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Know the West

Safe(r) CX


They were, to say the least, a bit promiscuous.

Between 2006 and 2008, the Bureau of Land Management -- the primary agency responsible for overseeing drilling on federal lands -- permitted more than 6,100 oil and gas projects without detailed environmental review using special "categorical exclusions," according to a Government Accountability Office analysis. The waivers -- known as CXs for short -- were a goody given to the oil and gas industry in the 2005 Energy Act. As I reported for HCN last fall, the BLM was likely able to use so many CXs thanks in part to its interpretation of the  law:

 Under federal regulations that predate the Energy Act, a categorical exclusion can be used to approve a (relatively benign, individual) activity without environmental review unless “extraordinary circumstances” exist — impacts to a cultural site, for example, or the potential for significant cumulative environmental effects. But because the oil and gas CXs were spelled out in a law, the BLM told its staff they need not screen for “extraordinary circumstances” when permitting projects — though they must still comply with the Endangered Species Act and other laws. Widespread use of the new measures sped up permitting and increased efficiency. And while that may have allowed BLM staff more field time to enforce environmental rules (the 200 extra oil and gas staffers hired under the 2005 Energy Act probably helped, too), it also gave them time to process ever more drilling permits.

Now, all of that is changing. On Jan. 6, Interior Secretary Ken Salazar unveiled a slate of oil and gas policy reforms. Among them is a complete reversal in how the agency approaches CX:

In accordance with White House Council on Environmental Quality guidelines, BLM will (no longer) use these CX’s in cases involving “extraordinary circumstances” such as impacts to protected species, historic or cultural resources, or human health and safety. 

The reforms also include:

  • Comprehensive interdisciplinary review of parcels of land nominated for leasing to ensure local resources can be protected, and that energy development is appropriate for that place.
  • Greater public involvement in developing Master Leasing and Development Plans for areas where intensive new oil and gas extraction is anticipated so that it can go forward in the least harmful way possible.
  • The BLM will continue to accept the oil and gas industry's suggestions regarding where to offer leases, but will emphasize leasing in already-developed areas and will plan carefully for leasing and development in new areas.

Environmental groups were pleased. Surprisingly, though, some Western governors weren't so happy about the turnaround. Back when the GAO released its critique of categorical exclusions last fall, Wyoming Governor Dave Freudenthal was all about reforming the system:

"We have too much at stake in Wyoming, in terms of air quality, water quality and wildlife in particular, to not take the hard look that (the National Environmental Policy Act) requires at some point," (he told the Casper Star Tribune in September).

"To short circuit the process may serve some short-term interests of those who want to play fast and loose with the rules ... but the better folks in the industry understand that such an approach ultimately costs them in the long run ... These categorical exclusions are not categorically bad -- some make a great deal of sense -- (but) we need to cut with a scalpel, not with an axe."

Indeed, in 2007 Freudenthal led the Western Governor's Association in calling on Congress to eliminate some oil and gas CXs to better protect wildlife.

But this week, Freudenthal met with Salazar to protest the latest reforms, the Star-Tribune reports:

In a letter to Salazar sent Friday, Freudenthal said the proposed policy changes would create burdensome new requirements and give environmental interests “a stranglehold on an already cumbersome process.”

“The proposed changes potentially hand significant control over oil and gas exploration, development and production to the whims of those that profess a ‘nowhere, not ever’ philosophy to surface disturbance of any kind,” Freudenthal wrote in the letter.

Freudenthal also asserted that adding more environmental reviews would be redundant and potentially open the door to even more lawsuits over oil and gas leases.

Though Freudenthal has always been pretty pro oil and gas (it's a major source of revenue and jobs in his state), the latest reversal is pretty stunning. It's also uncannily similar to Colorado Gov. Bill Ritter's attempts to capitulate with the oil and gas industry after ushering through sweeping new state environmental rules to govern the industry. Ritter's sudden coziness had to do with the tough reelection bid he faced this fall (before dropping out of the running last week, that is.) Freudenthal's term ends this fall as well. With the economy still in the tank, perhaps he's trying to corner the energy vote (and the energy campaign dollar)?