BOEM wants OCS focus & transparency

Agency tweaking lease sale program to improve public participation; says Alaska OCS lease sales will no longer be areawide

Alan Bailey

Petroleum News

With a mandate to promote the development of U.S. offshore resources, the Bureau of Ocean Energy Management’s oil and gas lease sales on the federal outer continental shelf form a cornerstone of the agency’s oversight of the nation’s subsea assets. But, as the old Minerals Management Service has morphed into three new Department of the Interior agencies in the wake of the Gulf of Mexico Deepwater Horizon disaster, the Bureau of Ocean Energy Management, or BOEM, one of the new agencies, has adjusted its mission statement to elevate the emphasis on environmental protection, James Lima, BOEM minerals leasing specialist in Alaska, told the Alaska Forum on the Environment on Feb. 5.

“With the changes to our structure and with the changes in our mission, we’ve more elevated the role of the environment and environmental analysis in our decision making,” Lima said.

And, along with that change in emphasis, the agency has made some enhancements to its five-year lease sale program, Lima said. Those enhancements will make the process for developing and maintaining the program more transparent to the public while also making the program more “regionally tailored” for different outer continental shelf, or OCS, planning areas, Lima explained.

Focused sales

The idea in Alaska is to exclude areas that have lower oil and gas potential but that have more important resource potential in terms of wildlife habitat, subsistence needs or other factors identified from BOEM’s analysis, Lima said.

“For Alaska, based on the direction of our regional director and the secretary of the Interior, we have abandoned the areawide approach to lease sales for the Beaufort and the Chukchi,” he said.

However, as part of the lease sale process, BOEM will invite industry to nominate areas of interest for leasing, Lima said.

Lease sale program

Lima characterized the BOEM lease sale program as the confluence of two distinct processes: the lease sale program process under the terms of the Outer Continental Shelf Lands Act, and the environmental review process under the terms of the National Environmental Policy Act, or NEPA.

Starts broad, ends narrow

As the focus of attention narrows through this process the potential environmental impact of an action also becomes more focused, with more precise predictions of environmental effects becoming possible, Lima said. And the NEPA process, involving environmental reviews and the development of environmental impact statements at key points, assesses those potential environmental effects as part of BOEM’s overall decision making approach.

Opportunities for comment

To overcome this problem, BOEM is implementing two new features on its website: a mapping tool and a tracking table, Lima said.

The mapping tool involves an interactive map portal, enabling members of the public to use the map system maintained by BOEM and the National Oceanic and Atmospheric Administration. Using the new public website portal, people will be able to document on maps subsistence information, wildlife locations and environmental data. People will be able to generate their own maps, perhaps suggesting areas where leasing may be beneficial or where leasing should be deferred, Lima said.

The new online tracking table, operating in parallel with the mapping facility, will document every environmental mitigation measure and every lease sale deferral suggested by the public. Information maintained in the table will enable the public to track each comment or suggestion, with people able to see how BOEM has responded to each idea.

Progress reports

Annual reports of this type are not new and have been produced throughout the history of the OCS lease sale program, Lima said. But previously the reports have been primarily published for internal agency consumption: Making the reports more public will help improve the overall transparency of the lease sale process, he said.

And one outcome of findings presented in an annual report could be changes to the lease sale plan. Although the secretary of the Interior will not necessarily make any plan changes, findings in the report could lead the secretary to delay, cancel or reduce the size of scheduled sales, Lima said.

The OCS pyramid: Is there a better way?

Interior conducts an environmental review at each stage of the process, assessing environmental risks and determining what mitigation measures may be necessary for the environmental protection of areas where industrial activities will take place. And the theory behind the process assumes that, as those impacted areas become increasingly tightly specified, the environmental issues will become increasingly clear, thus enabling increasingly specific environmental protection measures to be mandated as the process moved down the pyramid from the lease sale program to eventual development drilling.

Lengthy delays

Two speakers at Law Seminars Internationals’ Energy in Alaska conference in December commented on the issues that Interior’s OCS leasing process raises.

Bradford Keithley, partner in the oil and gas practice of Perkins Coie LLP, told the conference that Interior’s process creates substantial risk and uncertainty for companies wanting to find and develop offshore oil and gas.

Norway comparison

“In Norway it takes a long time to get to leasing, because there is a process of consultation with local communities, to ensure that there is consistency between the desires of the local communities and the development of oil resources,” Keithley said. “All of that is done before leasing.”

Environmental perspective

Using a double entendre referencing the company at center of controversies over Arctic OCS drilling, Van Tuyn said that Interior’s process encourages a “shell game,” in which the ball of difficult environmental decisions tends to be punted from one process stage to the next without resolution.

“This system sets up a punt process, a shell game if you will, where you are hiding the ball until later stages, and that does create opportunity … and urgency to challenge decisions, because we’re flying blind,” Van Tuyn said. “We’re making decisions without understanding their potential environmental impacts, and that’s why you see that kind of controversy that happens here in the U.S.”

Van Tuyn said that Interior’s intentions of holding focused OCS leases sales in specific parts of a planning area, to impose seasonal restrictions on Arctic operations and to develop Arctic-specific standards will help address concerns with the current leasing process.

—Alan Bailey