June 8, 2022

Ninth Circuit Court of Appeals Invalidates Fracking Offshore California

Holland & Knight Alert
Jim Noe

In Environmental Defense Center et al. v. BOEM et al (No. 19-55526), the U.S. Court of Appeals for the Ninth Circuit on June 3, 2022, invalidated the U.S. Department of Interior's issuance of dozens of permits for well stimulation – or "fracking" – operations in the waters offshore California after concluding that Interior's environmental review of the operations was inadequate under the National Environmental Policy Act (NEPA).

The ruling extends an injunction blocking fracking permits for drilling operations off the coast of California until a full environmental review of the impacts of offshore fracking is conducted. The Court ruled that Interior acted arbitrarily and capriciously under NEPA by relying on environmental assessment of offshore fracking, rather than conducting a more detailed environmental impact statement that more fully evaluated the environmental impacts of offshore fracking, after concluding that offshore well stimulation treatments such as fracking involve "unknown risks." Interior also violated NEPA by failing to evaluate "reasonable alternatives" to its finding that offshore fracking posed no significant impact on the environment (e.g., failing to consider alternatives such as limiting the number of fracking permits, limiting fracking operations to certain locations or depths, etc.)

The court also concluded that Interior violated the Endangered Species Act and the Coastal Zone Management Act in issuing the permits for fracking without a more robust environmental analysis and consideration of whether fracking operations were consistent with California's coastal zone management plans.

Unclear Future

The long-term impact of the ruling is uncertain, but it could jeopardize the permitting of well stimulation or fracking operations on federal lands and other offshore waters, such as offshore operations in the Gulf of Mexico. Many offshore drilling operations involve some level of well stimulation operations, and an expansive interpretation of the Ninth Circuit's ruling could curtail domestic production in the more active Gulf of Mexico, which accounts for approximately 15 percent to 20 percent of domestic oil and gas production.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.

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