Court Requires MMS to Address Environmental Impact of Future Exploration and Development Activities Before Extending Oil & Gas Leases

The final appeals process of League for Coastal Protection v. Norton ended in October 2007. The case, originating in the Northern District of California, involved the extension of 36 oil and gas leases off the central coast of California by the Mineral Management Service (“MMS”). Plaintiffs, various environmental groups, claimed that the MMS did not conduct environmental analyses or engage in consistency review processes with the California Coastal Commission before making a “finding of no significant impact” (“FONSI”) and granting the lease extensions.

In fact, the Court found that while the MMS had indeed addressed potential environmental impact of activities that had already been planned during the lease extensions (including underwater acoustic surveys), the MMS did not address the environmental impact of future exploration and development activities under the extended leases. The Court noted that the MMS is required by regulation to consider not just the “direct effects” of an action, but also the “indirect effects, which are caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable.” The Court noted that the stated purpose of the extensions was to facilitate future development of the leases and exploratory drilling, and that the future exploration and development was clearly foreseeable and must be addressed before lease extensions could be granted.