Secretary of the Interior Ken Salazar and Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) Director Michael R. Bromwich announced  Monday, August 6, that the department will restrict its use of categorical exclusions for offshore oil and gas development to activities involving limited environmental risk, while it undertakes a comprehensive review of its National Environmental Protection Act (NEPA) process and the use of categorical exclusions for exploration and drilling on the Outer Continental Shelf.

Director Bromwich and Secretary Salazar also announced that the Department of the Interior intends to conduct a new environmental analysis in the Gulf of Mexico that will help provide information to guide future leasing and development decisions.

In the coming days, BOEM will publish a notice in the Federal Register of its intent to complete a supplemental environmental impact statement for the Gulf.

“In light of the increasing levels of complexity and risk – and the consequent potential environmental impacts – associated with deepwater drilling, we are taking a fresh look at the NEPA process and the types of environmental reviews that should be required for offshore activity,” Secretary Salazar said. “We are committed to full compliance with both the letter and the spirit of NEPA. Our decision-making must be fully informed by an understanding of the potential environmental consequences of federal actions permitting offshore oil and gas development.”  



“The NEPA review and Gulf environmental analysis are central elements of our ongoing reform of the nation’s offshore energy development and regulatory program,” Director Bromwich said. “We are building a more robust and aggressive independent oversight agency based on the development of new tools and enhanced legal and regulatory authorities, as well as on the more aggressive use of existing tools. These changes in our regulatory framework and approach will serve to hold offshore operators accountable and ensure that the industry and the country are fully prepared to deal with catastrophic blowouts and oil spills like the Deepwater Horizon.”

Today’s announcements follow the release of the Council on Environmental Quality’s (CEQ) report on the former Minerals Management Service’s NEPA program.

The report was done in close consultation with Interior and BOEM which replaced the Minerals Management Service.

BOEM will issue a Federal Register notice announcing a formal process for the comprehensive review and evaluation of its use of categorical exclusions in relation to offshore oil and gas exploration and drilling activities. While this review is underway, Director Bromwich noted, BOEM will be using categorical exclusions on a more limited basis. For actions that potentially involve more significant environmental risk, Interior officials intend to subject more decisions to environmental assessments.  



The limited use of categorical exclusions will allow BOEM to move forward with new permits under the Secretary’s NTL-05 and NTL-06, which notified offshore lessees that shallow water drilling activity could proceed as soon as they provide additional information about potential blowout scenarios and implement additional safety measures for rigs and platforms. Most deepwater drilling activities are currently prohibited by the moratorium, but Director Bromwich has instructed his staff not to use categorical exclusions to approve deepwater drilling activities similar to the Deepwater Horizon operation even after the moratorium is lifted.  

When the review is completed, BOEM will announce a new approach to NEPA compliance that takes into account the joint recommendations included in CEQ‘s report, statutory and/or regulatory constraints, and other appropriate factors. This is consistent with the Council’s regulations directing all federal agencies to periodically review their NEPA policies and procedures.



Categorical exclusions are actions that do not individually or cumulatively have a significant effect on the human environment and for which neither an environmental assessment nor an environmental impact statement is required. The categorical exclusion process was established to reduce the amount of unnecessary paperwork and delay associated with NEPA compliance. If a certain type of federal action would not normally result in any environmental effects that are potentially significant, it is unnecessary to expend resources to repeatedly document that fact.

 However, exceptions to a categorical exclusion may arise and federal agencies are required to develop procedures to determine whether a normally excluded action may have a significant environmental effect. The Categorical Exclusion Review determines whether a proposal that is categorically excluded may meet any of the Department’s extraordinary circumstances criteria, requiring an environmental assessment or environmental impact statement.

To read Director Bromwich’s memo, click here. The CEQ review, Report Regarding the Minerals Management Service’s National Environmental Policy Act Policies, Practices, and Procedures as They Relate to Outer Continental Shelf Oil and Gas Exploration and Development, is online at CEQ Review and Report. More on the categorical exclusion process is online at http://www.doi.gov

The Department of the Interior added to the growing uncertainty for the offshore industry yesterday when it announced it will restrict the use of categorical exclusions for offshore oil and gas development, review its National Environmental Protection Act (NEPA) process and the use of categorical exclusions, require Environmental Assessments (EA) in the place of these exclusions, and will conduct a supplemental Environmental Impact Statement (EIS) for the entire Gulf of Mexico. 

“Our initial reaction is that in the short term this will cause more confusion and uncertainty for industry,” said Jeff Vorberger, Government Relations Director for the National Ocean Industries Association (NOIA). “That has certainly been the case for the current deep water moratorium and shallow water de facto moratorium.”

“The move to review the data regarding exploration in deep water should be done in a manner that does not cause a tailspin of jobs in the exploration and development field,” said Vorberger.  “The Department must dedicate sufficient resources to organize and incorporate the existing data as soon as possible, otherwise this exercise could add months and perhaps even years to the review and approval process with little environmental benefit.” 

The Department’s announcement that it will also conduct a supplemental EIS for the entire Gulf of Mexico portends even more uncertainty for the industry.  “We are concerned that the current deep water drilling suspensions could continue longer than expected while the supplemental EIS is completed, or may result in a de facto moratorium should the suspensions be lifted while it is underway,” said Vorberger.   “Either way, the end result could be less domestic energy, fewer domestic jobs and little environmental benefit.”

There are misconceptions about the use of categorical exclusions under NEPA.  Categorical exclusions have been a part of the NEPA process for decades.  However, the recent focus on a categorical exclusion used leading up to the lease sale that included the submerged land where BP drilled the Macondo well, may lead some to believe that such a tool is unique to the former Minerals Management Service (MMS).  In fact, many Federal departments and agencies have processes for the use of categorical exclusions.  

Also contrary to what some may believe, a categorical exclusion does not entirely bypass an environmental review.  Categorical exclusions are usually granted once it is determined that a federal action, such as the approval of an exploration plan, does not need additional review.  Before the Department makes a determination on whether to allow a categorical exclusion, it has usually already conducted other environmental reviews, such as one or more EISs or EAs.

For example, an EIS is conducted on the Five Year Plan itself and usually a second multi-sale EIS is conducted for a specific offshore region before lease sales are held.  Department officials review the existing impact statements and determine if sufficient environment analysis has been conducted on the overall process to grant a categorical exclusion.  http://www.noia.org

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  The NOIA membership comprises more than 250 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance.