Inside EPA’s Water Policy Report    January 19, 2010 compliments of Richard Charter

EPA’s ‘No Impact’ Finding For Gulf Drilling Could Spur NEPA Challenge

An EPA general permit for drilling in the Gulf of Mexico could spur a legal challenge because of its failure to adequately consider the expanded drilling the permit will allow due to the passage of the Gulf of Mexico Energy Security Act (GOMESA) in 2006, according to environmentalist sources.

EPA Region IV in late December proposed reissuing a National Pollutant Discharge Elimination System (NPDES) general permit for the Outer Continental Shelf of the Gulf of Mexico for offshore oil and gas drilling, issuing a preliminary finding of no significant impact (FONSI) letter based on an environmental assessment (EA). /Relevant documents are available on InsideEPA.com./

But one environmental source says the agency should have performed a more extensive environmental analysis known as an environmental impact statement (EIS), noting that GOMESA opened some 8 million acres of previously protected offshore areas to drilling, which will have an effect on the Gulf’s overall water quality. The FONSI acknowledges but does not substantially address the impact of GOMESA on water quality.

Under the National Environmental Policy Act (NEPA), federal agencies are required to perform an EA to determine whether a federal undertaking would significantly affect the environment, and if the answer is yes, the agency is required to prepare an EIS. Alternatively, a federal agency may start with an EIS if the agency anticipates the undertaking may significantly impact the environment or if a project is environmentally controversial.

“NEPA comes into play when there’s some major or significant change, either in the permit or the discharge,” the source says. “I think the expansion of an existing permit into brand new areas without [an EIS]. . . is not going to pass muster with the courts.”

An oil and gas industry spokesman says industry also is concerned that the EA may not have been sufficient to stave off a legal challenge from the environmental community. But the source says the FONSI is correct in its overall finding that offshore drilling can be done in a safe and efficient manner and that there is no reason not to allow the permit to be renewed.

Industry thinks the lack of an EIS “is a valid concern, but we think that if someone in the environmental community is going to sue, they’re going to sue regardless” of whether an EA or EIS was performed, the spokesman says.

In the EA, the agency acknowledges that 8.3 million previously reserved acres in the Gulf of Mexico fall under the purview of the NPDES general permit as a result of GOMESA, including 5.8 million acres that were under moratorium. But the EA says further environmental analysis will occur when the Department of Interior’s Minerals Management Service (MMS) develops a lease sale for those acres, noting that MMS will “most likely” conduct an EIS to consider the environmental impacts of drilling.

The environmental source, however, says that acknowledgment is insufficient to ensure that drilling operations are adequately protective of the environment, and highlights the shortcomings of the general water permit itself. For example, the source points to a controversy in the early 2000’s about elevated levels of mercury in Gulf waters that originated in drilling mud — pressurized fluid that is used to bore holes in the earth (/Water Policy Report/, Feb. 12, 2001).

There is also increased interest in determining whether produced water — water released from subterranean pockets or aquifers mixed with surface water used to force oil or gas out of its pocket — may be a source of radioactive contamination from elements like radium. The environmental source says this phenomenon has been well documented in surface mining but is relatively unknown in the offshore arena, spurring a new realm of concern about the environmental impacts of offshore drilling, the source says.

“You’re dealing with very large areas, and I don’t think you’re dealing with the level of detail necessary” to protect the environment, the source says. “These kinds of area-wide permits don’t catch a lot of pollution.”

Another environmental source says the FONSI sparks concerns that industry could be ramping up another effort to make an end-run at offshore drilling in areas that have been closed, either for ecological or political reasons. In the past, the source says, offshore drilling in Florida had been a political taboo because of the potential threat a discharge could pose to the large tourism industry associated with the state’s beaches. But in recent years, with the spiking price of oil, state politics have been more mixed. Whether the permit in itself is an indicator of such a move or not is unclear, but it is at least one less hurdle in the way of expanded energy extraction.

“It makes me wonder what the plan is here,” the source says. “It may signal that some in [industry] think they can make a run at offshore gas fields.”

The State of Florida’s Department of Environmental Protection says they are reviewing the permit and are withholding comment pending the completion of their review.

An EPA spokeswoman says the agency conducted two EIS studies on the Gulf, one between 1996 and 1998 and a supplemental EIS in 2004, and that the EA conducted as part of reissuing the NPDES general permit was meant to address any issues that have arisen since the 2004 EIS. In the agency’s view, the spokeswoman says the EA was sufficient to cover any water quality concerns that may have arisen as part of GOMESA or from any other concerns. — /John Heltman /