Categorically Excluding Domestic Energy Production Natural Gas

Posted May 25, 2010 | folder icon Print this page

Recently, the Department of Interior finalized changes to its onshore oil and gas leasing program. These changes are designed to slow down leasing on federal lands. Clearly, these changes ignore federal law and create a new extra-legal barrier to issuing new permits for energy development. This is not called for by federal law and it is one more example of this Administration’s anti-energy agenda.

One of the largest impediments to energy production on federal land is the analysis required by the National Environmental Policy Act (NEPA). Frequently, an analysis under NEPA runs to thousands of pages, takes years to produce, and costs tens if not hundreds of thousands of dollars. When done correctly, NEPA analysis can produce important information about a proposed activity. But they can also be duplicative and overly burdensome when multiple analyses are required on essentially the same activity.

Here is an example of the how these analyses can be duplicative and overly burdensome. If an energy company receives a lease and wants to drill an oil or gas well, they need to complete a NEPA analysis and produce an environmental impact statement (EIS) which often total thousands of pages. If however, they come back a year later and want to drill another well on the same pad, they need to start from scratch and produce a new analysis under NEPA. It does not matter if nothing has changed from the previous year, they will still need to produce thousands of pages of environmental analysis, pay the proper consultants, and take the time necessary to compile the report, and go through the public comment process even though they did the same thing a year earlier. This is not common sense, but environmental pressure groups like the process because it gives them leverage to slow down, stall, increase the cost, and halt energy projects on federal lands.

To deal with this problem, Congress included a section of EPAct in 2005[1] that allowed the federal government to forgo unnecessary duplicative environmental analyses if a number of conditions were met and the activity fell into a certain number of categories. They are called categorical exclusions. One person critical to crafting this bill was Rep. John Dingell (D-MI), author of NEPA itself. Rep. Dingell made sure the section was narrowly crafted to only apply in very specific circumstances to allow new oil and gas drilling when a NEPA analysis had recently been conducted on a very similar project, or even the same drill pad within the past five year for example.

In an effort to thwart the will of Congress, environmental pressure groups sued the Department of Interior concerning some oil and gas issued during the Bush Administration. Instead of fully litigating the case, the Obama Administration settled. The settlement stated that the Administration would not use categorical exclusions if there are “extraordinary circumstances.” The problem with this settlement is that this is directly contrary to EPAct.

Under the bipartisan EPAct, categorical exclusions could only be used under five narrow circumstances. The term “extraordinary circumstances” was not included in the law. Creating a new limitation defined as “extraordinary circumstances” is an additional regulatory hurdle and will limit energy development on federal lands.

Fact is, this is just one more manifestation of President Obama and Secretary of Interior Ken Salazar’s anti-energy agenda. In this case, they are making up new impediments to energy production.


[1] Sec. 390. NEPA Review.  http://www.epa.gov/oust/fedlaws/publ_109-058.pdf

Author:
IER Webmng