Montana Wildlife Federation v. Montana Board of Oil & Gas Conservation

June 19 2012

DA 11-0537

IN THE SUPREME COURT OF THE STATE OF MONTANA
2012 MT 128

MONTANA WILDLIFE FEDERATION,
NATIONAL WILDLIFE FEDERATION,

Plaintiffs and Appellants,

v.

MONTANA BOARD OF OIL & GAS CONSERVATION,

Defendant and Appellee,

and

FIDELITY EXPLORATION & PRODUCTION COMPANY,

Defendant-Intervenor and Appellee,

and

MONTANA PETROLEUM ASSOCIATION,

Defendant-Intervenor and Appellee.

APPEAL FROM: District Court of the Sixteenth Judicial District,
In and For the County of Fallon, Cause No. DV 08-34
Honorable Joe L. Hegel, Presiding Judge

COUNSEL OF RECORD:

For Appellants:

David K. W. Wilson, Jr. (argued); Morrison, Motl, and Sherwood, PLLP;
Helena, Montana

For Appellee:

Norman C. Peterson (argued), Agency Legal Services; Helena, Montana
(Montana Board of Oil & Gas Conservation)
 Dana L. Hupp (argued), Gough, Shanahan, Johnson, & Waterman, PLLP;
Helena, Montana
(Fidelity Exploration & Production Company)

Steven J. Lechner (argued), Mountain States Legal Foundation;
Lakewood, Colorado (Montana Petroleum Association)

Steven W. Jennings, Colby L. Branch; Crowley Fleck; Billings, Montana
(Montana Petroleum Association)

Argued: April 4, 2012
Submitted: April 11, 2012
Decided: June 19, 2012

Filed:

__________________________________________
Clerk

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Justice Beth Baker delivered the Opinion of the Court.

¶1 The Montana Wildlife Federation (MWF) and National Wildlife Federation

(NWF) (collectively “Federations”) appeal the Sixteenth Judicial District Court’s order

granting summary judgment to defendants Montana Board of Oil & Gas Conservation

(Board or MBOGC), Fidelity Exploration and Production Company (Fidelity), and

Montana Petroleum Association (MPA) (collectively “Appellees”). We affirm the

District Court’s grant of summary judgment. We consider three issues on appeal:

¶2 1. Whether the District Court erred in conducting its review under § 82-11-144,
MCA, and in considering evidence that was not part of the administrative record.

¶3 2. Whether the District Court erred in determining that twenty-three individual
environmental assessments prepared by the Board for gas development in the Cedar
Creek Anticline were adequate under the Montana Environmental Policy Act.

¶4 3. Whether the District Court erred in ruling that MBOGC did not have to
prepare a programmatic environmental impact statement for oil and gas development in
the Cedar Creek Anticline area.

INTRODUCTION

¶5 At issue is the MBOGC’s issuance of twenty-three gas well permits to Fidelity in

the area known as the Cedar Creek Anticline (CCA), a major geologic feature that

extends for nearly 120 miles, from Glendive, Montana at the north, through Baker,

Montana, and into North Dakota. Its southern end is in South Dakota. The CCA is the

largest oil and gas producing structural geologic feature in Montana. Natural gas

exploration began in the CCA area in 1912, and significant gas development occurred

between 1914 and 1920. Oil was discovered in the CCA in January of 1952. The CCA

hosts a large industrial complex containing both surface and sub-surface infrastructure
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associated with natural resource development including oil and gas drilling, windmills,

and an underground gas storage reservoir. Within the CCA are the Cedar Creek Gas

Field and the Cedar Creek Oil Field. Fields in parts of Fallon, Wibaux, Prairie, and

Dawson Counties produce oil and gas from the CCA. The Cedar Creek Gas Field is in

the highest elevation of the CCA and is approximately three to five miles wide. As of

2008, there were 1100 wells drilled in the Cedar Creek Gas Field. At the time the

Federations filed suit, Fidelity operated 926 gas wells in the field, holding leases to

approximately 62,256 acres of land.

¶6 The MBOGC was established in 1953 with the passage of the Montana Oil and

Gas Conservation Act. The MBOGC has broad authority over the issuance of permits to

drill for and the regulation of oil and gas. Section 82-11-111, MCA. On August 7, 2008,

Fidelity submitted applications for permits to drill twelve natural gas wells in the Cedar

Creek Gas Field. On October 29, 2008, Fidelity submitted applications for permits for

eleven additional natural gas wells in the field. The MBOGC prepared environmental

assessments for each application and issued Fidelity permits to drill twenty-three new

natural gas wells. Due to the nature of the gas wells, only infrequent site visits and

limited infrastructure are required. Namely, there is no need for water, improved roads,

or electric motors. As a general rule, oil wells require more monitoring and infrastructure

than do the type of gas wells at issue.

¶7 The CCA also is home to various animal species, notably here, the sage grouse.

Sage grouse depend on sagebrush to feed, breed, nest, and live. When sagebrush is

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destroyed by human activity such as the construction of roads and power lines,

conversion of land to tillage agriculture, or is replaced with other grass to improve range

forage for livestock, sage grouse lose critical habitat. It is estimated that approximately

fifty percent of the sagebrush in the United States has been destroyed or lost. The Court

takes judicial notice, pursuant to M. R. Evid. 201, that the U.S. Fish and Wildlife Service

announced in March 2010 its finding that rangewide listing of the greater sage grouse as

a threatened or endangered species is warranted, but precluded by higher priority listing

actions. 75 Fed. Reg. 13910 (March 23, 2010). The sage grouse maintain a number of

breeding grounds (called “leks”) on the CCA. Federations’ expert opined that eight of

the proposed twenty-three wells are within two miles of an existing lek. Federations

challenge the issuance of the permits on the premise that the environmental assessments

underlying them did not adequately assess the potential impacts to the sage grouse and

their breeding grounds. They also assert that MBOGC should be required to conduct a

programmatic evaluation of the environmental impacts of gas well drilling in the CCA.

PROCEDURAL AND FACTUAL BACKGROUND

Role of the MBOGC and Other Agencies

¶8 The MBOGC and other state and federal agencies play various roles in the

protection and management of natural resources, compliance with environmental laws,

and the issuance of drilling permits. The MBOGC has regulatory control over the

drilling of oil and gas wells and is authorized to take measures to prevent waste of oil and

gas resources, to prevent contamination of or damage to surrounding land or underground

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strata, and to promote environmentally sound development of oil and gas in Montana.

Section 82-11-111, MCA. In the exercise of its jurisdiction over oil and gas wells on

private/fee and State owned lands, § 82-11-103, MCA, the Board is required to comply

with the Montana Environmental Policy Act (MEPA). Section 75-1-101, et seq., MCA;

Admin. R. M. 36.2.524 (MEPA requires that “the agency shall determine the significance

of impacts associated with the proposed action.”).

¶9 The federal Bureau of Land Management (BLM), part of the Department of the

Interior, carries out a variety of programs for the management and conservation of

federally owned land and resources. BLM’s role in oil and gas development is limited: it

is responsible for ensuring that the federal mineral resource is conserved and developed

in a safe and environmentally sound manner. The BLM has no state-level equivalent.

The duties undertaken by BLM at the federal level are split among various agencies in

Montana: the Department of Natural Resources and Conservation (DNRC), the

Department of Environmental Quality (DEQ), Montana Fish, Wildlife, and Parks (FWP),

and the State Historical Preservation Office. The MBOGC has a more limited range of

responsibilities in evaluating environmental impacts than does the BLM. In particular,

the MBOGC relies on other agencies with applicable expertise in complying with MEPA.

MBOGC consults with and relies on FWP for information regarding the conservation and

management of wildlife and recreation resources in Montana.

¶10 Before any environmental assessments were conducted in connection with the

wells at issue in this case, state and federal agencies prepared two major environmental

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reviews pertaining to oil and gas development in the area of the CCA. As explained

below, these reviews were critical to the Board’s decision to issue permits for natural gas

wells and provide the foundation for its review of hundreds of permit applications

annually. The parties stipulated to admission in the District Court of the underlying

Administrative Record in this case, which includes, in part, the two reviews. The

Administrative Record is composed of: the Draft Programmatic Environmental Impact

Statement—Oil and Gas Drilling Production in Montana (1989); the Technical Appendix

to the Draft; the Final Programmatic Environmental Impact Statement (EIS)—Oil and

Gas Drilling and Production in Montana (1989); Montana Final Statewide Oil and Gas

EIS and Proposed Amendment to the Powder River and Billings Resource Management

Plans (2003); MBOGC’s Record of Decision related to the EIS; MBOGC Orders related

to the Cedar Creek Gas Field and Fidelity’s 2003 Application for an Order increasing

Well Density; documentation contained in the Well Files for the wells associated with the

environmental assessments challenged by Federations; documentation contained in the

Well Log Files for the wells being challenged; Well Production reports for the wells

being challenged; and five different articles of scientific research on sage grouse

populations and energy development. The following discussion comes from information

contained in the Administrative Record, except as otherwise noted.

The 1989 PEIS

¶11 In 1989, the MBOGC undertook to prepare a Programmatic Environmental Impact

Statement on Oil and Gas Drilling Production in Montana (1989 PEIS), the goal of which

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was to establish “a quick and efficient method for [MBOGC] to follow in integrating

[MEPA] into its decision making.” The Board was required to prepare the programmatic

statement pursuant to the 1987 Legislature’s Senate Bill 184 (1987 Mont. Laws ch. 473),

which granted the Board a two-year exemption from the requirements of MEPA ending

on June 30, 1989. In January of 1989, the MBOGC, along with the DNRC, released a

draft PEIS for public comment. The 1989 Montana legislature passed Senate Bill 201,

which authorized MBOGC to complete the PEIS and adopt a process to review drill

permits in compliance with MEPA. 1989 Mont. Laws ch. 566. The 1989 PEIS presented

various alternatives for addressing environmental reviews from which the Board adopted

a review process for permitting wells. The draft 1989 PEIS concluded that for the vast

majority of wells, the only documentation necessary to show compliance with MEPA is a

brief checklist Environmental Assessment (EA) prepared by MBOGC staff. The draft

version of the 1989 PEIS analyzes areas with low to moderate impact potential for

wildlife, including a discussion on the impacts to sage grouse from oil and gas activity,

particularly the birds’ susceptibility to disturbance during strutting season. The final 1989

PEIS summarized and updated the draft, and was released in December 1989.

¶12 The 1989 PEIS sets forth the steps the MBOGC must fulfill to complete a Level 1

MEPA review. Over the Federations’ objection, the District Court admitted the affidavit

of Tom Richmond, Division Administrator for MBOGC. Richmond’s affidavit states

that, under a Level 1 Review, “it is assumed that accurate information about both the

surface and sub-surface is readily available for a proposed drilling operation, and that no

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unusual circumstances would raise questions about its ability to comply with applicable

MBOGC rules.” For Level 1 review, the final 1989 PEIS articulated the following steps:

a desk review of data submitted by the operator or collected by the MBOGC, preparation

of an environmental checklist, and attachment of special permit conditions to address

environmental concerns. The 1989 PEIS included an example of a checklist for MBOGC

to use in evaluating the impacts associated with drilling. The form utilized by MBOGC

for the twenty-three wells in question mirrors this example and consists of a series of

requests for information and decisions about each well. Each checklist EA has ten

categories for review: (1) Operator and Well Location; (2) Air Quality; (3) Water

Quality; (4) Soils/Vegetation/Land Use; (5) Health Hazards/Noise; (6)

Wildlife/Recreation; (7) Historical/Cultural/Paleontological; (8) Social/Economic; (9)

Remarks or Special Concerns for the Site; (10) Summary: Evaluation of Impacts and

Cumulative Effects.

The 2003 FEIS

¶13 In 1999, MBOGC, along with the DEQ and the BLM, began work on a new

programmatic environmental impact statement (2003 FEIS) to analyze and disclose

reasonably anticipated impacts from coalbed natural gas (CBNG) development in

Montana. The 2003 FEIS determined that CBNG wells were not likely to be economical

if drilled and produced on a single well basis, and that, because of the need for

installation of significant water-handling infrastructure, project level permitting was

likely necessary for CBNG production. This case does not involve CBNG wells.

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According to Richmond, however, “while the 2003 FEIS focused on the potential impacts

of CBNG exploration and production throughout the state, the effects of anticipated

conventional oil and gas development were also analyzed.” However, the planning area

in the 2003 FEIS did not include Fallon, Wibaux, Prairie, and Dawson Counties, those

counties producing the oil and gas from the CCA. Instead, the counties assessed were the

adjacent Custer and Carter Counties, along with Blaine, Gallatin, Park, Wheatland,

Golden Valley, Musselshell, Sweet Grass, Stillwater, Carbon, Yellowstone, Big Horn,

Treasure, Powder River, and Rosebud Counties.

¶14 The permitting process developed in connection with the 1989 PEIS was reviewed

by MBOGC when it, along with the other agencies, prepared the 2003 FEIS. Richmond

noted during his deposition (not part of the administrative record), that “what the 2003

EIS did allow us to do was to review the new information and make a refreshed decision

about our permitting process on conventional oil and gas.” He further explained:

The 2003 EIS, because it has an emphasis on coalbed, required us to look at
how we would permit coalbed methane and the decision that we made is
that we would permit it on a project level basis rather than an individual
well basis . . . So the process of making that decision caused us to look at
how we do individual well permits for conventional oil and gas and we
decided at that time not to change that process and try and incorporate a
greater degree of project level permitting.

The 2003 FEIS had a much greater depth of analysis than the 1989 PEIS because the

2003 FEIS reviewed land management generally, and not just oil and gas regulation.

Significantly, however, MBOGC “left the individual well permit process in place for

conventional oil and gas wells.” The 2003 FEIS included a review of impacts to wildlife,

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including sage grouse, and considered the impacts of both CBNG development and

conventional oil and gas development. The 2003 FEIS also explicitly noted that it “may

be tiered from or incorporate by reference other documents” including the 1989 PEIS.

The MBOGC has not performed any other programmatic evaluation specific to oil and

gas development in the CCA.

The Completion of Environmental Assessments and Issuance of Permits

¶15 Steven Sasaki is the Chief Field Inspector for MBOGC and was responsible for

gathering information for, assessing, and performing the environmental assessments for

the twenty-three permits at issue in this case. In so doing, he utilized the checklist form

developed as part of the 1989 PEIS. Sasaki has been an employee of the MBOGC for

twenty-two years and has traveled the length of the CCA, making approximately ten trips

to different parts of the CCA in preparing hundreds of environmental assessments for gas

wells in the Cedar Creek Gas Field. Sasaki testified by his affidavit, over the

Federations’ objection, that each assessment required particular information and

consideration of the circumstances of each well, along with its cumulative effect.

¶16 Sasaki’s affidavit described that prior to completing the assessments, he spoke

with a FWP biologist, who directed him to consult the “Montana Heritage Tracker”

website (http://mtnhp.org), an extensive database of information on animal and plant

species in Montana. The form created in the 1989 PEIS directs that FWP is responsible

for identifying “sensitive wildlife areas.” The form contains a section for whether there

are threatened or endangered species or sensitive habitat in the geographic area subject to

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the permitting process. Sasaki consulted the Heritage Tracker database and reviewed

topographic maps to determine whether the areas in question were close to designated

wildlife refuges, national grass lands, national parks, or similar designated areas.

Sasaki’s affidavit states that he “found there were no threatened or endangered species or

sensitive wildlife areas in the proximity of any of the proposed wells, nor were there any

state or federally designated sensitive wildlife areas.” Following his review of

information concerning the area of the newly requested permits, the previously drilled

wells and their related infrastructure, Sasaki determined that the addition of twenty-three

wells would not create new human access to wildlife habitat or lead to further cumulative

impacts.

The Current Litigation

¶17 Federations brought suit in 2008 following issuance of the twenty-three permits,

contending the environmental assessments were inadequate under MEPA. The complaint

requested that the District Court (1) declare that the twenty-three EAs are inadequate

under MEPA; (2) declare that MBOGC is in violation of MEPA for failing to perform a

programmatic review of the oil and gas development in the Cedar Creek Gas Field; and

(3) issue an order enjoining MBOGC from further issuing well drilling permits until a

programmatic review has been performed under MEPA on the Cedar Creek Gas Field. In

particular, Federations argued that “sage grouse are particularly susceptible to the

development at issue” and that oil and gas development “results in calculable impacts on

breeding populations.” The District Court granted Fidelity’s motion to intervene as a

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defendant on February 6, 2009, and MPA’s motion to intervene on April 4, 2009. The

parties filed cross-motions for summary judgment. Appellees’ motion for summary

judgment argued that issuance of the environmental assessments was proper under

MEPA and that the MBOGC’s approval of infill gas wells was not a major state action

necessitating an EIS.

¶18 Following a motion by Appellees, the District Court concluded that § 82-11-144,

MCA, applied to the proceedings. It provides in part that for a suit challenging any rule,

order or act by the Board, “the suit shall be . . . tried de novo . . . and disposed of as an

ordinary civil suit and not upon the record of any hearing before the [MBOGC].” After a

period of discovery, the parties submitted additional material to the court, and the agency

was permitted to submit affidavits and other matters to supplement the administrative

record. The District Court also granted MBOGC’s unopposed motion to lodge the

MBOGC’s Administrative Record (as discussed above) and include it in the record of the

court.

¶19 Supplementing their motion for summary judgment, Federations offered the

affidavit of James Gore, a wildlife biologist with experience studying sage grouse and

other birds. He attested to general knowledge about sage grouse and the impacts that the

human population can have on them. In its later order on summary judgment, the District

Court concluded that, though Gore is an expert on sage grouse generally, he “is not an

expert regarding oil and gas wells and the infrastructure required to support them,” nor

did he acknowledge the relatively small impact of an infill gas well as opposed to drilling

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and operating an oil well. Appellees also provided additional information to the court in

support of their cross-motion for summary judgment, in the form of affidavits from

MBOGC staff, Fidelity employees, and wildlife experts which supported their position

that additional impacts on sage grouse would be minimal.

¶20 After reviewing the evidence, the District Court determined it could set aside the

MBOGC’s permit issuance under § 82-11-144, MCA, if it found the action to be

“arbitrary, unreasonable, capricious and [sic] abuse of discretion or otherwise not in

accordance with the law.” The District Court found that each of the environmental

assessments at issue is “tiered” to the 1989 PEIS and the 2003 FEIS, recognizing tiering

as “an accepted practice in which an agency relies on and incorporates analysis from a

previously prepared environmental document into a subsequent analysis” as a means to

eliminate unnecessary repetitive discussions.

¶21 The court concluded that “MBOGC reasonably determined that approval of the

infill gas wells in a pre-existing gas field where the infrastructure is almost entirely in

place would be a routine action with limited environmental impact” and it was reasonable

for the MBOGC to conclude that a checklist environmental assessment, rather than an

EIS, was adequate. In granting Appellees’ motion for summary judgment, the District

Court held that the Federations failed to rebut the presumption of validity in the Board’s

decision and that the MBOGC had given a “sufficiently hard look” at the potential

environmental impact of the proposed wells. This appeal followed.

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¶22 Over the course of the litigation, the number of contested wells has been narrowed

from the original twenty-three. Federations’ expert, Gore, in his affidavit, pointed to the

fact that any well located within two miles of active breeding leks could adversely affect

those leks. Gore identified well numbers 2863, 2864, and 2869 in the Buffalo Creek

drainage; well numbers 2257 and 2261 in the Sandstone Creek drainage; and well

numbers 2252, 2253, and 2256 in the Little Beaver Creek drainage as being within two

miles of lek sites. The District Court determined that “all parties and witnesses agreed

that . . . 15 gas wells at issue in this case are not located in close proximity of any of the

sage grouse leks and present no risk of harm to sage grouse leks.” Federations do not

dispute this finding on appeal. Fidelity’s Dennis Zander testified by affidavit that five of

the eight disputed wells were scheduled to be drilled in 2010. At oral argument,

Federations’ counsel acknowledged that some of the wells at issue already had been

drilled, and MBOGC’s counsel indicated that only three undrilled wells remain directly at

issue.

¶23 Two of the well sites, numbers 2253 and 2256, are located on surface owned by

the State of Montana. In addition to the EAs prepared by the MBOGC, the DNRC

prepared EAs addressing potential environmental impacts at these two sites. The DNRC

indicated that the sites were within one mile of active sage grouse leks and that timing

restrictions would be implemented between March 1 and June 15 of any year if permits

were issued to Fidelity. However, the DNRC indicated there would otherwise be no

significant impact on the sage grouse. There is no challenge to the EAs performed by

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DNRC. The dispute, in essence, centers on six wells at most, and perhaps as few as

three, given recent drilling activity. No party sought a stay of the District Court’s order

on appeal, nor does the record reflect a motion in the District Court for an injunction

pending appeal. M. R. Civ. P. 62; M. R. App. P. 22.

STANDARD OF REVIEW

¶24 We review a district court’s grant of summary judgment de novo. Smith v. BNSF

Railway, 2008 MT 225, ¶ 10, 344 Mont. 278, 187 P.3d 639. Summary judgment is

appropriate under M. R. Civ. P. 56 where there is an absence of genuine issues of

material fact and a party is entitled to judgment as a matter of law. Smith, ¶ 10. No party

has argued that disputes of material fact preclude summary judgment in this case.

¶25 The standard of review for MEPA decisions is “whether the record establishes that

the agency acted arbitrarily, capriciously or unlawfully.” Ravalli County Fish & Game

Assn. v. Mont. Dept. of State Lands, 273 Mont. 371, 377, 903 P.2d 1362, 1366 (1995)

(quoting N. Fork Preservation Assn. v. Dept. of State Lands, 238 Mont. 451, 458-59, 778

P.2d 862, 867 (1989)). A review under the arbitrary and capricious standard “does not

permit a reversal merely because the record contains inconsistent evidence or evidence

which might support a different result. Rather, the decision being challenged must

appear to be random, unreasonable or seemingly unmotivated based on the existing

record.” Hobble Diamond Ranch, LLC v. State, 2012 MT 10, ¶ 24, 363 MT 310, 268

P.3d 31.

¶26 Decisions of the MBOGC may be set aside if the Court determines them to be

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 (a) arbitrary, unreasonable, capricious, [an] abuse of discretion or otherwise
not in accordance with law; (b) contrary to constitutional right, power,
privilege, or immunity; (c) in excess of statutory jurisdiction, authority, or
limitations or short of statutory right; (d) without observance of procedure
required by law; or (e) unwarranted by the facts[.]

Section 82-11-144(2), MCA.

DISCUSSION

¶27 1. Whether the District Court erred in conducting its review under § 82-11-144,
MCA, and in considering evidence that was not part of the administrative record.

¶28 Federations contend that the District Court erred in applying the standard of

review set forth in § 82-11-144, MCA. That section provides in part:

Any interested person adversely affected by any provision of this chapter or
by any rule or order adopted by the board hereunder or by any act done or
threatened thereunder may obtain court review and seek relief by a suit for
an injunction against the board as defendant. . . . The suit shall be given
preferential setting and shall be tried de novo and disposed of as an
ordinary civil suit and not upon the record of any hearing before the board.

Section 82-11-144, MCA (emphasis added). This section is contained in the part of the

Montana Code Annotated entitled “Regulation by Board of Oil and Gas Conservation,”

within the Oil and Gas Conservation chapter. Federations contend that a district court’s

review under this section does not apply to a MEPA claim but rather to other

administrative actions by the MBOGC provided for in the preceding sections of the

chapter. They contend that since the case was filed under MEPA, specifically § 75-1-

201(6)(a)(ii), MCA (2007), the court’s review is limited to the administrative record.

They argue the District Court’s consideration of evidence provided by Appellees that did

not constitute part of the administrative record was in error. Citing Skyline Sportsman’s

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Assoc. v. Bd. of Land Commrs., 286 Mont. 108, 951 P.2d 29 (1997), Federations contend

the court’s review of the outside-the-record evidence they submitted was proper, but that

such supplementation of the record is not a two-way street.

¶29 We conclude that the District Court properly considered both parties’ evidence.

Section 82-11-111(2)(c), MCA, grants the Board authority to adopt and enforce rules to

implement its objectives. Admin. R. M. 36.22.601 requires an individual to file an

application for a permit with the Board to drill an oil or gas well. Federations’ complaint

sought to enjoin the Board from issuing well permits until it conducted a programmatic

review in accordance with MEPA on the Cedar Creek Gas Field. The language in § 82-

11-144, MCA, applies to “a suit for an injunction” challenging any act of the MBOGC

within its regulatory jurisdiction and specifically mentions actions involving “the right to

drill a well.” Though the particular act challenged in this case is the Board’s MEPA

review, the legislature has directed that “when a general and particular provision are

inconsistent, the latter is paramount to the former, so a particular intent will control a

general one that is inconsistent with it.” Section 1-2-102, MCA. Because § 82-11-144,

MCA, governs review of MBOGC actions under a statutory framework in which review

and determination of well applications is one of its primary functions, we conclude that

this provision is the more particular with respect to the review of oil and gas permitting

decisions.

¶30 Because the statute is dispositive on this issue, we do not further consider the

parties’ arguments regarding consideration of non-record evidence in other contexts. The

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District Court did not err in applying § 82-11-144, MCA, and in considering evidence

outside the administrative record.

¶31 2. Whether the District Court erred in determining that twenty-three individual
environmental assessments prepared by MBOGC for gas development in the Cedar
Creek Anticline were adequate under the Montana Environmental Policy Act.

¶32 We note at the outset that since MEPA is modeled after the National

Environmental Policy Act (NEPA), federal case law construing parallel provisions in

NEPA is persuasive. Kadillak v. Anaconda Co., 184 Mont. 127, 137, 602 P.2d 147, 153

(1979). MEPA is “essentially procedural.” Like its federal counterpart, “it does not

demand that an agency make particular substantive decisions.” Rather, it requires “an

agency to review projects, programs, legislation, and other major actions of state

government significantly affecting the quality of the human environment in order to make

informed decisions.” Ravalli County Fish & Game Assn., 273 Mont. at 377-78, 903 P.2d

at 1367. The administrative procedures for MEPA are outlined in Title 36, Chapter 2,

Sub-chapter 5 of the Administrative Rules of Montana and are discussed in more detail

later in this opinion.

¶33 Federations raise three grounds in supporting their contention that the twenty-three

EAs are inadequate under MEPA: 1) MBOGC failed to properly tier its review to

previous studies; 2) MBOGC failed to take a “hard look” at oil and gas development in

the CCA; and 3) MBOGC failed to evaluate the cumulative impacts of increased well

approvals. First, we provide additional information on the 1989 PEIS and 2003 FEIS and

their analyses of the impacts of gas and oil development on sage grouse. We then

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address the issue of “tiering” in our analysis of the Federations’ “hard look” and

“cumulative impacts” arguments.

1989 PEIS and 2003 FEIS’s Reviews on Wildlife Impacts

¶34 The draft 1989 PEIS included a section on impacts of oil and gas development on

wildlife. The draft indicated that “sage grouse, sharp-tail grouse, and waterfowl could be

affected by oil and gas activity in Montana,” but that a “general discussion of possible

wildlife impacts on the various oil and gas regions is difficult” because of the varied

topography and habitat statewide. Moreover, the draft 1989 PEIS included a section

analyzing the cumulative effect of oil and gas drilling on wildlife, stating “a cumulative

effect of oil and gas drilling results from the additional development that occurs if

petroleum or natural gas are found. The discovery of gas or oil in one location often

stimulates more intense exploration in that immediate area and adjacent areas.” Citing to

studies on sage grouse and resource extraction, the draft analyzed areas with low to

moderate impact potential for wildlife, including the sage grouse: “in nonmountainous

portions of Montana, sage grouse and sharptails would be vulnerable to oil and gas

activity in the spring when the birds are concentrated on strutting (mating) grounds.”

Namely, construction and use of roads and powerlines could displace birds, decrease

local reproduction, and result in birds being killed. Further, the level of impact on sage

grouse would vary, dependent on whether the oil or gas well proved productive. The

draft 1989 PEIS also addressed how cumulative impacts to wildlife could be mitigated

and suggested efforts to protect sage grouse specifically, including creating a one-quarter-

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mile buffer strip around known strutting grounds, and restricting activities in the early

morning hours of spring when the grouse are active in strutting grounds.

¶35 The final 1989 PEIS noted specifically that in the majority of cases, the major

adverse impacts on the environment from well siting can be avoided if proper care is

taken. Notably, the final 1989 PEIS stated that other than considerations applicable to all

drilling operations, “the potential for adverse impacts is almost entirely dependent on the

sensitivity of individual drilling locations.” In the section discussing wildlife and

fisheries, the final 1989 PEIS states that “the likelihood of an adverse impact occurring in

any particular locations depends on the intensity of oil and gas activity, including length

of time that operations occur, sensitivity to the environment, cumulative disturbance that

a wildlife species has been subjected to previously, and implementation of mitigating

measures.”

¶36 The 2003 FEIS provides further analysis of potential harm to wildlife and is not

limited to the impacts of CBNG development (also called CBM or “coal-bed methane”

development), but also includes discussion of conventional oil and gas extraction.

Chapter 3 of the 2003 FEIS, titled “Wildlife,” specifically notes that sage grouse are “a

possible candidate for listing under the [Endangered Species Act]” and discusses in detail

the sagebrush habitat the birds need to survive, along with leks. Chapter 4 of the 2003

FEIS, entitled “Environmental Consequences,” describes the effect of conventional oil

and gas production.

21
¶37 An example of the similar types of impacts caused by traditional oil and gas

development and CBM development can be found under the “Management Common to

All Alternatives” section in Chapter 4 of the 2003 FEIS (indicating the “direct and

indirect impacts of road construction and use on wildlife and wildlife habitat have been

well documented for oil and gas projects and other natural resource developments . . . the

types of impacts expected to result from oil and gas development would be similar to

those described in detail under Alternative A for [coal bed methane] development.”).

The impacts discussed for Alternative A include: “direct habitat loss and direct and

indirect impacts because of habitat disruption and wildlife disturbance caused by roads,

pipelines, and utility corridors would cause the bulk of impacts on wildlife” and that

“grouse are particularly susceptible to collision mortality (from cars) during the spring

because they often fly to and from leks near the ground.” The analysis also includes a

table outlining the anticipated impacts on sage and sharp-tailed grouse of three types of

direct impact, and nine types of indirect impact. Moreover, the chapter devotes an entire

page to a discussion highlighting that “sage grouse are extremely sensitive to human

disturbance and habitat alteration.”

A. “Tiering”

¶38 “Tiering is the process of incorporating by reference coverage of general matters

in broader environmental impact statements, such as national program or policy

statements, into subsequent narrower environmental analyses, such as site-specific

22
statements.” N. Plains Res. Council, Inc. v. Surface Transp. Bd., 668 F.3d 1067, 1088

(9th Cir. 2011); 40 C.F.R. § 1508.28.

¶39 The parties agree that the EAs in question do not explicitly reference the 1989

PEIS or 2003 FEIS. Richmond indicated in his affidavit to the District Court that the

checklist EAs at issue in this lawsuit were tiered to the 2003 PEIS and that the MEPA

review conducted in connection with the 2003 FEIS is implicitly incorporated into the

checklist EAs. He admitted, however, that it was a “big oversight” that the EAs did not

explicitly state they were tiered to the 1989 PEIS or specifically reference the 2003 FEIS.

¶40 Federations argue that the EAs did not tier to the previous analyses because there

is no mention of the 1989 or 2003 reviews in the EAs, that the documents are not on the

same issue, and that reliance on the 1989 review is suspect because it was conducted

before the vast majority of the scholarly work discussing the impacts on sage grouse by

oil and gas development was completed. Federations cite S. Or. Citizens v. Clark, 720

F.2d 1475, 1480 (9th Cir. 1983), for the proposition that agencies have a continuing duty

to evaluate new information when tiering to an EIS that is more than five years old. They

also argue that documentation of tiering must appear in the document being tiered from,

citing Village of False Pass v. Watt, 565 F. Supp. 1123, 1141 (D. Alaska 1983) (“The

adequacy of the environmental impact statement itself is to be judged solely by the

information contained in that document. Documents not incorporated in the (EIS) by

reference or contained in a supplemental (EIS) cannot be used to bolster an inadequate

discussion in the (EIS).”), aff’d 733 F.2d 605 (9th Cir. 1984). The court in Village of

23
False Pass proceeded to state that while an administrative record cannot be used to

remedy a deficiency in an EIS, a court may look at information in the administrative

record and take additional evidence to determine whether the scope of discussion in the

EIS was adequate. 565 F. Supp. at 1141.

¶41 The quotation cited by Federations is not in a section of the Village of False Pass

opinion discussing tiering. Instead, the section cited pertains to the adequacy of an

environmental impact statement and what a court may consider in determining whether

an EIS is deficient. Moreover, an EA has been described by federal courts as a

“rough-cut, low-budget environmental impact statement.” Sierra Club Northstar

Chapter v. Bosworth, 428 F. Supp. 2d 942, 957 (D. Minn. 2006) (quoting Cronin v. U.S.

Dept. of Agriculture, 919 F.2d 439, 443 (7th Cir. 1990). To the extent an EIS is judged

solely by the information it contains and its references to other documents from which it

is tiered—a question not presented in this case—an EA does not have the same

requirements as an EIS.

¶42 Despite the checklists’ lack of explicit reference, it is clear from the record that

MBOGC staff relied on these past reviews in developing the EAs at issue here. The

administrative record lodged with the District Court by agreement of the parties included

the 1989 PEIS and 2003 FEIS. Under the 1989 PEIS, MBOGC was required to evaluate

current information and entitled to rely on FWP in assessing wildlife impacts. MBOGC

fulfilled this obligation by conferring with the FWP wildlife biologist, utilizing the

Heritage Tracker database, and reviewing topographic maps for designated wildlife

24
refuges, national grass lands, national parks, or other designated wildlife areas.

Undoubtedly, an EA should make specific reference to MEPA documents from which it

is tiered so that members of the public, not just the Board and others involved in the

process, are made aware of the information utilized by MBOGC in issuing permits.

Nonetheless, remand for the sole purpose of requiring MBOGC to explicitly incorporate

by reference its prior EISs would accomplish little “save further expense and delay.”

Nevada v. DOE, 457 F.3d 78, 90 (D.C. Cir. 2006). Applying the standards of review

governing MBOGC and MEPA determinations, particularly in light of the stipulated

administrative record before the District Court, we conclude the agency implicitly tiered

the EAs to the older analyses and that its failure to articulate reference to them did not

render its actions arbitrary, capricious or unlawful.

B. MBOGC’s compliance with MEPA’s requirements.

¶43 The purpose underscoring MEPA is to “declare a state policy that will encourage

productive and enjoyable harmony between humans and their environment.” Section 75-

1-102(2), MCA. MEPA requires that an agency take a “hard look” at the environmental

impacts of a given project or proposal. Ravalli County Fish & Game Assn., 273 Mont. at

377, 903 P.2d at 1367 (agencies have the obligation “to make an adequate compilation of

relevant information, to analyze it reasonably,” and to consider all “pertinent data.”).

However, “court review of an agency decision . . . is limited . . . [and the Court] does not

take a hard look itself but requires that the agency does so. The Court focuses on the

validity and appropriateness of the administrative decision making process without

25
intense scrutiny of the decision itself.” Clark Fork Coalition v. Mont. Dept. of Envtl.

Quality, 2008 MT 407, ¶ 47, 347 Mont. 197, 197 P.3d 482. “The agency must examine

the relevant data and articulate a satisfactory explanation for its action, including a

rational connection between the facts found and the choice made.” Clark Fork Coalition,

¶ 47. Courts have held that “general statements about ‘possible’ effects and the existence

of ‘some risk’ do not constitute a ‘hard look’ absent a justification regarding why more

definitive information could not be provided.” Neighbors of Cuddy Mt. v. USFS, 137

F.3d 1372, 1380 (9th Cir. 1998) (quoting Inland Empire Pub. Lands Council v. U.S.

Forest Serv., 88 F.3d 754, 764 (9th Cir. 1996).

¶44 The general requirements of the environmental review process under MEPA and

the means in which an agency determines the necessary level of environmental review

are contained in Admin. R. M. 36.2.523. A detailed environmental impact statement is

required for a “major action of state government significantly affecting the quality of the

human environment.” Admin. R. M. 36.2.523(1)(b). An environmental assessment

operates, in part, as an initial evaluation to determine whether an agency must prepare an

environmental impact statement. Admin. R. M. 36.2.522(9). An EA may be in checklist

form when the agency determines a routine action with limited environmental impact is

at stake. Admin. R. M. 36.2.525(2).

¶45 In determining the significance of the impacts associated with state action, and

what type of assessment is necessary, the state agency must evaluate the individual and

cumulative impacts. Admin. R. M. 36.2.524(1). An EA must include an evaluation of

26
cumulative and secondary impacts. Admin. R. M. 36.2.525(3)(d). We review whether

the agency performed an evaluation of cumulative impacts in determining whether its

compliance with MEPA was lawful. N. Fork Preservation Assn., 238 Mont. at 460, 778

P.2d at 868. An analysis of “cumulative impacts” means reviewing:

the collective impacts on the human environment of the proposed action
when considered in conjunction with other past and present actions related
to the proposed action by location or generic type. Related future actions
must also be considered when these actions are under concurrent
consideration by any state agency through pre-impact statement studies,
separate impact statement evaluation, or permit processing procedures.

Admin. R. M. 36.2.522 (emphases added).

¶46 Federations argue that the twenty-three EAs at issue are virtually identical and

contain no evaluation of the potential impacts to wildlife, in particular, sage grouse.

They further argue the 1989 PEIS and 2003 FEIS both contemplate the need for further

site specific analysis, which did not occur here. Federations point to the two EAs

prepared by the DNRC as an example of an EA appropriately acknowledging the

presence of and risk to sage grouse on the well sites at issue. They argue “the fact that

MBOGC’s parent agency identified sage grouse leks within a mile of wells 2253 and

2256, and MBOGC failed to identify these same leks when it evaluated the same wells

under the same MEPA standard demonstrates the patent inadequacy of MBOGC’s

environmental review.” Federations argue the checklist utilized by MBOGC did not

address cumulative effects because it ignored the other twenty-three wells being

concurrently permitted in the same area, and that its overall assessment did not amount to

a “hard look” at the impacts of the wells.
27
¶47 In response, MBOGC emphasizes Sasaki’s affidavit, which observes that the EA

checklist form requires consideration of the circumstances of each well and its

cumulative effect, if any. Sasaki noted in the cumulative effects section of the EAs that

the wells are being drilled in “an existing gas field.” He testified by affidavit that each

EA was completed individually, and pointed out that the forms contain distinct responses

where differences exist. Sasaki determined that because of the hundreds of existing wells

in the immediate area and their associated infrastructure, the addition of these

twenty-three wells would not create new human access to wildlife habitat. He pointed

out that, in contrast to State-owned land, the MBOGC has no authority to impose surface

restrictions upon wells drilled on private land. Sasaki also determined that the

twenty-three wells would not lead to further cumulative impacts from oil and gas drilling

in the CCA.

¶48 In both the EISs, the agency addressed cumulative impacts. The draft 1989 PEIS

includes a six-paragraph discussion under the sub-heading “cumulative impacts.” The

section identified the cumulative impacts of oil and gas drilling when coupled with other

resource extraction, such as logging, mining, hydroelectric development, and livestock

grazing. The final 1989 PEIS includes a summary of potential impacts to wildlife and

fisheries, noting specifically that “[t]he likelihood of an adverse impact occurring in any

particular location depends on the intensity of oil and gas activity, including length of

time that operations occur, sensitivity of the environment, cumulative disturbance that a

wildlife species has been subjected to previously, and implementation of mitigation

28
measures.” Moreover, the final 1989 PEIS concludes that the situation where “major

adverse environmental effects are most likely is when a wildcat drilling operation leads to

discovery of a commercially producible oil or gas reservoir and full-field production

commences in a previously undeveloped area.” In the 2003 FEIS, the “Reasonably

Foreseeable Development Scenario” analyzed the combined exploration and development

of coal bed methane and of conventional oil and gas development in various counties.

Additionally, cumulative impacts (including the impact of conventional oil and gas

development) are also analyzed in Chapter 4’s discussion on wildlife.

¶49 We agree with Federations that the simple fact that these twenty-three wells are

infill wells in an existing field does not automatically insulate them from a cumulative

impacts analysis. We conclude, however, that the Board did not ignore cumulative

impacts in its assessment of the wells authorized in this case. The agency completed the

EAs here on the basis of an extensive administrative record and an institutional body of

knowledge upon which MBOGC staff determined the additional wells at issue would

have no significant impact, individually or cumulatively. As we noted earlier, the wells

at issue are a minor fraction of the over a thousand wells in the Cedar Creek Gas Field.

Infill development may prompt the need for further analysis if the characteristics of the

location suggest the addition of new wells will increase “the collective impacts to the

human environment.” However, on the record of this case—given the few number of

well permits still in play, their minimal addition to an already significantly developed

field, and the absence of indicators that sensitive habitat was involved, we hold that the

29
EAs’ silence regarding other specific well applications under consideration did not render

them unlawful under Admin. R. M. 36.2.525 for failure to sufficiently assess cumulative

impacts.

¶50 The Dissent makes an important point which, under a different set of facts, would

be compelling. Even a checklist EA should provide sufficient environmental information

for informed public scrutiny before decisions are made. Federations’ argument in this

case, however, is that the MBOGC’s “decisions approving each of the 23 wells should be

set aside” as arbitrary and capricious because its determination of no cumulative impacts

was “made without making any analysis at all.” As Federations point out, we have

recognized that the omission of a cumulative impacts analysis is relevant to determining

whether an agency’s MEPA decision is “unlawful.” Friends of the Wild Swan v. DNRC,

301 Mont. 1, ¶ 29, 6 P.3d 972 (2000). In that case, however, as Federations

acknowledge, the district court had enjoined the agency from moving forward pending

completion of the cumulative impacts analysis, and we upheld that injunction on appeal.

Here, since no stay was sought or obtained, we did not have an opportunity to rule before

the agency’s decision took effect; thus, the question now is limited to a much smaller

number of wells. Further, as discussed above, and not disputed by the Dissent, our

examination of the sufficiency of the MBOGC’s “hard look” under the applicable statute

is to be made on the entire record before the District Court. Section 82-11-144, MCA.

On that record, and in light of the present posture of the case, we conclude that the

agency’s evaluation of cumulative effects was adequate. Federations have not

30
demonstrated that adding the three to six remaining wells under consideration to the

existing Cedar Creek Gas Field, particularly in light of DNRC restrictions on the two

wells on State-owned land, would raise the potential for cumulative impacts sufficient to

trigger additional environmental analysis. 1 Fidelity’s counsel acknowledged during oral

argument that, had sage grouse been listed as a threatened or endangered species,

significant additional analysis would have been required. We trust that MBOGC will

consider the recent pronouncements by the U.S. Fish and Wildlife Service in its future

permitting decisions.

¶51 We affirm the District Court’s conclusion that the MBOGC took a sufficient “hard

look” under MEPA. Sasaki relied on the information in the 1989 PEIS and 2003 FEIS,

his communications with FWP, his review of the Heritage Tracker database, and his

analysis of topographic maps of the area. In his affidavit to the District Court, Sasaki

rationally explained these steps, and the facts upon which he relied, to come to the

conclusion that the additional wells would not lead to further cumulative impacts. He

also relied on his own knowledge of the area, having previously prepared 325 EAs for the

Cedar Creek Gas Field and conducted multiple site visits. The administrative record

contains hundreds of pages of documentation of the Board’s analysis of gas well drilling

in the area in question over many years. The compilation of data from the two major

environmental studies in 1989 and 2003, along with other Board documentation and

1
Even under the Ninth Circuit’s relatively low standard of proof, a plaintiff alleging that an
agency should have analyzed the cumulative impacts of a proposed project along with other
projects must show “the potential for cumulative impact.” Te-Moak Tribe of Western Shoshone
of Nev. v. U.S. DOI, 608 F.3d 592, 605 (9th Cir. 2010).
31
scientific literature, coupled with the institutionalized knowledge of MBOGC staff,

provides an extensive information base upon which the Board could draw in concluding

that the addition of twenty-three wells in a heavily-developed field would have limited

impact. Our role is not to say whether the Court would have granted the permits in this

instance. N. Fork Preservation Assn., 238 Mont. at 465, 778 P.2d at 871. Rather, we

must determine if the MBOGC was sufficiently thorough and discerning in its

decision-making process to meet applicable MEPA requirements. We conclude it was.

¶52 3. Whether the District Court erred in ruling that MBOGC did not have to
prepare a programmatic environmental impact statement for oil and gas development in
the Cedar Creek Anticline area.

¶53 A “programmatic review” is “an analysis (EIS or EA) of the impacts on the quality

of the human environment of related actions, programs, or policies.” Admin. R. M.

36.2.522(15). As noted above, an EIS is required for “major actions of state government

significantly affecting the quality of the human environment.” Section 75-1-

201(1)(b)(iv), MCA. An “action” is defined in part as “a project or activity involving the

issuance of a lease, permit, license, certificate or other entitlement.” Admin. R. M.

36.2.522(1). An EIS is not required if an agency, after evaluating the factors in Admin.

R. M. 36.2.524(1), determines that the adverse effects are not significant. Those factors

are:

(a) the severity, duration, geographic extent, and frequency of occurrence of
the impact;
(b) the probability that the impact will occur if the proposed action occurs;
or conversely, reasonable assurance in keeping with the potential severity
of an impact that the impact will not occur;

32
 (c) growth-inducing or growth-inhibiting aspects of the impact, including
the relationship or contribution of the impact to cumulative impacts;
(d) the quantity and quality of each environmental resource or value that
would be affected, including the uniqueness and fragility of those resources
or values;
(e) the importance to the state and to society of each environmental
resource or value that would be affected;
(f) any precedent that would be set as a result of an impact of the proposed
action that would commit the department to future actions with significant
impacts or a decision in principle about such future actions; and
(g) potential conflict with local, state, or federal laws, requirements, or
formal plans.

Admin. R. M. 36.2.524. An EA is highly specific to the project and locale, “thus creating

no binding precedent.” Barnes v. U.S. Dept. of Trans., 655 F.3d 1124, 1140 (9th Cir.

2011).

¶54 Environmental review under NEPA (and therefore MEPA) is not retroactive.

Activity existing prior to enactment of the law and not potentially undergoing “further

major [] action” does not require an EIS. Westside Property Owners v. Schlesinger, 597

F.2d 1214, 1223-24 (9th Cir. 1979). “If an ongoing project undergoes changes which

themselves amount to ‘major [state] actions,’ the operating agency must prepare an EIS.”

Ravalli County Fish & Game Assn., 273 Mont. at 378-79, 903 P.2d at 1367 (quoting

Upper Snake R. Chapter of Trout Unlimited v. Hodel, 921 F.2d 232, 234 (9th Cir. 1990)).

Where a proposed action would not change the status quo, the MEPA review process is

not triggered. Ravalli County Fish & Game Assn., 273 Mont. at 378-79, 903 P.2d at

1367; Upper Snake R. Chapter of Trout Unlimited, 921 F.2d at 235. “An EIS need not

discuss the environmental effects of continuing to use land in the manner in which it is

presently being used.” Sabine R. Authority v. U.S. Dept. of Interior, 951 F.2d 669, 679
33
(5th Cir. 1992) (citing Upper Snake R. Chapter of Trout Unlimited, 921 F.2d at 235)

(holding that an agency’s acquisition of an easement did not effectuate any change to the

environment that would trigger an EIS).

¶55 If the changes are “substantial enough to constitute a ‘major federal [or state]

action’” or have the potential to significantly affect the quality of the human

environment, then MEPA—like NEPA—requires the agency to evaluate those changes

for significant impacts. Compare Westside Property Owners, 597 F.2d at 1223

(post-NEPA agreement for military training exercises not a “major federal action” in light

of longstanding approval of design for training program) with Ravalli County Fish &

Game Assn., 273 Mont. at 379-80, 903 P.2d at 1368 (change in grazing permit from

grazing cattle to grazing sheep adjacent to bighorn range did not constitute maintaining

the status quo and further MEPA analysis was triggered).

¶56 In 2003, the MBOGC issued an order granting Fidelity’s application to increase

well density in the CCA. Though it might have been an opportune time to do so,

Federations did not seek a programmatic EIS when that order was issued.

¶57 Richmond explained in a letter to NWF in 2008, submitted by Federations as an

exhibit to their motion for summary judgment, that the order authorizing increased well

density was issued as a means to address inequities between adjoining landowners. He

explained that its effect was both to serve as a determination that the well spacing did not

constitute waste by promoting unnecessary wells and to promote conservation by

maximizing the recovery of existing gas resources. Richmond advised that it was

34
unlikely the number of wells authorized by the Board Order “will be drilled

immediately.” He noted that the average five-year net increase in producing gas wells for

the Montana portion of the Williston Basin is seventy-one new wells per year. Through

the affidavit of Bruce Bowman, Fidelity confirmed in the District Court that it anticipated

drilling approximately 40-100 wells per year in 2009 and 2010.

¶58 At the time the permits were issued in this case, much of the infrastructure already

was in place with only minor improvements needed. Fidelity employee Dennis Zander

described in his affidavit to the court Fidelity’s attempt to minimize the impact of the gas

wells at issue. Noting Gore’s concerns that eight of the wells could adversely impact

sage grouse, Zander explained that “the infrastructure Fidelity will install with respect to

these eight wells is minimal.” Zander provided specific comments about the limited

impacts of the wells, including their virtually silent operation and Fidelity’s ability to

access the wells’ electronic metering equipment remotely. Once a well is completed,

there is little vehicular traffic associated with its operation, with most wells being

accessed by vehicle less than once a week. He stated that this method of production

operations has been commended by BLM biologists for minimizing noise that might

impact sage grouse.

¶59 Despite the Board’s finding of no significant impacts, Federations contend that the

MBOGC must perform a programmatic review of ongoing oil and gas development in the

CCA, pointing to Fidelity’s anticipated drilling in the future. They further argue that the

1989 PEIS was not a programmatic review, but rather a “framework” for the agency’s

35
future performance of MEPA reviews and that further area-specific review was

contemplated by the agency and is necessary. Appellees argue that the addition of

twenty-three wells (now six or fewer), is not a “major state action” requiring a

programmatic review and that speculation about future drilling does not provide a basis

for mandating an EIS in this case.

¶60 We conclude that the Board was not arbitrary or capricious in its determination

that drilling twenty-three wells in an existing field of over a thousand, with most of the

necessary infrastructure already in place and minimal anticipated impacts, was not a

major state action necessitating a programmatic EIS. Incremental infill well development

on the field may necessitate an EIS if, at some point, such development meets the factors

discussed in Admin. R. M. 36.2.524. Our holding here does not preclude the requirement

for an EIS at a future date. Barnes, 655 F.3d at 1140. On this record, Federations have

not met their burden of demonstrating that MBOGC’s decision was arbitrary, capricious,

unlawful, or unwarranted by the facts.

CONCLUSION

¶61 The District Court properly applied § 82-11-144, MCA, in considering evidence

outside the administrative record. We caution MBOGC that its use of the checklist EA

form, while permissible under the law and under the 1989 EIS, should contain sufficient

explanation to provide the public and a reviewing court with a clear statement of reasons

to explain why a project’s impacts are not significant. On the basis of the record

developed in the District Court, however, we conclude that MBOGC complied with

36
MEPA in issuing permits for the wells at issue. Under the specific facts existing at the

time these permits were issued, Federations did not demonstrate the need for further

cumulative impacts analysis or for a programmatic EIS as to oil and gas development in

the CCA. The District Court’s grant of summary judgment in favor of Appellees is

affirmed.

/S/ BETH BAKER

We concur:

/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ JIM RICE

/S/ JAMES B. WHEELIS
Hon. James B. Wheelis, District Judge
Sitting in place of Justice Nelson

Justice Michael E Wheat dissents.

¶62 I respectfully dissent.

¶63 The majority correctly notes that an EA may be in a checklist format. Opinion,

¶ 44. A checklist EA, however, must still comply with the requirements of MEPA. This

37
includes an analysis of the cumulative and secondary impacts. Opinion, ¶ 45. The

majority concludes, based on the “extensive administrative record and [the] institutional

body of knowledge” within the MBOGC, that the MBOGC did not ignore cumulative

impacts in its assessment of the wells at issue. Opinion, ¶ 49. This conclusion, however,

ignores the unambiguous intent of the Legislature and the very purpose of requiring an

environmental assessment. MEPA is procedural, but it was the intent of the Legislature

that MEPA would provide an adequate review of state actions to ensure that “the public

is informed of the anticipated impacts in Montana of potential state actions.” Section 75-

1-102(b), MCA. The Legislature additionally made it clear that the unequivocal purpose

of requiring an environmental assessment is to “inform the public and public officials of

potential impacts resulting from decisions made by state agencies.” Section 75-1-

102(3)(a); See State ex. rel. Mont. Wilderness Assn. v. Board of Nat. Resources &

Conservation, 200 Mont. 11, 30, 648 P.2d 734, 744 (1982) (“The primary function of the

EIS is to provide the decisionmaker with environmental reports sufficiently detailed to

allow a knowledgeable judgment and to allow public feedback in the development of that

information.”)

¶64 The public is not informed when an agency’s decision-making process is

concealed within the confines of its institutional knowledge, and the only way to uncover

the details is by engaging in lengthy litigation. Nor is the public benefitted by reviewing

an EA which does not explicitly set forth the actual cumulative impacts and the facts

which form the basis of the analysis. See Friends of Wild Swan v. Dept. of Nat.

38
Resources & Conservation, 2000 MT 209, ¶ 35, 301 Mont. 1, 6 P.3d 972. Because the

public has been left in the dark, I would reverse the District Court and find that the

MBOGC’s EAs are inadequate.

¶65 I believe that the EAs are inadequate because they contain only generalized

conclusory statements in the form of expert narratives – or as the majority calls it,

“institutional knowledge.” Each of the twenty-three EAs devotes a single line to

“Evaluation of Impacts and Cumulative effects.” The “answer” to this question is some

variation on the statement: “No long term impacts expected. Short term impacts will

occur but can be mitigated in time.” This explanation is inadequate because it provides

no information to the public, thereby undermining the purpose of MEPA and preventing

any meaningful public participation.

¶66 Moreover, the EAs are not properly tiered to the 1989 PEIS and the 2003 FEIS.

Tiering is not defined in MEPA or its associated administrative rules. It is, however,

defined in NEPA’s regulations:

“Tiering” refers to the coverage of general matters in broader
environmental impact statements (such as national program or policy
statements) with subsequent narrower statements or environmental analyses
(such as regional or basinwide program statements or ultimately site-
specific statements) incorporating by reference the general discussions and
concentrating solely on the issues specific to the statement subsequently
prepared.

40 C.F.R. § 1508.28 (2012) (emphasis added). The plain language under NEPA requires

the tiered document to be explicitly incorporated. This insures that the public is informed

of the documents underlying an agency decision.

39
¶67 Here, MBOGC admits that it failed to explicitly reference that the EAs were tiered

to the 1989 PEIS or the 2003 FEIS. Opinion, ¶ 39. The majority disregards this failure

and claims that it is “clear from the record that MBOGC staff relied on these past reviews

in developing the EAs at issue here.” Opinion, ¶ 42. MBOGC’s reliance on these

documents is appropriate, but it remains that the public was not informed of this reliance

at the time the EAs were published. Consequently, because the EAs were completely

devoid of any mention or reference to these EISs, they are inadequate.

¶68 Even if the agency did implicitly tier the EAs to the prior EISs, I would still find

the EAs inadequate because MBOGC’s failure to reference them in the EAs undermines

the purpose of MEPA. MEPA requires MBOGC to inform the public of not only the

documents it relies on, but also the specific information within the relied upon

documents. MBOGC did neither. As a result, the public remains uninformed and is

unable to meaningfully participate in the MEPA process.

¶69 The actions of the MBOGC are not only improper, but they undermine MEPA.

Given that MEPA is a procedural statute, I cannot condone the EAs at issue because they

are not in compliance with MEPA’s plainly articulated procedures. The cumulative

impacts and any tiered documents should have been clearly set forth to ensure an

informed public. Instead, the MBOGC’s failure to comply with MEPA has forced the

public to engage in time consuming and costly litigation. I believe that the public should

not be forced to rely on litigation to uncover information that rightly should have been

disclosed in the EAs.

40
¶70 For these reasons, I would find that the EAs at issue are unlawful. See N. Fork

Preservation Assn., 238 Mont. 451, 460-64, 778 P.2d 862, 868-70 (1989). I would

therefore reverse the District Court’s grant of summary judgment and remand this case

for entry of judgment in favor of the Federations.

/S/ MICHAEL E WHEAT

Justice Brian Morris joins in the foregoing dissent.

/S/ BRIAN MORRIS

41