2010-13111. Review of MMS NEPA Policies, Practices, and Procedures for OCS Oil and Gas Exploration and Development

AGENCY:

Council on Environmental Quality.

ACTION:

Notice of Review and Request for Public Comment.

SUMMARY:

On May 17, 2010, the Council on Environmental Quality (CEQ) informed the Department of the Interior (DOI) that CEQ was conducting a 30 day review National Environmental Policy Act (NEPA) policies, practices, and procedures for the Minerals Management Service (MMS) decisions for Outer Continental Shelf (OCS) oil and gas exploration and development.

This review of MMS NEPA policies, practices and procedures is being conducted as a result of the oil spill from the Deepwater Horizon well and drilling rig in the Gulf of Mexico. The purpose of this review is to ascertain how MMS applies NEPA in its management of Outer Continental Shelf oil and gas exploration and development and make recommendations for revisions. The scope of the review is intended to be holistic, i.e. from leasing decisions to drilling and production.

In line with CEQ's effort to engage the public in the NEPA process and the President's Open Government Initiative, this notice is also a solicitation for public comment on the review process undertaken by CEQ as well as on current MMS NEPA policies, practices, and procedures regarding Outer Continental Shelf oil and gas exploration and development. Public participation in this review effort will benefit this specific review process, the MMS NEPA implementation, CEQ's overall effectiveness in overseeing NEPA, and the environmental and social consequences of government activity.

DATES:

Comments should be submitted as soon as possible on the CEQ review, recognizing that the review is to be completed June 17, 2010.

ADDRESSES:

All relevant information related to MMS NEPA procedures and the review process is available at http://www.whitehouse.gov/​ceq/​initiatives/​nepa. Comments on the procedures and review should be submitted electronically at the above URL or to [e-mail] or in writing to Associate Director for NEPA Oversight, Council on Environmental Quality, 722 Jackson Place NW., Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT:

Horst Greczmiel, Associate Director for NEPA Oversight, Council on Environmental Quality, at [phone].

SUPPLEMENTARY INFORMATION:

NEPA and Offshore Drilling

Enacted in 1970, NEPA mandates that Federal agencies consider the environmental impacts of their proposed actions during all stages of decision making, from planning to implementation. NEPA is a fundamental decision-making tool used to harmonize our economic, environmental, and social aspirations and is a cornerstone of our Nation's efforts to protect the environment. NEPA applies to every stage of Federal decision making related to offshore oil and gas exploration and development. When an agency proposes an action, it must determine if the action has the potential to affect the quality of the human environment. Agencies then apply one of three levels of NEPA analysis. They may: Prepare an Environmental Impact Statement (EIS) when the agency projects the proposed action has the potential for significant environmental impacts; apply a Categorical Exclusion (CE) when the agency has previously established a CE based on its determination that proposed action falls within the categories of actions described in the CE which the agency has found do not typically result in individually or cumulatively significant environmental effects or impacts; or the agency prepares an Environmental Assessment (EA) to determine whether it can make a Finding of No Significant Impact or proceed to prepare an EIS.

Under the Outer Continental Shelf Lands Act, MMS has implemented a process for oil and gas development consisting of the following stages: (1) Preparing a nationwide 5-year oil and gas development program, (2) planning for and holding a specific lease sale, (3) approving a company's exploration plan, and (4) approving a company's development and production plan. MMS is required to apply NEPA during each of these stages, beginning with the initial planning of outer continental shelf leasing and ending with a decision on a specific well. The sequence of NEPA analyses is informed by the CEQ Regulations Implementing the Procedural Requirements of the National Environmental Policy Act, 40 CFR parts 1500-1508 available at http://ceq.hss.doe.gov/​ceq_​regulations/​regulations.html. Specifically, 40 CFR 1502.20, discusses “tiering,” a strategy used to avoid repetitive discussions of the same issues, and to prevent unnecessary duplication of work by reviewers, as the NEPA reviews progress from a broad program to a site specific action. In the case of the Gulf of Mexico leases, MMS prepared several tiered NEPA analyses (see NEPA environmental review documents available at http://www.mms.gov/​5-year/​2007-2012BackgroundDocs.htm and http://www.gomr.mms.gov/​homepg/​regulate/​environ/​nepa/​nepaprocess.html).

Environmental Impact Statements (EIS), the most intensive level of analysis, were prepared at two decision points. First, in April 2007, MMS prepared a broad “programmatic” EIS on the Outer Continental Shelf Oil and Gas Leasing Program for 2007-2012. Also, in April 2007, MMS prepared an EIS for the Gulf of Mexico OCS Oil and Gas Lease Sales in the Western and Central Planning Areas, the “multi-sale” EIS.

In October 2007, MMS completed another NEPA analysis, an Environmental Assessment (EA), under the multi-sale EIS, for Central Gulf of Mexico Lease Sale 206. This is the sale in which the lease was issued for the location that includes the Deepwater Horizon well. MMS previously approved BP's development operations based on a programmatic EA that MMS prepared in December 2002.

Finally, for the Deepwater Horizon well, MMS applied its existing Categorical Exclusion Review (CER) process prior to the decision to approve the Exploration Plan that included the drilling of the Deepwater Horizon well. The Categorical Exclusion used by MMS for Deepwater Horizon was established more than 20 years ago. Under section 11 of the Outer Continental Shelf Lands Act, 43 U.S.C. section 1340, MMS had 30 days to complete its environmental review and act on the application to permit drilling. The Administration, in its supplemental budget request sent to Congress on May 12, 2010, seeks to extend that 30-day timeline; however, this review will consider the existing statutory requirements applicable to MMS decisions for OCS oil and gas exploration and development.

The Role of CEQ in the NEPA Process

NEPA charges the Council on Environmental Quality (CEQ) with the authority and responsibility to guide Federal agencies on their implementation of the Act. In 1978, CEQ issued regulations implementing the procedural provisions of NEPA. These regulations apply to all Federal agencies and establish the basic framework for all NEPA analyses (available at http://ceq.hss.doe.gov/​ceq_​regulations/​regulations.html). The regulations require Federal agencies to establish their own NEPA implementing procedures (see 40 CFR 1507.3), and to ensure that they have the capacity, in terms of personnel and other resources, to comply with NEPA (see 40 CFR 1507.2).

CEQ periodically issues guidance and other documents, such as guides and handbooks for NEPA. CEQ also convenes meetings with Federal NEPA contacts to present CEQ's interpretation of NEPA requirements and focus on how agencies can improve their NEPA analyses and documents. Through case law, the Federal courts and the Supreme Court have established that the agencies can rely on CEQ's interpretation of, and guidance on, NEPA.

Agencies establish their own NEPA implementing procedures which tailor the CEQ requirements to a specific agency's authorities and decisionmaking processes. MMS must comply with the Department of the Interior NEPA regulations (available at http://www.doi.gov/​oepc/​nepafr.html) and the MMS NEPA implementing procedures found in the Department of the Interior's Director's Manual 516 at Chapter 15 (available at http://elips.doi.gov/​app_​DM/​act_​getfiles.cfm?​relnum=​3625). CEQ provides assistance when agency-specific procedures, such as these DOI and MMS NEPA implementing procedures, are developed. An agency's NEPA procedures are not official until CEQ reviews the proposed procedures and determines that they are in conformity with NEPA and the CEQ regulations. Any subsequent revisions or changes to the agency procedures are subject to the same oversight process with CEQ. Periodically, CEQ also reviews the agency's NEPA implementing regulations and procedures. CEQ does not review every application of a Categorical Exclusion, every agency project, or the NEPA review for every agency project. The CEQ review will review the NEPA analyses conducted for the Deepwater Horizon well as well as the overall NEPA process MMS uses for OCS oil and gas exploration and development.

Discussion of the Request for Public Comment

NEPA itself emphasizes public involvement in government actions affecting the environment by requiring that the environmental impacts or effects associated with proposed actions be assessed and publicly disclosed. NEPA is steeped in the principle that public accountability and oversight makes government more effective. Public access to and participation in specific agency NEPA actions illuminates areas where agency reviewers may have overlooked or misinterpreted portions of a submitted EIS or EA.

Public participation in this review process allows CEQ to similarly tap into the collective wisdom of industry, academia, state, local, and tribal governments, and the rest of the private sector. CEQ is soliciting comments, questions, and other input about a number of specific issues focused on the NEPA review of OCS oil and gas exploration and development:

1. What are substantive issues and at what level should they be analyzed in each of the tiered NEPA submissions, from National 5-Year Oil and Gas Program to an individual well permit?

2. Does this sequence of permitting stages (and associate NEPA submissions) allow for comprehensive evaluation of all relevant issues?

3. What have been past industry and agency experiences with the use of categorical exclusions for OCS oil and gas activities?

4. Has the use of the CER process been an effective tool for reducing unnecessary paperwork without compromising the robustness of the NEPA analysis for OCS oil and gas activities?

5. To what degree has public engagement been a part of MMS NEPA practice, particularly as it deals with categorical exclusions?

6. What resources are available in Federal, tribal, state, and local government agencies with a stake in OCS oil and gas exploration and development to participate in NEPA reviews?

In addition to input on the above issues, general comments and questions are also welcome. Information relevant to this MMS NEPA policy review can be found on the CEQ Web site at http://www.whitehouse.gov/​ceq/​initiatives/​nepa.

Public comments are requested as soon as possible in light of the June 17, 2010, deadline for the CEQ review.

Dated: May 25, 2010.

Nancy Sutley,

Chair, Council on Environmental Quality.