Pennaco Energy, Inc. v. U.S. Department of the Interior 377 F.3d 1147 (10th Cir. 2004) The Bureau of Land Management (BLM) held an auction for some leases to drill for oil and gas on Federal lands in Wyoming. Pennaco won the bid and got the lease. Before the auction was held, BLM issued an Environmental Impact Statement (EIS) that talked in general about oil and gas leasing on the lands, but it didn't talk specifically about "coal bed methane" (CBM) mining, which was the kind of mining Pennaco wanted to do. After the auction occurred BLM issued a second EIS that examined CBM mining. CBM mining creates a number of environmental issues that don't occur with other forms of mining. The Interior Board of Land Appeals (IBLA) reversed BLM's decision to grant the lease. Pennaco sued. IBLA found that the requirements of the by National Environmental Policy Act (NEPA) had not been satisfied by BLM prior to holding the auction. IBLA found that the first EIS was not sufficient because it didn't consider CBM mining. IBLA found the second EIS insufficient because it was done after the decision to grant the leases had occurred, so it couldn't seriously consider whether granting the leases was a good idea in the first place. IBLA found that BLM needed to go back and take a "hard look" at the environmental impacts of CBM mining. Only then could they decide whether or not to auction the land. The Trial Court reversed. BLM appealed. The Trial Court found that IBLA's decision was arbitrary and capricious. The Appellate Court reversed the Trial Court and affirmed IBLA's decision to deny the lease. The Appellate Court found that CBM poses unique environmental threats that had not been seriously considered by either of the EISs. That's a violation of NEPA. The Court noted that IBLA didn't say that Pennaco couldn't do CBM mining, just that NEPA has procedural requirements that had not been met. Until those were met, BLM could not grant a lease. BLM unsuccessfully argued that they until they held the auction, they didn't know if anyone would be interested in doing CBM mining. So there was no reason to put CBM mining into the EIS before the lease occurred. What is the right time to write an EIS? Four possibilities: Planning Stage, Leasing Stage, Exploration by Lessee Stage, Drilling/Mining Stage. As this case illustrates, you want to write the EIS early enough to be able to halt the process if need be, but if you write it too early, there aren't enough specifics available to write an effective EIS. How do you strike a balance?