hydraulic fracturing operations,” EA at 50. But regardless of the 21 number of operations, the Repeal changes the nature of those operations by allowing hundreds of 22 new waste pits per year, by eliminating protections against ground and surface water contamination, 23 and by eliminating informational requirements designed to help BLM mitigate impacts from water 24 withdrawals on listed species. Supra pp. 13–18, 27–30. BLM’s FONSI fails to address the 25 significance of those changes.19 26

27 19 BLM’s finding, EA at 51, that the Repeal would not “establish a precedent for future actions” that 28 have significant effects, 40 C.F.R. § 1508.27(b)(6), is plainly arbitrary. The Repeal establishes that outdated and inadequate regulations will apply to thousands of new oil and gas wells nationwide.

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 39 Case 4:18-cv-00524-HSG Document 110 Filed 06/03/19 Page 49 of 49

1 Finally, BLM states that the Repeal will not adversely affect any ESA-listed species, 40 2 C.F.R. § 1508.27(b)(9), because site-specific drilling proposals will be reviewed in compliance with 3 the ESA, EA at 52–53. However, BLM has no basis for drawing that conclusion because it never 4 consulted with FWS about the Repeal. See supra pp. 30–31. 5 BLM’s conclusion that the Repeal’s impacts will not be significant is therefore arbitrary and 6 capricious. Anderson, 371 F.3d at 486 (explaining that it is arbitrary and capricious for an agency to 7 issue a FONSI if the agency failed to take a ‘‘hard look at the environmental consequences of the 8 proposed action” in its EA (quotations omitted)). The FONSI should be set aside and remanded for 9 reconsideration by BLM. 10 CONCLUSION 11 For the reasons stated above, the Repeal should be set aside as arbitrary and capricious and 12 contrary to law. 13 14 Respectfully submitted this 3rd day of June, 2019, 15 16 /s/ Nathan Matthews Nathan Matthews, CA Bar No. 264248 Michael S. Freeman, CO Bar No. 30007 (admitted pro hac vice) 17 Sierra Club Joel Minor, CO Bar No. 47822 (admitted pro hac vice) 18 2101 Webster Street, Suite 1300 Earthjustice Oakland, CA 94612 633 17th Street, Suite 1600 19 Phone: (415) 977-5695 Denver, CO 80202 Fax: (510) 208-3140 Phone: (303) 623-9466 20 [email protected] Fax: (303) 623-8083 [email protected] 21 Attorney for Plaintiff Sierra Club [email protected] 22 Attorneys for Plaintiffs Sierra Club, Center for Biological 23 Diversity, Diné Citizens Against Ruining Our Environment, Earthworks, Fort Berthold Protectors of Water and Earth 24 Rights, Southern Utah Wilderness Alliance, The Wilderness 25 Society, and Western Resource Advocates

26

27 Contrary to the FONSI, EA at 53, the Repeal also “threatens a violation of Federal” law, id. 28 § 1508.27(b)(10), by disregarding BLM’s statutory duties as a federal land manager and trustee for Indian lands, supra pp. 20–22.

Citizen Group Plaintiffs’ Motion for Summary Judgment Case No. 4:18-cv-00524-HSG, related to Case No. 4:18-cv-000521-HSG 40