Understanding the NEPA Process for Oil and Gas Development on Federal Lands

Title: Understanding the NEPA Process for Oil and Gas Development on Federal Lands
Authors: Eileen Regan and Mark DeHaven, ERO Resources Corporation
Publication: The Outcrop, May 2005, p. 1, 6-7

Almost 42 million acres of federal lands were leased for oil and gas development in 2004, including more than 35 million acres in the Rocky Mountains. Before development of mineral leases on federal lands can occur, the lead federal agency is required under the National Environmental Policy Act (NEPA) to evaluate the environmental impacts associated with the oil and gas developers’ proposed actions as outlined in the Application for Permit to Drill (APD).

Oil and gas development on federal lands can be controversial and time consuming; it is important to plan ahead not only for the technical aspects of a drilling plan and surface use plan, but also for the environmental documentation that will be required as part of the NEPA process. Recent increases in oil and gas development have drawn greater public interest because of potential effects on water quality, land use, wildlife, wetlands, threatened and endangered species, cultural resources, recreation, local transportation, and socioeconomic concerns. A comprehensive oil and gas exploration and development plan is needed to accomplish drilling goals while minimizing environmental impacts and satisfying regulatory compliance.

There are three types of NEPA compliance documents depending on the level of activity and the significance of the potential environmental effects Categorical Exclusions (CATEX), Environmental Assessments (EA), and Environmental Impact Statements (EIS). The requirements for CATEX vary by federal agency, but are usually sufficient for several exploration wells on small drill pads where existing roads are used to access the sites. Documentation for a CATEX typically includes a description of the proposed action and its potential environmental effects and mitigation, and information supporting the determination that no extraordinary circumstances would significantly affect the environment. Public meetings or document review are not required.

diagramEAs or EISs are required for more complex projects that are likely to involve multiple new wells, roads, and pipelines. The key factor in deciding whether an EA or an EIS is required is the potential for the action to cause a significant environmental effect. Determining what constitutes a significant effect is not always straightforward. Regulations define significance based on the context or scale of the action and on the severity of impacts. Significant impacts might include adverse impacts to wildlife, wetlands, threatened or endangered species, ecologically important areas, or cultural resources. Impacts to the quality of the human environment frequently are considered significant. The lead federal agency is responsible for determining whether an EA or an EIS is appropriate. If the lead agency determines that the project is unlikely to have significant impacts, then the proposed action would be documented in an EA. The results of the EA will determine whether a “finding of no significant impact” (FONSI) can be issued or if an EIS needs to be prepared. Typically, if there is a reasonable likelihood for significant impacts, the lead agency will go straight to preparation of a full EIS, particularly if it is a major project such as multi-well field development. As shown in Figure 1, the NEPA process can be lengthy and complex.

Both EAs and EISs require data collection, surveys, and analyses to evaluate potential impacts to biological resources, water resources, cultural resources, and other impacts associated with the proposed action. Biological surveys may be needed to address potential effects to threatened and endangered species protected under the Endangered Species Act, the results of which are documented in a Biological Assessment (BA) prepared for the U.S. Fish and Wildlife Service. The Forest Service and Bureau of Land Management may require a Biological Evaluation (BE) to address potential impacts to sensitive species as defined by those agencies. Cultural resource surveys are needed to comply with the Historic Preservation Act and Section 106 compliance. The EA process typically includes public notice of the proposed action and the EA is made available for public comment. An EIS has additional public notification and input requirements as discussed below. Federal lead agencies are responsible for preparation of EAs and EISs, but because of funding and staffing limitation, these and associated documents are generally prepared by third-party contractors. In this arrangement, the project proponent funds the studies and preparation of NEPA documents; the lead agency is responsible for reviewing the information prepared by the contractor and adopting the completed document.

The EIS process begins with the lead agency filing a notice of intent to prepare an EIS. The formal public participation process is initiated with “scoping,” which includes a forum for receiving public comments on the proposed project. A Draft EIS (DEIS) is prepared by an interdisciplinary team of resource specialists. The lead agency publishes the DEIS and requests comments on the document from the public, cooperating agencies, and other agencies, including the Environmental Protection Agency. Following review and consideration of the comments, a Final EIS (FEIS) is prepared. The lead agency issues a “Record of Decision” (ROD) describing its decisions and any conditions on the proposed project.

The NEPA process can range from simple to complex; therefore, it is important to meet with lead agency staff and an environmental consultant early in the process to help determine the best approach for efficient data collection and document preparation. A number of sources provide more information on the NEPA process. The Council on Environmental Quality a federal body established by NEPA has detailed regulations and reports that help guide agencies and the public through the NEPA process (ceq.eh.doe.gov/nepa/nepanet.htm). BLM’s website (www.blm.gov/planning/policy_nepa.html) also provides information on NEPA, including its NEPA Handbook.

Editors’ note: ERO Resources Corporation (www. eroresources.com) is an environmental consulting firm with expertise in environmental compliance for the oil and gas industry. ERO is Denver-based with additional offices in Durango and Boise, Idaho. For more information, contact Mark DeHaven at 303-830-1188 or mdehaven@eroresources.com.