White House releases report on Minerals Management Service's offshore permitting policies

The White House Council on Environmental Quality (“CEQ”) released a report which reviewed the permitting policies of the federal agency responsible for oil and gas offshore leases.

Under the National Environmental Policy Act (“NEPA”), all federal agencies must consider the environmental impacts of their proposed actions, and follow NEPA implementation Regulations created by the CEQ.

NEPA procedures may include:

  1. An Environmental Assessment (“EA”) to determine whether an Environmental Impact Statement is necessary;
  2. An Environmental Impact Statement (“EIS”) for proposed actions that may create significant environmental impacts; or
  3. A Categorical Exclusion (“CE“) for activities that are determined through a public process not to raise environmental issues or concerns which would require analysis in an EA or an EIS.

The CEQ’s NEPA Regulations allows agencies to “tier” their analyses by “incorporating by reference” information, findings, and recommendations from existing studies into subsequent NEPA analyses and documents.

The Minerals Management Service, recently renamed the Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEM”), relies on “tiering” in the approval of offshore drilling Exploration Plans.

The Minerals Management Service uses the analysis performed at the leasing program level to carry the information forward to the individual lease-level. Since the Deepwater Horizon incident, the CEQ report now recommends that the BOEM refrain from tiering in a way that limits site-specific analysis, “despite the availability of major, prior environmental reviews and studies.”

The CEQ report also recommends the BOEM review the use of CEs for offshore Exploration Plans. Establishing a CE requires that a categorized action has neither individual nor cumulative significant effects on the environment, and that there are no extraordinary circumstances which would preclude the use of a CE.

Going forward, the BOEM will review its interpretation of the threshold requirement for “extraordinary circumstances,” which will likely lead to an increase in the number of leases that are subject to additional environmental reviews prior to approval.

To accommodate the increase in EAs and EISs, the CEQ also seeks to amend the Outer Continental Shield Lands Act to provide more time for the BOEM to conduct environmental reviews. Currently, the BOEM must make its decision whether to approve a submitted Exploration Plan within 30 days.

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