NEPA STREAMLINING SOME OBSERVATIONS ON ITS USE IN THE CONTEXT OF THE BLM AND FOREST SERVICE OIL AND GAS PROGRAM
| Jurisdiction | United States |
(Sep 2004)
NEPA STREAMLINING SOME OBSERVATIONS ON ITS USE IN THE CONTEXT OF THE BLM AND FOREST SERVICE OIL AND GAS PROGRAM
Bjork Lindley Little PC
Denver, Colorado
After earning her B.S. degree from Louisiana State University and working as an abstractor for a couple of years in south Louisiana, Laura Lindley came West to earn her law degree from the University of Denver (1980, Order of St. Ives). She was affiliated with the Denver firm of Poulson, Odell & Peterson until 1992, and since then has been a shareholder in Bjork Lindley Little PC, emphasizing oil and gas law and public land issues.
Laura is a past president of the Rocky Mountain Mineral Law Foundation and continues to participate in a number of Foundation efforts, including serving as a Trustee, writing papers for annual and special institutes, teaching at the Federal Oil and Gas Leasing Short Course, and reporting on federal developments for the Mineral Law Newsletter. She has also written an article on the history of the Mineral Leasing Act for the ABA's Natural Resources & Environment, and contributed a chapter to The NEPA Litigation Guide published by the ABA.
I. NEPA Task Force Report to CEQ
• September 2003 report but apparently no action yet on the recommendations
• Available at http://ceq.eh.doc.gov/ntf/report/index.html
• Series of regional public roundtables held after report was released
II. Revised Department of the Interior NEPA Implementing Procedures
• 69 Fed. Reg. 10,866 (Mar. 8, 2004)
• DOI OEPC - Office of Environmental Policy and Compliance
• OEPC Environmental Memoranda Series
III. Unique Difficulties Applying NEPA to the Oil and Gas Program
• Unlike coal, for example, at the leasing stage for oil and gas there is often a great deal of uncertainty about the location of the resource and, if it exists, whether it can be economically recovered.
• By statute, oil and gas leases are issued for a primary term (now 10 years) and so long after its primary term as oil or gas is produced in paying quantities. 30 U.S.C. § 226(e).
• Technological advances made during the extended term of a lease could create new production possibilities not anticipated when the lease was issued or when production first began.
• Example: San Juan Basin, where oil production from 1950's-vintage leases was first obtained from the Gallup formation and then gas production was obtained from the Gallup, Pictured Cliffs, Dakota, Mesaverde and finally from the Fruitland Coal.
• That uncertainty about whether the resource exists and whether and how it can be economically recovered (e.g., spacing, fracturing, waterflood) makes it difficult to predict all impacts at the leasing or exploration stage.
• Compare to NEPA analysis on a highway project where location, alternative locations and construction techniques are known.
• Additional difference: third party vs. agency-generated proposal.
IV. Complaints: Delay, Delay, and Uncertainty
• Poor oversight and no accountability
1. CEQ regulations direct the agency to set time limits if the applicant requests. 30 C.F.R. § 1501.8 . While a schedule may be incorporated into a memorandum of understanding (MOU), it is seldom adhered to.
2. Cultural difference between industry proponent and BLM/FS: Industry views MOU as a contract to which both parties will adhere. Agency views MOU as merely a paperwork necessity to insure third party contractor is paid by applicant.
3. Decentralized nature of BLM and Forest Service management means an applicant has little recourse (other than whining) if the agreed upon schedule slips. Neither agency demands any accountability from the EIS team leader to keep the project on schedule.
• Inexperienced and/or unempowered team leaders
1. The agency forms an interdisciplinary team (IDT) to prepare the EIS or supervise the contractor's preparation. The IDT leader may be preparing his/her first EIS.
2. IDT leader is unable to obtain timely feedback from IDT members.
3. Process grinds to a halt any time IDT leader is out of office for vacation, illness, training or other priorities, or if the IDT leader transfers to another office. Agencies have no systems to provide back-up coverage.
4. Lack of training results in unnecessary wasted time. For example, CEQ regulations direct that the focus of NEPA documents be on significant issues, not encyclopedic discussions of all possible issues, no matter how unimportant. 40 C.F.R. § 1502.2. However, unnecessary time is spent by failing to tier to earlier documents, focusing on formatting or other non-substantive details, re-creating the EIS format or layout each time, failing to focus on the proposed action and reasonable alternatives to the proposed action.
5. As a result, the project proponent constantly faces the dilemma: Will it slow the process more if I try to get the IDT leader back on track or if I just allow IDT leader to go down unnecessary road?
• MOU - inordinate amounts of time and energy are spent "negotiating" the terms of an MOU between the agency (or agencies) and the applicant when the agency routinely ignores the MOU once the EIS is begun.
• Third Party Contractors - the proverbial blank check. The applicant must pay all the contractor's bills but depending on which agency and which specific office you are dealing with, the applicant may not be allowed to talk to the contractor or even to the agency about the content of the EIS. The CEQ regulations require only that the agency participate in the preparation of the EIS and "independently" evaluate the statement prior to its approval and take responsibility for its scope and content. 40 C.F.R. § 1506.5(c). However, some agency offices believe the applicant can have no input in the process. This attitude leads to errors in the description of the proposed action, the description of the purpose and need, and sometimes in the outline of alternatives and of achievable mitigation.
• Lack of flexibility if the proposed action needs to be revised - Because of the often lengthy delays between initial proposal of a drilling project and release of a draft EIS, external events can overtake the process. For example, because of other drilling in the area, the applicant may revise its plan with respect to spacing, anticipated number of wells, etc. The system is designed to encourage the applicant to remain silent about the developing information so as not to further delay the process. The result can be the need to commence an additional NEPA document as soon as the current one is completed, failure to analyze a potential mitigation measure, or preparation of a NEPA document after drilling results or other new data have condemned industry interest in the area.
• Complete lack of understanding or interest on the part of the agency for the time value of money. How does a lawyer or landman respond when his/her manager asks "How long until we can start drilling?" If the answer is 12 months, the project may be economic; if the answer is 32 months, it may not be economic.
V. Examples of Timelines for NEPA Documents prepared by Third Party Contractors
• Price Coalbed Methane Project
1. BLM lead agency
2. Notice of Intent (NOI) published August 15, 1994
3. DEIS released October 18, 1996
4. FEIS/ROD released May 30, 1997
• Continental Divide/Wamsutter II Project
1. BLM lead agency
2. NOI published March 6, 1995. Due to change in extent of project, public scoping was re-initiated on May 30, 1997.
3. DEIS released April 30, 1999
4. FEIS released December 10, 1999
5. ROD issued May 24, 2000
• Cave Gulch/Bullfrog/Waltman Project
1. BLM lead agency
2. NOI published March 19, 1996
3. DEIS released January 30, 1997
4. FEIS released June 1997
5. ROD issued July 29, 1997
• Ferron Project
1. BLM lead agency
2. NOI published January 28, 1997
3. DEIS released October, 1998
4. FEIS released June 1999
5. ROD issued July 6, 1999
• Pinedale Anticline Exploration and Development
1. BLM lead agency
2. NOI published July 14, 1998
3. DEIS released October 1999
4. FEIS released May 2000
5. ROD issued July 27, 2000
• Desolation Flats Project
1. BLM lead agency
2. NOI published May 24, 2000
3. DEIS released March 17, 2003
4. FEIS released May 28, 2004
5. ROD issued July 30, 2004
• Northern San Juan Basin Coal Bed Methane Project
1. Forest Service and BLM are joint lead agencies
2. 56 pending APDs
3. NOI published April 4, 2000
4. October 2001 (1-1/2 years after NOI first published), lessees revised their proposal to increase anticipated number of wells
5. June 2004 - Draft EIS released - more than 4 years after initiation of process. 90 day comment period (unless extended).
6. Record of Decision - when?
• Yates Petroleum #1 Well - Thunder Basin National Grassland
1. Forest Service lead agency
2. Lease issued in 1997; lessee filed APD in October 2001
3. NOI published February 25, 2002
4. DEIS released May 2004
5. FEIS to be released when?
• Jonah Infill Drilling Project
1. BLM lead agency
2. October 2002: operators proposed infill drilling within the footprint of the existing field
3. NOI published March 13, 2003
4. Draft EIS when?
VI. Recommendations
• Department of the Interior and the Forest Service should create accountability for IDT leader to meet deadlines and prepare a substantively defensible document.
• Example: DOE Office of NEPA Policy and Compliance publishes a quarterly newsletter called "Lessons Learned." It documents milestones reached in the preparation of NEPA documents, publishes the time and cost of specific documents, and shares successful and unsuccessful strategies Department-wide.
• DOE experience: "When driven by strong management attention, EISs for complex proposals have been completed in 15 months or less." Lessons Learned, Sept. 2, 2003, p.3 (emphasis added). Agency management must be accountable for timely...
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