Oklahoma, to the Chief, Oil and Gas Section of the BLM, New Mexico, the Survey indicated that they were "deferring structural determinations on a number of lease applications. The reasons for the delay are nearby procedures or drilling wells that could result in KGS's being established." Exhibit C, Plaintiff's Complaint for Declaratory and Injunctive Relief ("Complaint"). The memorandum concluded by stating that a number of noncompetitive offers were being held in abeyance, including plaintiff's offers. Id.
On December 9, 1981, the Director of the Survey issued a memorandum extending the undefined KGS in the Giddings Field region into areas where plaintiff had submitted its noncompetitive offers for oil and gas leases. The Director determined that there was every reason to believe that the extended areas would be productive given the field studies and recent developments in oil production in the Giddings Field area.
Based on the December 9, 1981 undefined KGS extension of Giddings Field, the BLM rejected Angelina Holly's noncompetitive lease offers on February 3, 1982. The BLM stated that "all the lands in the offers are within an extension to the undefined known geologic structure of the Giddings Field. . . . Therefore, these lands are available for leasing only [for competitive leasing] under 43 C.F.R. 3120." Exhibit D, Complaint.
On February 22, 1982, pursuant to the applicable regulations, plaintiff gave notice of appeal from the BLM's decision rejecting the plaintiff's offers. Plaintiff timely filed its statement of reasons for the appeal with the Interior Board of Land Appeals ("IBLA") on March 8, 1982.
Finally, on January 27, 1983, the IBLA affirmed BLM's decision to reject plaintiff's offers. Angelina Holly Corporation, 70 IBLA 294 (1983).
The average time for processing noncompetitive over-the-counter oil and gas offers from September 1979 through February 1980 in the BLM's New Mexico State Office was approximately 19 months. The longest processing period for such an offer was 29 months, and the shortest period was 7 months. Affidavit of Jacqueline Morales, Oil and Gas Adjudicator, BLM, New Mexico State Office, Defendants' Motion for Summary Judgment. ("Morales Affidavit"). Mr. Davidson's offers were processed within 13 months of his applications and the Angelina Holly offers were processed within 24 months of its applications.
Conclusions of Law
Plaintiff attacks the Interior Department's ("Interior") final agency decision on two grounds: first, that it and the BLM misapplied the regulatory test for determining the existence of a KGS and second, that there was an abuse of administrative discretion by the BLM through inconsistent and discriminatory treatment of plaintiff by rejecting its noncompetitive lease applications while accepting another similarly situated offeror's applications who applied nearly six months before plaintiff.
The Court has the power to review agency determinations under chapter seven of the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 704, 706. Under section 706 of the APA, the Court may set aside an agency action only where it is shown to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C. § 706(2)(A). It is plain that the standard of review is a narrow one and that the Court cannot substitute its own judgment for that of the agency. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971). The Court further recognizes that there must be a judicial presumption favoring the validity of administrative action, particularly where the Congress has empowered the agency with considerable discretion. E.g., Wilderness Public Rights Fund v. Kleppe, 608 F.2d 1250, 1254 (9th Cir. 1979), cert. denied, 446 U.S. 982, 64 L. Ed. 2d 838, 100 S. Ct. 2962 (1980); Duesing v. Udall, 121 U.S. App. D.C. 370, 350 F.2d 748, 751 (D.C. Cir. 1965), cert. denied, 383 U.S. 912, 15 L. Ed. 2d 667, 86 S. Ct. 888 (1966). Finally, when an agency decision involves matters of scientific expertise, the Court must show great deference to those agency determinations. See Baltimore Gas and Electric Co. v. National Resources Defense Council, 462 U.S. 87, 103 S. Ct. 2246, 2256, 76 L. Ed. 2d 437 (1983) ("When examining . . . scientific determinations . . . a reviewing court must generally be at its most deferential.").
Plaintiff first challenges the Secretary's designation of certain parcels in the Giddings Field area to be within a KGS. Plaintiff argues that the BLM and the IBLA failed to follow their own regulations when they misapplied Interior's definition of a KGS to the tracts at issue and that the geological facts demonstrate that no KGS's are within said tracts.
The Court, however, does not agree. The Mineral Management Service ("MMS")
conducted a careful study of Giddings Field, which included an examination of all wells located near Federal acreage to determine the possible extent of the producing reservoirs. The study concluded that:
unless it can be shown by appellants that a producing oil or gas reservoir definitely does not exist under any part of a nearby Federal mineral tract, then it is the position of the Minerals Management Service that there is a reasonable probability that all of the Federal mineral tracts in this portion of the Giddings Field are underlain by the reservoir of a producing oil or gas field, and that all of the Federal mineral tracts are presumptively productive of oil or gas. Therefore, they should be leased competitively.