Report criticizes drilling exclusions

BLM misused fast-track provision in Wyo, elsewhere, GAO says
2009-09-17T00:00:00Z Report criticizes drilling exclusionsJEFF GEARINO - Southwest Wyoming bureau Casper Star-Tribune Online
September 17, 2009 12:00 am  • 

GREEN RIVER -- A just-completed congressional probe is critical of a Bush-era policy that bypassed painstaking environmental reviews for thousands of oil and gas drilling permits in Wyoming and across the West.

The new report by the Government Accountability Office -- the investigative arm of Congress -- recommends that lawmakers rework the "categorical exclusion" rule to curtail misuse of the provision.

The report didn't specifically call for the elimination of categorical exclusions from the Energy Policy Act of 2005. But House lawmakers are expected to discuss a bill in committee meetings today that would strike the section from the act.

Categorical exclusions allow the Bureau of Land Management to fast-track oil and gas activity on public lands where development is already occurring, effectively exempting drilling projects from thorough environmental review and public comment.

Critics of the rule contend the exclusions sidestep the process of considering the cumulative impacts of proposed oil and gas development. But industry officials believe the law was intended to limit redundant environmental analysis, and to limit environmental impacts by drilling on existing well sites.

The GAO report said the BLM's use of categorical exclusions during 2006-08 was frequently out of compliance, both with the law and the agency's own guidelines.

The report recommended the BLM take "immediate steps" to ensure the use of categorical exclusions is consistent with federal law. The GAO said the BLM should ensure compliance with "more oversight."

BLM field offices in Wyoming approved 2,462 categorical exclusions for drilling permits during the two years under review, the most of any state, according to the report.

Conservationists said Wednesday they were pleased with the findings.

"We have felt all along that excluding oil and gas development from (National Environmental Policy Act) oversight is a huge mistake," said Bruce Pendery, staff attorney for the Wyoming Outdoor Council.

"To exclude something that's as pervasive and significant as oil and gas development is in Wyoming from these kind of checks and balances oversight ... we have always thought was wrong," he said. "... If we start to exclude these projects from NEPA oversight, we'll miss out from having a 'big picture' understanding of the impacts of all this development."

But industry officials said the abuses of the categorical exclusion section outlined by the GAO report were minor and that actually more categorical exclusions should have been granted to energy companies that met the criteria.

Kathleen Sgamma, director of governmental affairs for the Independent Petroleum Association of Mountain States, said BLM managers at every level discouraged their use and did not follow the law as intended by Congress.

"If you actually look at the (report's) findings, the number of instances (of abuse) is very small where they found problems ... or the problems they found were kind of administrative, or just administrative errors," Sgamma said.

"IPAMS sees an abuse in the system not as the GAO characterized it ... but in the fact that the BLM has chosen not to grant categorical exclusions in many, many situations where (energy) companies have met all the criteria mandated by law," Sgamma said.

Five exclusions

The report released Wednesday morning detailed the results of the GAO's inquiry into the BLM's use of categorical exclusions during fiscal years 2006 through 2008.

The use of categorical exclusion stems from a provision in the Energy Policy Act of 2005. The act established five new categorical exclusions specifically for oil and gas development.

The rule met with criticism from Gov. Dave Freudenthal, sportsmen and conservationists in Wyoming, who contend the tool doesn't adequately protect big game habitat and migration corridors, particularly in southwest Wyoming.

The report said during the two years studied, the BLM approved more than 22,000 new oil and gas drilling permits across 20 states, largely in the mountain West.

The study showed that categorical exclusions were used to approve approximately 6,100 of the 22,000 applications for drilling permits, or about 28 percent.

BLM field offices used categorical exclusions for more than a quarter of their drilling permits, although the benefits of use varied widely across the field offices, according to the report.

The Pinedale; Farmington, N.M., and Vernal, Utah, field offices accounted for almost two-thirds of the categorical exclusions granted during the two years under review.

In Wyoming, the Pinedale field office granted 1,498 categorical exclusions from 2006 to 2008, the most in the nation.

Additionally, the Buffalo field office granted 382 exclusions during that same time period. The Casper field office granted 280, Rawlins 199, Worland/Cody 61, Kemmerer 33 and Lander nine.

BLM state office officials said Wednesday they have reviewed the report and agree with most of the GAO recommendations.

"This is an issue the administration is examining closely, and we value the findings of the GAO," state BLM Assistant Director for Communications Celia Boddington said in an e-mail.

No justification

The GAO review found numerous examples -- in 85 percent of the BLM field offices -- where officials did not correctly follow the agency's guidelines, most often by failing to adequately justify the use of categorical exclusions.

The GAO reported several types of violations of the law, including approving more than one oil and gas well under a single-decision document, approving projects inconsistent with the law's criteria, and drilling a new well after time frames had elapsed.

In 2005, Congress and the Bush administration wanted to ramp up domestic energy development, in part by removing unnecessary hurdles to production that many lawmakers believed were bogging down the permitting process.

The Energy Policy Act of 2005 was enacted to expedite oil and gas development on federal lands and included new procedures to fast-track the permitting process.

Section 390 of the act authorized the BLM to use categorical exclusions to streamline the environmental analysis required when approving certain oil and gas activities. That basically gave the BLM the leeway to bypass environmental reviews for new drilling -- if there is already some oil and gas development in an area, and if previous environmental analysis was conducted for that area within the past five years.

But numerous questions were raised by conservationists and others about how and when the agency should use the categorical exclusions.

Congress directed the GAO to report on the extent to which the BLM has used section 390 categorical exclusions and the benefits, if any, associated with their use.

The GAO was also asked to examine the extent to which the BLM has complied with the act and the key concerns, if any, associated with use of the section.

Source of confusion

Wednesday's report identified a number of significant issues that have been sources of "confusion" for the BLM and its field offices.

The study recommended that Congress consider amending section 390 to clarify and resolve key issues such as clearly specifying whether categorical exclusions apply even in the presence of extraordinary circumstances.

But until Congress acts, the GAO report recommended the BLM take three actions in the meantime to reduce noncompliance, and to clarify how and when categorical exclusions are to be used.

Those actions include issuing detailed and explicit guidance to address gaps and shortcomings in its present guidance; providing standardized checklists for each of the five types of categorical exclusions; and developing and implementing a plan for overseeing the use of the exclusions.

Contact southwest Wyoming bureau reporter Jeff Gearino at 307-875-5359 or gearino@tribcsp.com

Lummis questions BLM call on Wyoming Range leases

CHEYENNE -- U.S. Rep. Cynthia Lummis said the Bureau of Land Management didn't have the authority to rescind drilling leases on about 24,000 acres in the Bridger-Teton National Forest.

The Wyoming Republican questioned Interior Secretary Ken Salazar about the oil and gas leases Wednesday at a hearing in Washington, D.C.

Wyoming state BLM Director Don Simpson announced last month his agency wouldn't allow oil and gas drilling on 23 leases in the Wyoming Range. Energy companies had purchased the leases, but the BLM didn't issue them after conservation groups protested.

Lummis said the BLM is bound by the Mineral Leasing Act to issue leases to the winning bidder within 60 days of payment.

Salazar said he'll write a response to Lummis.

NEWS TRACKER

Last we knew: Congress had directed the Government Accountability Office to report on the Bureau of Land Management's use of categorical exclusions when granting drilling permits in Wyoming and other states.

The latest: The GAO issued its report on categorical exclusions Wednesday. The report can be found on the agency Web site (www.gao.gov).

What's next: The U.S. House's Natural Resources Committee and its Subcommittee on Energy and Mineral Resources will hold a hearing today to discuss the report's findings.

Copyright 2015 Casper Star-Tribune Online. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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