CEQ Announces Expansion of NEPA Review for Oil and Gas Drilling

On August 16, 2010, the White House Council on Environmental Quality (CEQ) released a report on the National Environmental Policy Act (NEPA) procedures for environmental reviews conducted by the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEM), the successor agency to the Minerals Management Service (MMS).  BOEM is the bureau in the Department of the Interior that regulates oil and gas exploration and production activities in the outer continental shelf (OCS).  Predictably, CEQ is recommending that BOEM undertake more extensive NEPA reviews before issuing permits.

As previously discussed on Akin Gump’s climate change blog, ClimateIntel.com, the Obama administration’s initiatives to “reinvigorate” NEPA have resulted in unnecessary and redundant obstacles to project development.  In analyzing CEQ’s “Draft NEPA Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions,” issued February 18, 2010, in which the Council expressed the view that NEPA requirements apply to GHGs and climate change impacts, ClimateIntel recommended that CEQ promulgate categorical exclusions and seek necessary amendments to the statute to minimize redundancies in the modern environmental regulatory system.

In the August 16 report , CEQ does precisely the opposite.  Under the guise of “promot[ing] more robust and transparent implementation of NEPA practices, procedures and policies,” the administration announced a ban on the use of “categorical exemptions” for deepwater drilling activities.  The administration also announced that shallow water drilling activities would be subject to enhanced environmental review.  While the current moratorium on deepwater drilling renders these actions “academic,” as the moratorium is lifted, the oil and gas industry will face increased costs and further delays in obtaining regulatory approvals.

CEQ’s recommendations include the following—

• perform careful and comprehensive NEPA review of individual deepwater exploration activities, including site-specific information where appropriate 
• track and take into account all mitigation commitments made in NEPA and decision documents that are used to determine the significance of environmental impacts, from the initial Programmatic EIS through site-specific NEPA analyses and decisions 
• ensure that NEPA analyses fully inform and align with substantive decisions at all relevant decision points; that subsequent analyses accurately reflect and carry forward relevant underlying data; and that those analyses be fully available to the public
• ensure that NEPA documents provide decision makers with a robust analysis of reasonably foreseeable impacts, including an analysis of reasonably foreseeable impacts associated with low probability catastrophic spills for oil and gas activities on the Outer Continental Shelf
• review the use of categorical exclusions for OCS oil and gas exploration and development in light of the increasing levels of complexity and risk—as well as the consequent potential environmental impacts – associated with deepwater drilling; determine whether to revise these categorical exclusions 
• continue to seek amendments to the Outer Continental Shelf Lands Act to eliminate the 30-day decisional timeframe for approval of submitted exploration plans 
• evaluate supplementing existing NEPA practices, procedures and analyses to reflect changed assumptions and environmental conditions, due to circumstances surrounding the BP oil spill.

Since Congress passed NEPA in 1969, it has enacted numerous statutes and regulatory programs that provided comprehensive systems for controlling pollution and, in some cases, compensating those harmed by the pollution.  These statutes included—

• The Comprehensive Environmental Response Compensation and Liability Act of 1980
• The Endangered Species Act
• The Surface Mining Control and Reclamation Act
• The Oil Pollution Act
• The Federal Land Policy and Management Act
• The Marine Mammal Protection Act
• The Coastal Zone Management Act.

Many other laws, like the Clean Air Act, the Resource Conservation and Recovery Act and the Clean Water Act, were on the books, but were mere shells of their current form.  For example, in 1969, the CWA did not yet have a permitting program establishing effluent limits.  At that time, a general requirement that federal agencies consider environmental values when undertaking major regulatory actions filled an important gap in the country’s regulatory structure.  Today, that requirement makes no sense in the vast majority of instances where more specific legislation requires the agencies apply specific criteria before taking actions such as issuing oil and gas drilling permits.