Offshore Oil and Gas Development
Additional Guidance Would Help Strengthen the Minerals Management Service's Assessment of Environmental Impacts in the North Aleutian Basin Gao ID: GAO-10-276 March 8, 2010Interest has re-emerged in developing oil and gas in the nation's offshore areas, such as the North Aleutian Basin. Located on the outer continental shelf (OCS) where the Aleutian Islands meet the Alaskan mainland around Bristol Bay, the basin may contain sizable oil and gas deposits, although the area's environmental and cultural sensitivity has made oil and gas development in the area controversial. The Alaska OCS Region within the Department of the Interior's Minerals Management Service (MMS) oversees oil and gas development in this offshore area. GAO was asked to examine issues related to oil and gas development in the North Aleutian Basin. This report (1) describes the basin's estimated quantities of oil and gas and needed infrastructure; (2) identifies steps MMS is to take to meet federal requirements for oil and gas development; and (3) identifies challenges, if any, MMS faces in meeting these requirements in its Alaska OCS Region. GAO analyzed laws and documents and interviewed representatives from MMS, other federal agencies, state agencies, industry, and other stakeholders.
MMS estimates that substantial amounts of natural gas could exist in the North Aleutian Basin, although the estimates range widely and the upper ranges are highly uncertain. MMS estimates that, with existing conventional techniques, there is a 19 in 20 chance that at least 20 million barrels of oil, and 400 billion cubic feet of natural gas, exist in the basin but a 1 in 20 chance that as much as 2.5 billion barrels of oil, and 23.3 trillion cubic feet of natural gas, exist. MMS officials attribute the estimates' wide range to a lack of data. Although the estimates are much lower than those for other offshore areas, they are high enough to generate oil industry interest. But limited infrastructure exists in the basin for oil and natural gas development, and building the needed infrastructure--such as pipelines, processing facilities, and a tanker terminal--would likely cost billions of dollars. MMS has taken the first of many steps in an extensive process for meeting federal requirements to develop oil and gas in the North Aleutian Basin. Under the OCS Lands Act, MMS's process for oil and gas development comprises four stages: (1) preparing a nationwide 5-year program, (2) planning for and holding a specific lease sale, (3) approving a company's exploration plan, and (4) approving a company's development and production plan. Figuring prominently at each of these stages, the National Environmental Policy Act (NEPA) requires MMS to evaluate the likely environmental effects of proposed actions. As of December 2009, MMS had not proceeded beyond the second stage--the lease sale stage--in the basin. According to MMS officials, completing all four stages could take at least 10 more years. Moreover, delays can occur at any stage; indeed, a number of delays have already occurred in developing oil and gas in the Alaska OCS Region. GAO found that MMS faces challenges in the Alaska OCS Region in carrying out its responsibilities under NEPA. Although Interior policy directs its agencies to prepare handbooks providing guidance on how to implement NEPA, MMS lacks such a guidance handbook. The lack of a comprehensive guidance handbook, combined with high staff turnover in recent years, has left the process for meeting NEPA requirements ill defined for the analysts charged with developing NEPA documents. This absence has also left unclear MMS's policy on what constitutes a significant environmental impact. Furthermore, guidance is also lacking for conducting and documenting NEPA-required analyses to address environmental and cultural sensitivities, which have often been the topic of litigation over Alaskan offshore oil and gas development. In addition to litigation, MMS has been subjected to allegations by stakeholders and former MMS scientists of suppression or alteration of their work on environmental issues. GAO also found that the Alaska OCS Region shares information selectively. This practice is inconsistent with agency policy, which directs that information, including proprietary data from industry, be shared with all staff involved in environmental reviews. According to regional staff, this practice has hindered their ability to complete sound environmental analyses under NEPA.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Mark E. Gaffigan Team: Government Accountability Office: Natural Resources and Environment Phone: (202) 512-3168GAO-10-276, Offshore Oil and Gas Development: Additional Guidance Would Help Strengthen the Minerals Management Service's Assessment of Environmental Impacts in the North Aleutian Basin
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Report to the Chairman, Subcommittee on Interior, Environment, and
Related Agencies, Committee on Appropriations, House of
Representatives:
United States Government Accountability Office:
GAO:
March 2010:
Offshore Oil And Gas Development:
Additional Guidance Would Help Strengthen the Minerals Management
Service's Assessment of Environmental Impacts in the North Aleutian
Basin:
GAO-10-276:
GAO Highlights:
Highlights of GAO-10-276, a report to the Chairman, Subcommittee on
Interior, Environment, and Related Agencies, Committee on
Appropriations, House of Representatives.
Why GAO Did This Study:
Interest has re-emerged in developing oil and gas in the nation‘s
offshore areas, such as the North Aleutian Basin. Located on the outer
continental shelf (OCS) where the Aleutian Islands meet the Alaskan
mainland around Bristol Bay, the basin may contain sizable oil and gas
deposits, although the area‘s environmental and cultural sensitivity
has made oil and gas development in the area controversial. The Alaska
OCS Region within the Department of the Interior‘s Minerals Management
Service (MMS) oversees oil and gas development in this offshore area.
GAO was asked to examine issues related to oil and gas development in
the North Aleutian Basin. This report (1) describes the basin‘s
estimated quantities of oil and gas and needed infrastructure; (2)
identifies steps MMS is to take to meet federal requirements for oil
and gas development; and (3) identifies challenges, if any, MMS faces
in meeting these requirements in its Alaska OCS Region. GAO analyzed
laws and documents and interviewed representatives from MMS, other
federal agencies, state agencies, industry, and other stakeholders.
What GAO Found:
MMS estimates that substantial amounts of natural gas could exist in
the North Aleutian Basin, although the estimates range widely and the
upper ranges are highly uncertain. MMS estimates that, with existing
conventional techniques, there is a 19 in 20 chance that at least 20
million barrels of oil, and 400 billion cubic feet of natural gas,
exist in the basin but a 1 in 20 chance that as much as 2.5 billion
barrels of oil, and 23.3 trillion cubic feet of natural gas, exist.
MMS officials attribute the estimates‘ wide range to a lack of data.
Although the estimates are much lower than those for other offshore
areas, they are high enough to generate oil industry interest. But
limited infrastructure exists in the basin for oil and natural gas
development, and building the needed infrastructure”such as pipelines,
processing facilities, and a tanker terminal”would likely cost
billions of dollars.
MMS has taken the first of many steps in an extensive process for
meeting federal requirements to develop oil and gas in the North
Aleutian Basin. Under the OCS Lands Act, MMS‘s process for oil and gas
development comprises four stages: (1) preparing a nationwide 5-year
program, (2) planning for and holding a specific lease sale, (3)
approving a company‘s exploration plan, and (4) approving a company‘s
development and production plan. Figuring prominently at each of these
stages, the National Environmental Policy Act (NEPA) requires MMS to
evaluate the likely environmental effects of proposed actions. As of
December 2009, MMS had not proceeded beyond the second stage”the lease
sale stage”in the basin. According to MMS officials, completing all
four stages could take at least 10 more years. Moreover, delays can
occur at any stage; indeed, a number of delays have already occurred
in developing oil and gas in the Alaska OCS Region.
GAO found that MMS faces challenges in the Alaska OCS Region in
carrying out its responsibilities under NEPA. Although Interior policy
directs its agencies to prepare handbooks providing guidance on how to
implement NEPA, MMS lacks such a guidance handbook. The lack of a
comprehensive guidance handbook, combined with high staff turnover in
recent years, has left the process for meeting NEPA requirements ill
defined for the analysts charged with developing NEPA documents. This
absence has also left unclear MMS‘s policy on what constitutes a
significant environmental impact. Furthermore, guidance is also
lacking for conducting and documenting NEPA-required analyses to
address environmental and cultural sensitivities, which have often
been the topic of litigation over Alaskan offshore oil and gas
development. In addition to litigation, MMS has been subjected to
allegations by stakeholders and former MMS scientists of suppression
or alteration of their work on environmental issues. GAO also found
that the Alaska OCS Region shares information selectively. This
practice is inconsistent with agency policy, which directs that
information, including proprietary data from industry, be shared with
all staff involved in environmental reviews. According to regional
staff, this practice has hindered their ability to complete sound
environmental analyses under NEPA.
What GAO Recommends:
GAO recommends that MMS develop additional, comprehensive guidance for
conducting and reviewing environmental analyses and fully implement
agency policy on information sharing. Interior generally agreed with
our findings and fully concurred with our recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-10-276] or key
components. For more information, contact Mark E. Gaffigan at (202)
512-3841 or gaffiganm@gao.gov.
[End of section]
Contents:
Letter:
Background:
The North Aleutian Basin May Contain Substantial Oil and Natural Gas,
but the Amounts Are Highly Uncertain, and Limited Infrastructure
Exists:
Offshore Oil and Gas Development Involves an Extensive Process to Meet
Federal Requirements, and MMS Has Taken the First Steps in the North
Aleutian Basin:
MMS Faces Challenges in Meeting Federal NEPA Requirements in the
Alaska OCS Region:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Comments from the Department of the Interior:
Appendix III: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Estimated Volumes of Undiscovered Technically Recoverable Oil
and Gas in the North Aleutian Basin:
Table 2: MMS's Key Responsibilities during the Four Stages of Offshore
Oil and Gas Development:
Figures:
Figure 1: Alaska and the North Aleutian Basin OCS Planning Area:
Figure 2: The Development of Petroleum:
Figure 3: MMS's Estimates of Technically and Economically Recoverable
Resources of Oil and Gas in the North Aleutian Basin:
Figure 4: Delays in the Oil and Gas Development Process in MMS's
Alaska OCS Region:
Abbreviations List:
MMS: Minerals Management Service:
NEPA: National Environmental Policy Act:
NOAA: National Oceanic and Atmospheric Administration:
OCS: outer continental shelf:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
March 8, 2010:
The Honorable Norman D. Dicks
Chairman:
Subcommittee on Interior, Environment, and Related Agencies:
Committee on Appropriations:
House of Representatives:
Dear Mr. Chairman:
Potentially sizable deposits of oil and gas could lie beneath Alaska's
North Aleutian Basin, a remote undersea region almost the size of the
state of Arkansas. Encompassing the waters of Bristol Bay, the basin
is located just north and west of the Alaska Peninsula. To tap the
basin's resources, the oil industry would operate within the portion
of the North American continental edge that is federally designated as
the outer continental shelf (OCS), a designation extending seaward
from generally 3 geographical miles off the coastline to at least 200
nautical miles. Developing the region's oil and gas, however, has not
been without controversy. The area provides habitat for several
endangered species, and its fisheries are among the richest in the
world. The waters also supply important food sources for Alaska Native
communities that rely on subsistence hunting and fishing. In the wake
of the 1989 Exxon Valdez oil spill, Congress imposed moratoria on oil
and gas exploration and development in the North Aleutian Basin. In
1998, the administration also withdrew the area from oil and gas
drilling. Later, after a push for more domestic oil production,
Congress in 2003 lifted its moratoria, and the administration in 2007
rescinded its withdrawal as well, once again opening the area to
petroleum resource development.[Footnote 1]
Alaska's OCS areas fall under the jurisdiction and management of the
Minerals Management Service (MMS) within the Department of the
Interior, which, through three OCS regional offices, oversees the
mineral and resource development of nearly 2 billion acres of
submerged federal land. MMS's responsibilities include offshore oil
and gas development, which is governed by federal law, primarily the
Outer Continental Shelf Lands Act of 1958, as amended,[Footnote 2] as
well as the National Environmental Policy Act of 1969 as amended
(NEPA).[Footnote 3] Numerous other laws--to protect endangered species
and cultural and historical resources, for example--also apply.
Under the OCS Lands Act, MMS is responsible for leasing federal OCS
lands to meet the nation's energy needs and to generate revenue for
the federal government in a manner that protects the environment. The
OCS Lands Act outlines the process MMS is to follow to conduct
environmental studies, choose areas for development, allow companies
to explore and develop offshore areas, and collect revenues. During
what is known as an oil and gas lease sale, MMS auctions the right for
an oil company to lease specific tracts of the OCS for exploration and
development. Once a company buys the right to lease these OCS lands,
it also pays MMS rent, and if it actually finds and produces oil or
natural gas, it must also pay royalties. To gather the information
necessary to achieve the balance between oil and gas development and
environmental protection, MMS staff prepare environmental analyses
examining the likely environmental effects of specific oil and gas
activities. Throughout the oil and gas development process, decision
makers are required to consider environmental information and to
mitigate adverse environmental effects. NEPA and the OCS Lands Act
require the Secretary of the Interior to consider environmental
information when making key decisions during the oil and gas leasing
process.
You asked us to review issues surrounding oil and gas development in
the North Aleutian Basin. Accordingly, this report (1) describes what
is known about the estimated quantity of oil and gas in the North
Aleutian Basin and the infrastructure needed to develop and deliver it
to market; (2) identifies the key steps MMS is to take to meet federal
requirements and directives for developing offshore oil and gas; and
(3) identifies the challenges, if any, that MMS faces in meeting these
federal requirements in its Alaska OCS Region.
To address these issues, we reviewed relevant laws, regulations,
policies, case law, and other documentation. We interviewed officials
in MMS's headquarters and Alaska OCS Region, as well as officials from
the U.S. Fish and Wildlife Service, the National Oceanic and
Atmospheric Administration's (NOAA) National Marine Fisheries Service
(NOAA Fisheries Service), and the Environmental Protection Agency. We
also spoke with officials from Alaska state agencies, including the
Alaska Department of Natural Resources' Division of Oil and Gas. We
met with representatives from the oil and gas industry;
nongovernmental organizations; and native tribes, associations, and
corporations. We also met with residents and government officials in
communities of Cold Bay, Nelson Lagoon, and Sand Point, Alaska.
Specifically, to determine what is known about the amount of oil and
gas in the North Aleutian Basin, we interviewed MMS geologists and
reviewed MMS's estimates of oil and gas resources. To determine the
key steps MMS takes to meet federal requirements for developing oil
and gas, we interviewed officials from MMS and other federal and state
agencies, and we interviewed industry representatives. To determine
the key challenges MMS faces in meeting federal requirements, we spoke
with staff at MMS headquarters, as well as with staff at the Alaska,
Gulf of Mexico, and Pacific OCS regions. Using semistructured
interview questions, we interviewed all 19 staff in the Alaska OCS
Region's Environmental Assessment and Environmental Studies sections
and reviewed a nonrandom, nongeneralizable sample of 8 of the 11
environmental assessments or environmental impact statements issued by
this office from 2003 through 2008; we also reviewed the 1985
environmental impact statement for the last lease sale proposed for
the North Aleutian Basin. We also spoke with other federal agency
officials at Interior's Office of Environmental Policy and Compliance,
the Council on Environmental Quality, and the Bureau of Land
Management. Appendix I describes our scope and methodology in greater
detail.
We conducted this performance audit from September 2008 to March 2010,
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
Bordered on the north by mainland Alaska and on the south by the
Alaska Peninsula, MMS's 52,234-square-mile North Aleutian Basin Outer
Continental Shelf Planning Area occupies the southeastern corner of
the Bering Sea, including Bristol Bay (see figure 1). Scattered along
its remote coastline are some 20 towns and villages, whose populations
range from 15 to about 2,300.
Figure 1: Alaska and the North Aleutian Basin OCS Planning Area:
[Refer to PDF for image: illustration]
The illustration is a map of the state of Alaska with the North
Aleutian Basin OCS Planning Area highlighted in Bristol Bay.
Sources: MMS and Map Resources (map).
Note: MMS's proposed 2011 lease sale area occupies approximately 9,000
square miles along the southern edge of the larger North Aleutian
Basin OCS Planning Area.
[End of figure]
The basin and its adjacent marine ecosystems are among the most
biologically productive areas in North America, supporting major
commercial fisheries, as well as subsistence economies. According to
NOAA Fisheries Service and others, Bristol Bay supplies a substantial
proportion of several major U.S. fisheries, including king crab,
salmon, Pacific halibut, and pollock. The region is also home to
several seabird and marine mammal species listed as endangered or
threatened under the Endangered Species Act.[Footnote 4]
Natural oil and gas seeps, widely observed on the Alaska Peninsula,
hint at the North Aleutian Basin's underlying potential reserves of
petroleum. Scientists say that petroleum derives largely from marine
ooze--layers of once-living marine organisms that sank and were
covered by sediment and buried at the bottom of ancient seas before
they were exposed to air and biological decay. Over millions of years,
layers of organic matter and layers of sediment built up, the sediment
became rock, and great temperatures and pressures eventually
transformed the organic matter (consisting of complex carbon,
hydrogen, and oxygen molecules) into petroleum (smaller, simpler
hydrocarbon molecules). As petroleum matures, and organic matter
continues to break down, thicker liquids give way to thinner ones, and
very simple, light, gaseous molecules--natural gas--are produced.
Thus, liquid oil and natural gas are often found together. For oil or
gas to accumulate in commercially attractive quantities, sediment-
derived rocks must be present that are porous enough to collect
substantial amounts of petroleum and permeable enough for the
petroleum to flow through; an impermeable cap rock must also be
present to trap and hold the oil and gas in place (see figure 2). In
1983, a consortium of oil companies sank a test well in the North
Aleutian Basin. Data from this well, coupled with additional data from
seismic surveys, confirmed the existence of such geologic
characteristics favorable to oil and gas.[Footnote 5]
Figure 2: The Development of Petroleum:
[Refer to PDF for image: illustration]
Many millions of years ago:
Marine organisms died and accumulated on the ocean floor, where they
were buried under layers of sediment.
Millions of years ago:
Over millions of years, organic matter was subjected to enormous heat
and pressure and chemically transformed from complex compounds of
hydrogen and carbon into the simpler, smaller hydrocarbons that
constitute oil and gas.
Present day:
Economically viable quantities of oil or gas may be extracted by means
of offshore oil platforms in areas where petroleum deposits have
become geologically concentrated.
Source: GAO analysis of MMS and Colorado Geological Survey data.
[End of figure]
In 1982, the Secretary of the Interior ordered the creation of MMS,
consolidating all of Interior's OCS leasing responsibilities into a
single agency.[Footnote 6] This order gave MMS authority over
assessing the nature, extent, recoverability, and value of leasable
minerals on the OCS. To manage OCS energy resources, the Offshore
Energy and Minerals Management program within MMS carries out resource
evaluation and classification, environmental studies and reviews,
lease sales and management, and inspection and enforcement activities.
This program oversees a number of scientific and technical research
efforts and funds scientific studies that contribute to understanding
the potential impacts of OCS oil and gas leasing on human, marine, and
coastal environments. Three OCS regional offices--Alaska, the Gulf of
Mexico, and the Pacific OCS regions--make up Offshore Energy and
Minerals Management, which is administered through MMS's headquarters
in Washington, D.C.[Footnote 7] Each region contains, among others, an
Environmental Studies Section and an Environmental Assessment (or
Environmental Analysis) Section, which are the centers for MMS's
environmental work related to NEPA implementation. These sections
employ a wide array of subject-matter experts in such fields as
geology, marine biology, economics, and oil spill risk assessment. MMS
divides the regions of the OCS into 26 distinct geographical units
called planning areas. The Alaska OCS Region administers the 15
offshore planning areas in Alaska, which, in addition to the North
Aleutian Basin, include the Chukchi Sea and Beaufort Sea planning
areas off Alaska's North Slope and the St. George Basin west of
Bristol Bay.
The North Aleutian Basin May Contain Substantial Oil and Natural Gas,
but the Amounts Are Highly Uncertain, and Limited Infrastructure
Exists:
According to MMS estimates, substantial amounts of natural gas could
exist in the North Aleutian Basin, although estimates vary widely and
the upper ranges are highly uncertain. A number of considerations--
including the costs of establishing the infrastructure needed to
develop oil and gas--factor into the economic viability of petroleum
resource development in the basin.
MMS's Estimates of How Much Oil or Gas Is Technically Recoverable from
the North Aleutian Basin Span a Wide Range:
Derived from computer modeling analyses of a region's geology, MMS's
estimates of what it terms undiscovered technically recoverable
resources--amounts that can be recovered using conventional
techniques--vary widely (see table 1). According to MMS's most recent
estimates, as reported in its 2006 North Aleutian Basin OCS Planning
Area: Assessment of Undiscovered Technically Recoverable Oil and Gas,
the basin's geologic formations are likely to be sources primarily of
natural gas, with about 67 percent of the undiscovered resources
consisting of gas.
Table 1: Estimated Volumes of Undiscovered Technically Recoverable Oil
and Gas in the North Aleutian Basin:
Oil:
F95[A]: 20 million barrels;
Mean (average): 750 million barrels;
F5[B]: 2.5 billion barrels.
Natural gas:
F95[A]: 400 billion cubic feet;
Mean (average): 8.6 trillion cubic feet;
F5[B]: 23.3 trillion cubic feet.
Source: MMS.
Note: MMS typically cites three estimates, associated with three
probabilities--a 95 percent chance; the mean, or average, chance; and
a 5 percent chance--that at least these volumes of oil or gas exist.
The difference between the 95 and the 5 percent estimates illustrates
the degree of uncertainty associated with the estimates for that area.
[A] F95 means a 95 percent chance that the resources will equal or
exceed the given quantity.
[B] F5 means a 5 percent chance that the resources will equal or
exceed the given quantity.
[End of table]
MMS and industry officials attribute the wide range in the North
Aleutian Basin's resource estimates to a lack of geologic information
typically obtained from exploratory drilling and seismic testing.
Seismic data were gathered mostly from the mid-1970s to the late
1980s, and one test well was drilled in 1983. Congressional moratoria
beginning in 1989 and a presidential withdrawal in 1998 suspended
offshore oil and gas development in the North Aleutian Basin, halting
exploratory drilling or testing that could have more thoroughly
characterized the basin's geology. As a result, according to MMS
geologists, MMS's estimates of technically recoverable resources of
oil and gas for the basin are based on data from the one test well and
on seismic data gathered more than 20 years ago without benefit of
today's higher-resolution survey techniques. Over the following
decades, MMS refined its computer models and seismic interpretation
capabilities; these refinements resulted in larger estimates based on
the same data. An oil industry official told us that industry uses the
same methodology as MMS for its own resource estimates, adding that
MMS's estimates are "technically sound and thorough." According to MMS
and industry officials with whom we spoke, data from additional
exploratory wells and seismic tests would be needed to derive more-
definitive estimates of the basin's resources.
MMS's oil and gas estimates for the North Aleutian Basin are
considerably lower than those for other OCS planning areas. According
to MMS's 2006 Assessment of Undiscovered Technically Recoverable Oil
and Gas Resources of the Nation's Outer Continental Shelf, the mean
estimate of the basin's technically recoverable oil resources, for
example, ranks 12th among MMS's 26 OCS planning areas, and the mean
natural gas estimate ranks 9th. Overall, the basin's mean estimate for
technically recoverable natural gas resources (8.6 trillion cubic
feet) is about 2 percent of the mean estimate for all of the U.S. OCS
regions combined.
The Amount of Oil and Gas Considered Economically Recoverable Depends
on a Variety of Factors:
Although the North Aleutian Basin may contain a substantial amount of
oil and gas, only a certain fraction of that amount may be
economically recoverable after factors such as oil and gas prices and
infrastructure costs are considered. To estimate undiscovered
economically recoverable resources, MMS starts with its estimates of
technically recoverable resources and then factors in a range of
possible future economic conditions. Variables such as oil and gas
prices and infrastructure costs influence whether industry would be
able to develop oil and gas. In general, higher future oil and gas
prices make oil and gas development more economically feasible. On the
other hand, higher raw material, labor, and infrastructure costs make
it less feasible.
MMS uses computer models to calculate the economic viability of oil
and gas development under a range of economic assumptions and resource
amounts. The models produce a pair of linked oil and gas estimates for
a given price. Estimates of undiscovered economically recoverable
resources vary directly with oil or natural gas prices: as these
prices fall, estimates of economically recoverable resources can drop
below estimates of technically recoverable resources. For example, at
$80 per barrel of oil and the associated natural gas price of $12.10
per thousand cubic feet, MMS estimates that nearly all of the basin's
technically recoverable oil and natural gas would also be economically
recoverable. In contrast, at $30 per barrel of oil and the associated
natural gas price of $4.54 per thousand cubic feet, MMS estimates that
only a small fraction of the technically recoverable oil and natural
gas would be economically recoverable (see figure 3).[Footnote 8]
Since 2006, when MMS made these paired estimates, natural gas prices
have not risen at the same rate as oil prices, in part because of
recent discoveries of natural gas in, for example, shale rocks once
thought to be technically too hard to drill into. According to an MMS
official, the agency will account for this disparity in its next
official oil and gas estimate.
Figure 3: MMS's Estimates of Technically and Economically Recoverable
Resources of Oil and Gas in the North Aleutian Basin:
[Refer to PDF for image: 2 horizontal bar graphs]
Oil:
Price of oil: Technically recoverable;
Minimum volume: 19 million barrels;
Maximum volume: 2,505 million barrels;
Mean volume: 753 million barrels.
Price of oil: Economically recoverable at $80/bbl[A];
Minimum volume: 19 million barrels;
Maximum volume: 2,468 million barrels;
Mean volume: 738 million barrels.
Price of oil: Economically recoverable at $46/bbl;
Minimum volume: 11 million barrels;
Maximum volume: 2,180 million barrels;
Mean volume: 631 million barrels.
Price of oil: Economically recoverable at $30/bbl;
Minimum volume: 2 million barrels;
Maximum volume: 1,371 million barrels;
Mean volume: 378 million barrels.
Price of oil: Economically recoverable at $18/bbl;
Minimum volume: 0;
Maximum volume: 200 million barrels;
Mean volume: 45 million barrels.
Gas:
Price of gas: Technically recoverable;
Minimum volume: 0.4 trillion cubic feet;
Maximum volume: 23.38 trillion cubic feet;
Mean volume: 8.62 trillion cubic feet.
Price of gas: Economically recoverable at $12.10/Mcf[B];
Minimum volume: 0.392 trillion cubic feet;
Maximum volume: 22.767 trillion cubic feet;
Mean volume: 8.396 trillion cubic feet.
Price of gas: Economically recoverable $6.96/Mcf;
Minimum volume: 0.132 trillion cubic feet;
Maximum volume: 16.548 trillion cubic feet;
Mean volume: 5.852 trillion cubic feet.
Price of gas: Economically recoverable $4.54/Mcf;
Minimum volume: 0.001 trillion cubic feet;
Maximum volume: 2.78 trillion cubic feet;
Mean volume: 0.909 trillion cubic feet.
Price of gas: Economically recoverable $2.72/Mcf;
Minimum volume: 0;
Maximum volume: 0.053 trillion cubic feet;
Mean volume: 0.017 trillion cubic feet.
Source: GAO analysis of MMS data.
[A] Prices of oil are given in dollars per barrel (bbl).
[B] Prices of gas are given in dollars per thousand cubic feet (Mcf).
[End of figure]
Before developing oil or gas in the North Aleutian Basin, industry
must first find economically recoverable amounts of oil and natural
gas, which can be an uncertain and costly endeavor. A study prepared
for one oil company estimates that about 10 exploration wells would be
needed to ascertain the presence of reserves in the North Aleutian
Basin, and a company official told us that exploration wells could
cost more than $100 million each. As an example of the risk involved
in oil and gas exploration on the Alaska OCS, in the mid-1980s, after
spending $426 million to acquire 96 leases in the St. George Basin
planning area (west of the North Aleutian Basin planning area), oil
companies drilled 10 exploration wells and found no economically
recoverable amounts of oil and gas. According to one industry
official, there could be only a 10 to 20 percent chance of finding
substantial amounts of oil and gas in the North Aleutian Basin, which
is not unusual for a frontier area like the basin.
Even if industry were to find substantial oil and gas in the basin,
billions more dollars would need to be invested in infrastructure for
development and production. Some infrastructure, including a 10,000-
foot runway in Cold Bay, exists near the basin to support oil and gas
development, although MMS's hypothetical development scenario for the
basin includes the following infrastructure, which does not exist in
the region:
* four to six offshore oil and gas development platforms,
* undersea oil and natural gas pipelines to bring the oil and gas to
an offshore hub,
* 25 miles of undersea pipeline from the offshore hub to the northern
coast of the Alaska Peninsula,
* 50 miles of overland pipeline across the Alaska Peninsula to Balboa
Bay,
* a liquefied-natural-gas plant in Balboa Bay,[Footnote 9]
* a tanker terminal in Balboa Bay for liquefied-natural-gas and oil
tankers, and:
* liquefied-natural-gas tankers to transport the natural gas to the
U.S. West Coast.
Building such infrastructure--as other natural gas projects have
shown--is expensive. For example, costs for developing the natural gas
field off the coast of Sakhalin Island, Russia, have exceeded $20
billion. In 2001, MMS cited an estimate for constructing a liquefied-
natural-gas facility and marine terminal at Valdez, Alaska, of nearly
$3 billion (in 1999 dollars). The developer of a proposed liquefied-
natural-gas plant in British Columbia, Canada, has estimated that this
project would cost about $4 billion. According to MMS geologists, the
cost of constructing the infrastructure needed to develop North
Aleutian Basin oil and gas is likely to be in the billions of dollars.
Industry is nevertheless interested in developing North Aleutian Basin
petroleum resources. During the surge in energy prices through the mid-
2000s, 17 companies expressed interest in a lease sale in the basin.
Although oil and natural gas prices have now declined from those
peaks, an oil company official told us that recent fluctuations in
energy prices have little bearing on his company's interest in the
basin. He said that his company takes the long view, seeing the North
Aleutian Basin as an area that will probably not begin production for
at least another 10 or 15 years but could potentially remain in
production for another 25 years. In other words, the quantities may
well offer a substantial incentive to companies to bid on a lease sale
and take the substantial monetary risk to explore and perhaps develop
the basin.
Offshore Oil and Gas Development Involves an Extensive Process to Meet
Federal Requirements, and MMS Has Taken the First Steps in the North
Aleutian Basin:
In planning and managing offshore oil and gas development to meet its
requirements under federal law, MMS follows a long and complex series
of steps combining resource development with assessing potential
environmental and cultural impacts. Throughout this process, MMS is to
meet the federal requirements articulated in the OCS Lands Act--which
outlines four stages for oil and gas development--while also complying
with NEPA and other laws aimed at protecting environmental and
cultural resources at each stage. MMS officials stated that it would
take at least 10 years to complete all four stages.
MMS Has Numerous Responsibilities under the OCS Lands Act and Other
Key Federal Laws:
During offshore oil and gas development, MMS has numerous
responsibilities under several federal laws. Under the OCS Lands Act,
MMS's process for oil and gas development consists of the following
stages: (1) preparing a nationwide 5-year oil and gas development
program, (2) planning for and holding a specific lease sale, (3)
approving a company's exploration plan, and (4) approving a company's
development and production plan. Within these four stages, several
other laws--NEPA, in particular, along with the Endangered Species Act
and Magnuson-Stevens Fishery Conservation and Management Act, among
others--require that potential effects of offshore oil and gas
development on environmental and cultural resources be addressed (see
table 2). For instance, under the Endangered Species Act, MMS must
consult with the U.S. Fish and Wildlife Service and NOAA Fisheries
Service about the potential impact of oil and gas activities, such as
accidental oil spills or seismic exploration, on threatened and
endangered species.
Table 2: MMS's Key Responsibilities during the Four Stages of Offshore
Oil and Gas Development:
Stage: Stage 1: Preparing a nationwide 5-year program;
Law: OCS Lands Act;
Responsibilities: Interior to prepare and maintain a national oil and
gas leasing program, which consists of a 5-year schedule indicating
the size, timing, and location of proposed offshore leasing activities.
Stage: Stage 1: Preparing a nationwide 5-year program;
Law: NEPA;
Responsibilities: MMS begins process of identifying and assessing the
likely environmental impacts of the proposed 5-year program.
Stage: Stage 2: Planning for and holding a specific lease sale;
Law: OCS Lands Act;
Responsibilities: Interior solicits bids and then awards leases for
offshore areas identified in the 5-year program.
Stage: Stage 2: Planning for and holding a specific lease sale;
Law: Stage: NEPA;
Responsibilities: Stage: MMS to evaluate the likely environmental
impacts of the proposed oil and gas lease sale.
Stage: Stage 2: Planning for and holding a specific lease sale;
Law: Stage: Endangered Species Act;
Responsibilities: Stage: MMS to consult with the U.S. Fish and
Wildlife Service or NOAA Fisheries Service if there is reason to
believe that the lease sale could adversely affect a federally
protected species or its habitat[A].
Stage: Stage 2: Planning for and holding a specific lease sale;
Law: Stage: Magnuson-Stevens Fishery Conservation and Management Act;
Responsibilities: Stage: MMS to consult with NOAA Fisheries Service if
a lease sale could adversely affect essential fish habitat, which is
generally defined as areas necessary to fish for spawning, breeding,
feeding, or growth to maturity.
Stage: Stage 2: Planning for and holding a specific lease sale;
Law: National Historic Preservation Act;
Responsibilities: MMS to take into account the effect of a proposed
oil and gas lease sale on any historic property included, or eligible
for inclusion, in the National Register of Historic Places;
such properties include those on the ocean floor, such as
archaeological sites.
Stage: Stage 3: Approving a company's exploration plan;
Law: OCS Lands Act;
Responsibilities: Interior to consider a lessee's exploration plan for
approval before a lessee may begin exploration activities.
Stage: Stage 3: Approving a company's exploration plan;
Law: Stage: NEPA;
Responsibilities: Stage: MMS to evaluate the likely environmental
impacts of proposed exploration activities.
Stage: Stage 3: Approving a company's exploration plan;
Law: Coastal Zone Management Act;
Responsibilities: MMS to ensure that proposed exploration activities
are consistent to the maximum extent practicable with states' coastal
zone management programs.
Stage: Stage 4: Approving a company's development and production plan;
Law: OCS Lands Act;
Responsibilities: Interior to consider a lessee's development plan for
approval before a lessee may begin any development and production
activities.
Stage: Stage 4: Approving a company's development and production plan;
Law: Stage: NEPA;
Responsibilities: Stage: MMS to evaluate the likely environmental
impacts of proposed development and production activities.
Stage: Stage 4: Approving a company's development and production plan;
Law: Coastal Zone Management Act;
Responsibilities: MMS to ensure that proposed development and
production activities are consistent to the maximum extent practicable
with states' coastal zone management programs.
Source: GAO analysis of federal laws.
[A] The U.S. Fish and Wildlife Service has the responsibility for
implementing the Endangered Species Act for all terrestrial and
freshwater species, as well as for polar bears, walrus, sea otters,
and sea turtles when on land and all birds, including seabirds. NOAA
Fisheries Service is responsible for implementing the Endangered
Species Act for most marine fish, such as salmon; cetaceans (whales
and dolphins); pinnipeds (seals and sea lions); and other marine life.
[End of table]
Under NEPA, federal agencies are to evaluate the likely environmental
effects of actions they propose to carry out or to permit. NEPA has
two principal purposes: (1) to ensure that an agency carefully
considers detailed information concerning significant environmental
impacts and (2) to ensure that this information will be made available
to the public.[Footnote 10] Specifically, before initiating any oil
and gas planning, leasing, exploration, or development activities, MMS
is to evaluate likely environmental effects. Generally, the scope of
those activities requires MMS to use either an environmental
assessment (a concise analysis developed if the environmental impact
of the proposed action is unknown or has the potential to be
significant) or, if the actions are likely to affect the environment
significantly, a more detailed environmental impact statement.
[Footnote 11] The regulations for environmental impact statements
include multiple opportunities for public comment and require plans
for mitigating the impacts. Environmental assessments and
environmental impact statements are intended to help decision makers
understand the environmental consequences associated with proposed
activities, such as those associated with oil and gas exploration and
development.
For the North Aleutian Basin, MMS Has Implemented the First Stage
under the OCS Lands Act and Begun the Second Stage:
In 2007, MMS issued a 5-year program under the OCS Lands Act, stage 1,
and, as of December 2009, was planning a North Aleutian Basin lease
sale under stage 2. For the basin, the agency has not moved beyond
stage 2.
Stage 1: MMS Included the North Aleutian Basin in Its 2007-2012 5-Year
Program:
To develop a 5-year program under the OCS Lands Act, MMS is to
consider several principles, including future national energy needs,
location-specific factors such as "environmental sensitivity and
marine productivity," and balance between the potential for oil and
gas discovery and adverse environmental and coastal impacts; MMS must
also conduct leasing activities to ensure a fair monetary return to
the federal government. In addition, MMS is to seek comments from
various state and public stakeholders and to prepare and release an
environmental impact statement evaluating the likely effects of the 5-
year program. During the nearly 2 years between announcement of plans
to develop the 2007-2012 program and the time the program went into
effect in July 2007, MMS completed the environmental impact statement
and held numerous public meetings with stakeholders across the
country, including several in communities near the North Aleutian
Basin. In recognition of the basin's ecological and natural resources,
MMS also convened a meeting of scientific experts and other
stakeholders to help determine what information was available and what
information was needed about the basin and about potential oil and gas
leasing and development activities.[Footnote 12]
In 2007, MMS finalized its 2007-2012 5-year program. The program was
legally challenged under the OCS Lands Act in 2008, and the Alaska
portion was sent back by the court to the agency for further action.
The challenge, brought on various grounds, related to oil and gas
exploration and production in the Beaufort, Bering, and Chukchi seas.
In April 2009, the District of Columbia Circuit Court of Appeals held
that MMS had relied on an insufficient environmental sensitivity
assessment in preparing its analysis under the OCS Lands Act.
Specifically, the court found that MMS's comparison of the
environmental sensitivity of different areas of the OCS was incomplete
because it examined only the effects of oil spills on shorelines and
failed to look at offshore effects as well. The court directed MMS to
redo its environmental sensitivity assessment and reassess the timing
and location of planned leasing before any leasing activities could
occur on the Alaska OCS, including in the North Aleutian Basin.
Accordingly, as of October 2009, MMS had completed an expanded
environmental sensitivity assessment, which includes analysis of
offshore resources such as marine mammals, birds, and fish. As of
February 2010, a decision by the Secretary of the Interior on the
status of the 2007-2012 program--including the planned 2011 lease sale
in the North Aleutian Basin--was pending, and no further Alaska OCS
lease sales could occur until the Secretary had issued this decision.
To incorporate other offshore leasing areas that were recently opened
to development, MMS in August 2008 proposed a new draft 5-year
program, for the period 2010-2015. The proposed new program includes
two lease sales in the North Aleutian Basin, the one already slated
for 2011 and another in 2014. MMS released its draft of this program
in January 2009 for public comment, and the Secretary of the Interior
extended this comment period for an additional 180 days, to September
21, 2009. As of November 2009, MMS was still evaluating the proposed
program. When this evaluation is finished, MMS is to submit
recommendations to the Secretary for approval, which would include a
decision on both lease sales in the North Aleutian Basin.
Stage 2: MMS Has Begun Planning for a Specific Lease Sale in the North
Aleutian Basin:
After final approval of a 5-year program, MMS may hold lease sales
under the OCS Lands Act for the areas included in that program. Laws
protecting environmental and cultural resources--such as marine and
coastal birds, wetlands, and subsistence harvest by Alaska Natives--
figure prominently at this stage. Under NEPA, before holding a lease
sale, the agency is to evaluate the proposed sale's likely
environmental effects, describing various alternatives for oil and gas
development and their potential impacts. In addition, since oil and
gas development could potentially affect species protected by the
Endangered Species Act, MMS must also consult with the U.S. Fish and
Wildlife Service and NOAA Fisheries Service to assess the likely
effects on threatened and endangered species. To mitigate any adverse
effects, these agencies may make recommendations for modifying MMS's
proposed activity.
As of December 2009, MMS was proceeding with lease sale planning for
the North Aleutian Basin. Working in cooperation with the Aleutians
East Borough,[Footnote 13] the Alaska OCS Region anticipates releasing
an environmental impact statement in July 2010 for public comment.
Once MMS has issued its final environmental impact statement--and
provided that litigation over the 2007-2012 5-year program has been
resolved and the program has been approved--MMS anticipates that a
lease sale for the North Aleutian Basin will occur in November 2011.
MMS has also begun consulting with the U.S. Fish and Wildlife Service
and NOAA Fisheries Service on threatened and endangered species, such
as the North Pacific right whale. Officials from these agencies have
indicated that their interaction with MMS has at this stage been
limited, but they and MMS anticipate more consultation as MMS proceeds
further into the lease sale planning process. Until the 2011 lease
sale is held, however, MMS remains in stage 2 for the North Aleutian
Basin.
Stage 3: After Holding a Lease Sale, MMS Is to Consider an Exploration
Plan for Approval:
Before allowing a lessee to explore for oil and gas in its leased
area, MMS is to review and approve the lessee's exploration plan, in
accordance with the OCS Lands Act, and complete a NEPA analysis. The
exploration plan describes all exploration activities planned by the
lessee, including the location of wells and timing of activities.
After MMS receives an exploration plan, it has 30 days to approve,
disapprove, or require modifications to the plan. NEPA again comes
into play before MMS can approve an exploration plan. MMS generally
performs an environmental assessment to assess the impacts of
activities such as drilling test wells or conducting seismic surveys.
If the environmental assessment indicates that the planned activities
would significantly affect the environment, as defined under NEPA, the
agency prepares an environmental impact statement and may seek
modifications to the exploration plan. In addition, MMS may coordinate
with the U.S. Fish and Wildlife Service and NOAA Fisheries Service to
ensure that MMS and lessees comply with the Marine Mammal Protection
Act. MMS is also to ensure that the exploration plan is consistent
with the affected state's coastal zone management program. If, as
planned, MMS holds a lease sale for the North Aleutian Basin in 2011--
and barring unforeseen delays--industry exploratory activities are
unlikely to begin in the basin earlier than 2012 or 2013.
Stage 4: After Exploration, MMS Is to Consider a Development and
Production Plan for Approval:
MMS is to review, consider, and approve a lessee's development and
production plan before allowing a lessee to proceed past the
exploration stage. Should a lessee decide to proceed with development
and production on its leases, the development and production plan it
submits to MMS is to describe the number of wells the company plans to
drill and where these wells will be located, the type of structures to
be used, and how oil and natural gas will be transferred to shore.
Under the OCS Lands Act, MMS is to assess environmental impacts in
considering this plan and also to ensure that the development plan is
consistent with the affected state's coastal zone management plan. On
the basis of the final environmental analysis, MMS is to approve,
disapprove, or seek modifications to the development and production
plan, as needed. After approval, the lessee would have to submit
applications for a host of other plans and permits, such as permits
for pipelines, platforms, and air or water emissions. In addition,
activities to construct infrastructure and facilities, such as
overland pipelines, a liquefied-natural-gas plant, and a tanker
terminal--which would be necessary to develop the North Aleutian
Basin--involve long and complex permitting processes of their own. For
example, for a new onshore liquefied-natural-gas facility, as many as
100 permits and approvals may be required from various federal, state,
and local government agencies. Given these considerations, MMS
estimates that in an ideal situation, without any unforeseen delays,
the first oil production in the North Aleutian Basin would not occur
until at least 2020, and the first gas production would not occur
until 2025.
Delays Can Occur at Each Stage:
Delays can occur at any--and have occurred at most--of the OCS Lands
Act's four-stage oil and gas development process in the Alaska OCS
Region (see figure 4). MMS officials have told us, for example, that
it can take more than 10 years to complete all four stages, even
without delays. In part because MMS's Alaska OCS Region oversees oil
and gas development in a place that is not only environmentally
sensitive but also relied on by Alaska Natives for subsistence hunting
and fishing, a number of legal challenges have taken place over the
past 2 decades. In addition, other delays have halted the oil and gas
development process. For example, MMS conducted a lease sale for the
North Aleutian Basin in October 1988. But after the Exxon Valdez oil
spill in 1989, the federal government suspended oil and gas
development in the basin for nearly 20 years through congressional and
presidential actions. As a result, the leases awarded in the 1988
lease sale were never explored or developed, and Interior bought back
the inactive leases in 1995.
Figure 4: Delays in the Oil and Gas Development Process in MMS's
Alaska OCS Region:
[Refer to PDF for image: illustration]
Oil and gas development process: Develop 5-year program (stage 1);
Solicit comments;
Draft proposed program
Conduct NEPA analysis;
Announce 5-year program;
Examples of past delays: Alaska portion of the 2007-2012 5-year
program sent back by the courts to the agency for further action in
2009.
Oil and gas development process: Plan and hold lease sale (stage 2);
Call for information;
Conduct NEPA analysis;
Hold lease sale;
Issue leases;
Examples of past delays: Lease sale held in North Aleutian Basin in
1988; moratorium on oil and gas development in the basin imposed by
Congress in 1989; presidential withdrawal issued in 1998.
Oil and gas development process: Approve lessee‘s exploration plan
(stage 3);
Lessee submits plan;
MMS conducts NEPA analysis and reviews plan;
MMS approves plan;
Lessee conducts exploration activities;
Examples of past delays: One oil company‘s Beaufort Sea exploration
plan challenged in court in 2007.
Oil and gas development process: Approve lessee‘s development and
production plan (stage 4);
Lessee submits plan;
MMS conducts NEPA analysis and reviews plan;
MMS approves plan;
Lessee begins development and production;
Examples of past delays:
No economically recoverable amounts of oil or gas found after
exploratory drilling in St. George Basin in mid-1980s.
Source: GAO analysis.
Note: NEPA analysis figures prominently at each of the four oil and
gas development stages. MMS has not proceeded beyond stage 2 in the
North Aleutian Basin.
[End of figure]
MMS Faces Challenges in Meeting Federal NEPA Requirements in the
Alaska OCS Region:
MMS's Alaska OCS Region faces several challenges in carrying out its
responsibilities under NEPA, in particular, in providing comprehensive
NEPA guidance and, within the regional office, ensuring sharing of
information needed to complete NEPA analyses.
MMS Lacks Comprehensive NEPA Implementation Guidance:
Interior's policy manual requires its agencies to prepare NEPA
handbooks providing guidance on how to implement NEPA in an agency's
principal program areas.[Footnote 14] MMS, however, has not yet issued
comprehensive guidance in the form of a NEPA handbook, although it has
provided limited guidance and is consolidating and further developing
this guidance. The agency has posted NEPA guidance on its Web site,
but this guidance is general in nature and does not outline key steps
that environmental assessment staff are to take in implementing the
law. For example, the guidance provides one paragraph about assessing
environmental impacts of oil and gas activities, not detailed
instructions that could lead an analyst through the process of
drafting an environmental assessment or environmental impact
statement. The Web site directs MMS analysts to NEPA guidance intended
for all Interior agencies, but this guidance is not tailored to MMS's
principle program areas, including offshore oil and gas development.
In particular, relevant MMS guidance does not address key factors for
staff to consider in analyzing environmental impacts, such as the
significance of the environmental effects of proposed actions, the
region's cultural and environmental sensitivities, or procedures to be
followed during management reviews of NEPA analyses.
According to MMS officials, MMS has not developed a comprehensive NEPA
guidance handbook, in part because the agency is small and can rely
instead on institutional knowledge and also because they believe a
handbook would be difficult to keep current. They added that, unlike
other Interior agencies that have NEPA handbooks, such as the U.S.
Fish and Wildlife Service, MMS has fewer field offices across the
country and fewer staff writing NEPA documents. Managers in the Alaska
OCS Region told us that they rely on institutional knowledge of
experienced staff to help new staff learn the process. Yet the Alaska
OCS Region's Environmental Assessment Section has experienced high
staff turnover in recent years. From 2003 to 2008, 11 to 50 percent of
the analysts in that section left each year, resulting in nearly
complete turnover within a staff that ranged from 10 to 14 people.
Only 2 of the 11 Environmental Assessment staff we interviewed in May
2009 had been in the office longer than 3.5 years, and more than half
the staff had been in the office less than 1.5 years.
The lack of a comprehensive NEPA guidance handbook, combined with high
staff turnover, leaves the process for meeting NEPA requirements ill
defined for the analysts charged with developing NEPA documents. For
example, nearly half of the 11 analysts in the Environmental
Assessment Section, in particular, told us that the process for
writing NEPA analyses is unclear and that a NEPA handbook would help.
Several analysts, recalling prior experience in other Interior
agencies that had handbooks, said that having a handbook clarified
ambiguity and offered step-by-step guidance. We spoke with the two
then-current[Footnote 15] and two former NEPA coordinators--staff
hired to direct the NEPA process in the Alaska OCS Region--who all
stated that the lack of guidance made it very difficult to do their
job. All four coordinators had had previous NEPA experience but told
us that they were not given adequate guidance on how MMS is to
implement NEPA with respect to its own program areas.
The lack of a comprehensive NEPA guidance handbook also leaves unclear
MMS's policy on what constitutes a significant environmental impact.
Determining whether an impact is significant is important because such
determinations may trigger additional requirements for federal
agencies. Senior officials at the Council on Environmental Quality
[Footnote 16]--which oversees and works with agencies in reviewing and
approving their NEPA procedures and has issued regulations on when a
federal action significantly affects the environment under NEPA
[Footnote 17]--told us that they encourage agencies to develop
"rigorous and replicable" criteria for what constitutes a significant
effect. As an example, officials in the council cited the Federal
Aviation Administration's work with a professional society to
systematically develop and set quantitative criteria for significant
environmental effects from aircraft noise. Nevertheless, we found
considerable variation among MMS's OCS regions in how they assess what
constitutes a "significant" environmental impact. For example,
according to a manager in MMS's Pacific OCS Region, which manages oil
and gas development in Southern California, the Pacific region defines
significance criteria--such as biologically important effects on
species' behavior patterns--for assessing the significance of an
impact on a given environmental resource because such criteria help
the public understand MMS's logic in environmental assessments and
environmental impact statements, including how the agency weighed
information in coming to its conclusions. In contrast, although MMS's
Alaska OCS Region defined significance criteria in an environmental
impact statement as recently as 2007,[Footnote 18] Alaska OCS Region
management officials told us they no longer plan to do so. For
example, the region's most recent draft environmental impact statement
on lease sales in the Beaufort and Chukchi seas, issued in November
2008, defines "impact descriptors"--"negligible, minor, moderate, and
major"--and states that it will not use a "significance threshold," or
"line in the sand."[Footnote 19] Alaska OCS Region officials explained
that explicit significance criteria are difficult to develop because
they must be species specific; criteria must also be developed for
economic effects. For example, they noted, the inability to recover
from harm after one generation may be significant for one species,
whereas the inability to recover after three generations may be
significant for another. MMS headquarters officials also observed that
the relative dearth of information on some of the region's species
makes it even more difficult to develop significance criteria. Given
the triggering effect of the term significant in NEPA analyses,
however, without explicit criteria specifying what constitutes a
significant impact, it can be unclear how the Alaska OCS Region
decides whether and when triggers have been met.
In addition, the lack of a comprehensive NEPA guidance handbook that
details procedures for preparing and documenting NEPA-required
analyses to address environmental and cultural concerns leaves MMS
vulnerable in litigation stemming from those concerns.[Footnote 20] As
the agency has acknowledged, in recent years, MMS has been the target
of at least nine lawsuits challenging its decision making, generally
with regard to the adequacy of the agency's environmental analysis.
When deciding NEPA cases, the courts may examine an agency's
thoroughness in executing the NEPA process, including the steps the
agency follows in preparing environmental analyses and drawing
conclusions based on those analyses. For example, in 2008 the Ninth
Circuit Court of Appeals voided MMS's approval of one oil company's
exploration plan for the Beaufort Sea.[Footnote 21] In that case, the
court found that MMS's conclusions in its environmental assessment of
the plan did not follow from the rest of the analysis. Specifically,
the court explained, after "lengthy discussion on concerns and gaps in
the data, the [environmental assessment's] abrupt conclusion that any
potential effects will be insignificant is unsubstantiated." As a
result, the oil company withdrew this exploration plan and submitted a
new one, and MMS had to prepare a new environmental analysis of the
revised exploration plan, resulting in, according to estimates by the
Energy Information Administration, at least a 3-year delay--after the
company had already spent hundreds of millions of dollars preparing
for exploration--and considerable rework for both parties.
In addition to litigation, MMS has also been vulnerable to allegations
by stakeholders and former MMS scientists of suppression or alteration
of their work on environmental issues. Some former MMS scientists, for
example, have alleged that their scientific analyses were removed or
altered during reviews by Alaska OCS Region management officials.
[Footnote 22] For example, an internal MMS e-mail refers to text
drafted by a subject-matter expert for a 2006 environmental
assessment, warning that nonnative species introduced to Alaskan
waters may become invasive and suggesting specific measures to
mitigate the ecological impacts of such introductions. As documented
by Public Employees for Environmental Responsibility, the analysis of
invasive species was deleted during management review. In the final
draft of the 2006 environmental assessment,[Footnote 23] the
discussion of the topic was moved into a section titled "Resources Not
Considered Further," indicating that the potential effects of invasive
species merited no further examination. According to the subject-
matter expert who drafted this text, MMS management officials made
their revisions over his objections, without providing documentation
that supported their revisions. Although management may have had valid
reasons for these revisions, absence of a process, spelled out in a
NEPA guidance handbook, for how MMS staff is to review scientific
findings and document these reviews has subjected MMS to allegations
of scientific misconduct.
Within the Alaska OCS Region, Information Is Selectively Shared:
On the basis of past directives issued by the Office of Management and
Budget and by Interior, MMS headquarters in April 2008 issued an
agencywide policy memorandum outlining its overarching policy on
information use and sharing. The memorandum is explicit about the
types of information to be shared and with whom. Specifically, the
memorandum directs that all reports submitted by industry--including
proprietary information--should be shared within one working day with
MMS staff involved in environmental analyses. The memorandum states
that proprietary data must be protected from inappropriate release to
parties outside of MMS and directs MMS managers to ensure that staff
are thoroughly familiar with the agency's procedures for sharing such
data.
In addition, in an attempt to clarify agency policy for ensuring that
scientific quality is maintained throughout decision making, the
memorandum specifies that management revisions to environmental
analyses are to be finalized only after documented discussions take
place with the relevant subject-matter experts. The memorandum further
directs regional offices to document procedures for communicating with
and soliciting feedback from subject-matter experts on any revisions
management deems necessary, so as to ensure the quality of both the
final analysis and any conclusions based on that analysis.
We found, however, that practices within the Alaska OCS Region were
not consistent with the policy outlined in this memorandum; rather,
information was shared selectively. Indeed, in speaking with Alaska
OCS Region staff and, later, with regional management officials, we
found that the 2008 memorandum itself was not shared beyond management-
level officials until we asked the managers about it.[Footnote 24] We
found instead that the Alaska OCS Region shares information--including
information related to NEPA analyses--on a need-to-know basis. In a
July 2008 e-mail to Alaska OCS Region managers, the official who
oversees the Alaska OCS Region's Environmental Studies and
Environmental Assessment sections described procedures for sharing
proprietary as well as nonproprietary information among the staff in
these sections and between sections. This e-mail identified a single
staff member as "the designated recipient" for several types of
reports and information, both proprietary and nonproprietary.
According to the e-mail, access by other Alaska OCS Region staff was
to be on a need-to-know basis, as determined by regional management,
and documented by signed confidentiality statements. Although the e-
mail listed several classes of reports that the designated recipient
was to receive, this designated recipient told us that he routinely
received only one class of reports--those from marine mammal observers
placed on industry ships. He did not receive other listed reports,
even if he was asked to comment on the environmental impacts of
actions in those reports.
The Alaska OCS Region's information-sharing practices contrast with
practices in other MMS regions. MMS headquarters officials said that
in an agency as small as MMS,[Footnote 25] the "need to know" does not
apply; although staff must know what information is proprietary and
how to handle it, they must also work together and have a free flow of
information. Likewise, a Pacific OCS Region manager said it is
essential for all analysts to have access to all information,
including proprietary information. According to a Gulf of Mexico OCS
Region manager, analyses in environmental assessment drafts prepared
by that regional office are always completed by subject-matter experts
in the field being analyzed, and all analysts asked to comment on
draft text in their area of expertise are provided access to relevant
information, including proprietary information. The office does not
require confidentiality statements from staff working on environmental
analyses, although it does restrict information access to staff
working on a given project.
In explaining their information-sharing practices, Alaska OCS Region
managers told us that a need-to-know policy allows them to properly
protect proprietary information. They also said that they need to
manage access to lease-sale scenario information--for example, numbers
of wells, pipelines, and so on, which provide a feasible set of
conditions for purposes of environmental analysis--so that everyone
involved in NEPA analyses works from identical scenarios. Alaska OCS
Region managers further explained that, in part because of MMS's heavy
workload overall, they feel they have to manage staff time so
deadlines can be met.[Footnote 26] Our interviews with staff analysts
in the Environmental Assessment Section, however, indicated that they
believed that these information-sharing practices hindered their
ability to complete sound environmental analyses under NEPA. For
example, five of them reported that they and other subject-matter
experts had had difficulty obtaining clear development scenario
information, including, for at least one analyst, specific scenario
information on the proposed 2011 North Aleutian Basin lease sale. As a
result, the analyst said, he was not certain where a pipeline would
cross the Alaska Peninsula or what other infrastructure would be
needed, which made it difficult for him to determine the impacts of
the proposed lease-sale for the forthcoming environmental impact
statement.
Conclusions:
No matter where it occurs, oil and gas development can be a high-risk,
high-reward endeavor with numerous potential monetary and nonmonetary
costs--for the nation, local communities, industry, and ecosystems--
particularly in remote offshore areas such as the North Aleutian
Basin. Although MMS has, over the years, faced delays that were
largely out of its control, it can control the quality and integrity
of its environmental analyses. For instance, Interior directs its
agencies to prepare NEPA handbooks providing guidance on how to
implement NEPA; MMS, however, has not issued such a handbook. As a
result, the agency cannot ensure the consistent implementation of NEPA
within or across regional offices, and it leaves itself vulnerable
with regard to litigation and allegations of scientific misconduct.
Moreover, MMS directs its OCS regions to share industry data and
proprietary reports with staff involved with NEPA-required
environmental analyses and discuss any management revisions to an
analysis with relevant subject-matter experts. The Alaska OCS Region,
however, does not share information in accordance with this policy,
and some of its own scientists have alleged that their findings have
been suppressed. Comprehensive, detailed NEPA guidance, along with
full implementation of its 2008 information-sharing policy, could
strengthen MMS's NEPA analyses and enhance the agency's credibility
among stakeholders as it strives to achieve balance between oil and
gas development and environmental protection.
Recommendations for Executive Action:
To help MMS meet federal requirements in assessing environmental
impacts of offshore oil and gas development, we recommend that the
Secretary of the Interior direct the Director of the Minerals
Management Service to strengthen the agency's NEPA procedures and
ensure implementation of its agencywide April 2008 information-sharing
policy by taking the following two actions:
* Develop and set a deadline for issuing a comprehensive NEPA handbook
providing guidance on how to implement NEPA and periodically update
and revise this guidance as needed. Such guidance should detail
procedures for conducting and documenting NEPA-required analyses,
including how determinations of significance are to be made and how
scientific findings are to be reviewed.
* Take appropriate steps to ensure that the Alaska OCS Region follows
the policy for sharing or otherwise making information, including
proprietary information, available to all staff involved in the
technical or environmental review of that information.
Agency Comments:
We provided a draft of this report to the Department of the Interior
for review and comment. The department generally agreed with our
findings and fully concurred with our recommendations. In its written
comments, Interior described steps it plans to take to implement these
recommendations. With regard to our first recommendation about issuing
a comprehensive NEPA handbook, Interior wrote that MMS will issue
comprehensive NEPA guidance and bring all guidance documents together
in one place. According to the letter, MMS has determined that Web
distribution would be most effective to ensure the guidance is
accessible and readily revisable. This guidance is to be issued by
December 31, 2010, and used by MMS headquarters and regions alike. In
addressing our second recommendation on information sharing, Interior
wrote that MMS will take appropriate steps to ensure that the Alaska
OCS Region follows MMS's 2008 policy for making information available,
including proprietary information. Interior's letter states that the
Alaska OCS Region is to issue a directive to all MMS Alaska employees,
describing the general responsibilities of supervisors and managers,
as well as specific steps employees must take if they find any
deficiency with respect to their ability to do their jobs. Finally,
this directive is also to define accountability for compliance with
its provisions. Appendix II reproduces Interior's comment letter in
full.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to the
Secretary of the Interior, the Director of the Minerals Management
Service, appropriate congressional committees, and other interested
parties. In addition, this report will be available at no charge on
the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff members have any questions about this report,
please contact me at (202) 512-3841 or gaffiganm@gao.gov. Contact
points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this report. GAO staff who made major
contributions to this are listed in appendix III.
Sincerely yours,
Signed by:
Mark E. Gaffigan:
Director, Natural Resources and Environment:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
The objectives of this review were to (1) describe what is known about
the estimated quantity of oil and gas in the North Aleutian Basin and
the infrastructure needed to develop and deliver it to market; (2)
identify the key steps the Minerals Management Service (MMS) is to
take to meet federal requirements and directives for developing oil
and gas on the outer continental shelf (OCS); and (3) identify the
challenges, if any, MMS faces in meeting these federal requirements in
its Alaska OCS Region.
To address these objectives, we reviewed relevant laws, regulations,
policy memorandums, case law, and other documentation. We also met
with MMS officials at the headquarters and Alaska OCS Region offices
to obtain estimates of oil and gas quantities in the North Aleutian
Basin, as well as information pertaining to federal requirements for
and challenges to developing oil and gas in the North Aleutian Basin.
In addition, we interviewed federal officials from the U.S. Fish and
Wildlife Service, the National Oceanic and Atmospheric
Administration's (NOAA) National Marine Fisheries Service (NOAA
Fisheries Service), and the Environmental Protection Agency. We also
spoke with officials from Alaska state agencies, including the Alaska
Department of Environmental Conservation, Department of Fish and Game,
and Department of Natural Resources. For perspectives from entities
that are directly involved in North Aleutian Basin issues, we met with
representatives from the oil and gas industry; environmental
organizations; and native tribes, associations, and corporations. We
also met with residents and government officials in the communities of
Cold Bay, Nelson Lagoon, and Sand Point, Alaska.
To describe estimated quantities of oil and gas in the North Aleutian
Basin, we interviewed geologists in MMS's Alaska OCS Region who were
knowledgeable about the processes MMS uses to estimate OCS resources,
and we reviewed the reports disseminated by MMS containing its
estimates for oil and gas resources in the North Aleutian Basin. In
addition, we met with representatives from two petroleum companies
that operate in Alaska.
To identify the key steps MMS is to take to meet federal requirements
and directives for developing oil and gas, we reviewed several laws,
including the Outer Continental Shelf Lands Act, National
Environmental Policy Act (NEPA), Coastal Zone Management Act,
Endangered Species Act, and Marine Mammal Protection Act, among
others. We reviewed relevant regulations and notices published in the
Federal Register and other agency documentation. We interviewed
officials in MMS's headquarters and Alaska OCS Region who are
knowledgeable about the steps MMS takes to comply with the regulatory
framework for offshore oil and gas development. We also spoke with
officials from the U.S. Fish and Wildlife Service and NOAA Fisheries
Service about the extent to which they have begun consultations with
MMS regarding a potential lease sale in the North Aleutian Basin.
Additionally, we spoke with officials from the Alaska Department of
Environmental Conservation, Department of Fish and Game, and
Department of Natural Resources. We also spoke with representatives of
the Aleutians East Borough about their perspectives on oil and gas
development in the basin and their cooperation with MMS in developing
an environmental impact statement for a North Aleutian Basin lease
sale.
To identify the challenges, if any, that MMS faces in meeting federal
requirements in the Alaska OCS Region, we spoke with MMS headquarters
and Alaska OCS Region management officials and separately interviewed
analysts in the Alaska office. Specifically, during May 2009, we
conducted individual interviews with all 19 staff in the Alaska OCS
Region's Environmental Assessment and Environmental Studies sections,
using a set of semistructured interview questions developed with the
assistance of a GAO survey specialist. Our interview questions were
open-ended in nature and covered a range of broad topics, including
(1) how MMS obtains and incorporates necessary information into its
environmental assessments, (2) the steps MMS takes to ensure
objectivity in its assessments, and (3) the parts of the NEPA process
that function well at MMS and those in need of improvement. We also
held some follow-up interviews to clarify issues raised during the
initial interviews. We performed a content analysis to identify common
themes across the 19 interviews. Additionally, we reviewed a
nonrandom, nongeneralizable sample of 8 of the 11 environmental
assessments or environmental impact statements issued by this office
from 2003 through 2008; we also reviewed the 1985 environmental impact
statement for the last lease sale proposed for the North Aleutian
Basin, as well as other technical reports obtained from the Alaska OCS
Region. To compare practices across MMS regions, we spoke with
officials from MMS's Gulf of Mexico and Pacific OCS regions. We also
spoke with officials at the Department of the Interior's Office of
Environmental Policy and Compliance, the Council on Environmental
Quality, the Bureau of Land Management, and the U.S. Geological
Survey. To determine staff turnover in the Alaska OCS Region, we
reviewed staffing data for calendar years 2000 through 2008. According
to MMS, the staffing data came from the Federal Personnel Payroll
System, which handles payroll and personnel data for federal agencies.
To assess the reliability of these staffing data, we sent questions to
MMS officials knowledgeable about the database and performed basic
logic testing for obvious inconsistencies in the data's accuracy and
completeness. We determined that these data were sufficiently reliable
for our limited use of them in this report.
We conducted this performance audit from September 2008 to March 2010,
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Department of the Interior:
United States Department of the Interior:
Office Of The Secretary:
Washington, DC 20240:
March 1, 2010:
Mr. Mark Gaffigan:
Director, Natural Resources and Environment:
Government Accountability Office:
441 G Street, NW:
Washington, D.C. 20548:
Dear Mr. Gaffigan:
Thank you for the opportunity to review and comment on the Government
Accountability Office (GAO) draft report entitled, Offshore Oil and
Gas Development: Additional Guidance Would Help Strengthen the
Minerals Management Service's Assessment of Environmental Impacts in
the North Aleutian Basin (GA0-10-276). In the draft report, GAO makes
two recommendations for the Minerals Management Service (MMS). The
Department generally agrees with your findings, fully concurs with
your two recommendations, and will implement them as indicated below.
National Environmental Policy Act (NEPA) Guidance: The MMS will issue
comprehensive NEPA guidance and is working to finalize pending
guidance and bring all guidance documents together in one place. The
MMS has determined that Web-based distribution would be most effective
to ensure that all guidance is easily accessible, readily revisable,
and scalable to the appropriate level of detail. Such guidance will be
issued by December 31, 2010, and used by MMS's Headquarters and
Regions alike and will he revised as needed.
Information Sharing: The MMS will take appropriate steps to ensure
that the Alaska Outer Continental Shelf (OCS) Region follows the 2008
MMS policy for making information available, including proprietary
information, to all staff involved in the technical or environmental
review of that information. The Alaska OCS Region will issue a
directive to all MMS Alaska employees. The directive will clearly
describe the general responsibilities of supervisors and managers,
including the responsibility to ensure employees are provided with all
information required to effectively and efficiently perform their
duties and responsibilities. Additionally, the directive will describe
the specific steps that employees must take if they find any
deficiency with respect to their ability to do their jobs, including
the inability to access proprietary information when necessary for
adequate technical or environmental reviews. Finally, the directive
will define accountability for compliance with its provisions.
We appreciate GAO's insights and recommendations to strengthen MMS's
assessment of environmental impacts in the North Aleutian Basin. If
you have any questions, please contact Andrea Nygren, MMS Audit
Liaison Officer, at (202) 208-4343.
Sincerely,
Signed by:
Wilma A. Lewis:
Assistant Secretary:
Land and Minerals Management:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Mark E. Gaffigan, (202) 512-3841 or gaffiganm@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Ernie Hazera, Assistant
Director; Pedro Almoguera; Eric Bachhuber; Ellen W. Chu; Cindy
Gilbert; Karen Keegan; Joshua Ormond; Madhav S. Panwar; Katrina Pekar-
Carpenter; Jena Sinkfield; Kiki Theodoropoulos; Barbara Timmerman;
Stephanie Toby; and Arvin Wu made key contributions to this report.
[End of section]
Footnotes:
[1] Petroleum exists in both liquid and gaseous forms. Throughout this
report, we refer to the liquid forms as "oil" and to the gaseous forms
as "gas" or "natural gas"; we refer to the companies that develop both
resource forms as "oil" companies.
[2] 43 U.S.C. §§ 1331-1356.
[3] Pub. L. No. 91-190, 83 Stat. 852 (1970).
[4] The Endangered Species Act defines a species as endangered if it
faces extinction throughout all or a significant portion of its range
and as threatened if it is likely to become endangered in the
foreseeable future. The act excludes recognized insect pests from this
definition.
[5] Seismic surveys are an important method of exploring for oil and
gas. Using sound reflected from the earth under the sea, they allow
geologists and geophysicists to map subsurface geologic structures and
identify conditions favorable for trapping oil and gas resources.
[6] Department of the Interior, Secretarial Order 3071 (Jan. 19, 1982).
[7] In December 2009, the Secretary of the Interior announced plans to
establish a new Atlantic OCS Region office in 2010. Regional directors
are responsible to the Associate Director for Offshore Energy and
Minerals Management for overall direction and integration of the NEPA
process into their activities and for NEPA compliance in their regions.
[8] At the end of February 2010, the market price of oil was $78.91
per barrel, and the price of natural gas was $5.08 per thousand cubic
feet.
[9] Transporting natural gas from the North Aleutian Basin to markets
on the West Coast would require liquefying the natural gas. Liquefying
natural gas reduces its volume by more than 600 times, making it more
practical to store and transport.
[10] See, for example, Robertson v. Methow Valley Citizens Council,
490 U.S. 332, 349 (1989).
[11] A proposed federal action may be categorically excluded from a
detailed environmental analysis if it meets certain criteria that a
federal agency has previously determined as having no significant
environmental impact. 40 C.F.R. 1508.4.
[12] The Alaska OCS Region's Environmental Studies Section has used
the findings from this meeting to choose research to fund in the
Bering Sea. From 2006 through 2009, MMS funded six studies focused on
the North Aleutian Basin, totaling more than $6.2 million, and plans
to start another five studies in fiscal year 2010.
[13] Equivalent to a county in the contiguous 48 states, the Aleutians
East Borough is located on the Alaska Peninsula, adjacent to the North
Aleutian Basin. The borough is cooperating with MMS to identify
mitigation measures for the potential lease sale.
[14] Department of the Interior, Department Manual, part 516, chapter
6 (6.4.A.1) (2004).
[15] We spoke with the two Alaska OCS Region staff members who were
the NEPA coordinators as of May 2009; according to MMS, both
coordinators have since left their positions.
[16] The Council on Environmental Quality is an office within the
Executive Office of the President tasked with the development of
environmental policies and initiatives.
[17] 40 C.F.R. § 1508.27.
[18] Minerals Management Service, Final Environmental Impact
Statement: Oil and Gas Lease Sale 193 and Seismic Surveying Activities
in the Chukchi Sea, OCS EIS/EA MMS 2007-026 (Anchorage, 2007).
[19] Minerals Management Service, Draft Environmental Impact
Statement: Beaufort and Chukchi Sea Planning Areas: Oil and Gas Lease
Sales 209, 212, 217, and 221, OCS EIS/EA MMS 2008-0055 (Anchorage,
2008).
[20] In Center for Biological Diversity v. Interior [563 F. 3d 466 (D.
C. Cir. 2009)], the D.C. Court of Appeals sent the Alaska portion of
MMS's 2007-2012 OCS 5-year leasing program to Interior for additional
analysis of relative environmental sensitivity and marine
productivity. A second lawsuit, Native Village of Point Hope v.
Salazar [No. 1:08-cv-00004-RRB (D. Alaska)], challenged a specific
lease sale (lease sale 193) in the Chukchi Sea under the prior 5-year
leasing program. Further action on both these suits was stayed pending
the Secretary of the Interior's completion of the required analysis.
In December 2009, two suits were filed concerning lease sale 193,
challenging an oil company's exploration plan approved by MMS on
October 16, 2009. A coalition of environmental and Alaska Native
groups filed a petition for review in the Ninth Circuit Court of
Appeals on December 15, 2009, alleging that MMS failed to adequately
consider potential impacts of that decision in violation of NEPA, the
OCS Lands Act, and the Endangered Species Act. A second lawsuit was
filed the same day on similar grounds by another Alaska Native group
and the Alaska Eskimo Whaling Commission.
[21] Alaska Wilderness League et al. v. Kempthorne, 548 F.3d 815 (9th
Cir. 2008). The court later vacated and withdrew its opinion without
explanation. Alaska Wilderness League et al. v. Kempthorne, 559 F. 3d
916 (9th Cir. 2009). Subsequently, the court dismissed the appeal as
moot because the exploration plan had been withdrawn and MMS had
rescinded its prior approval of the plan. Alaska Wilderness League et
al. v. Kempthorne, 571 F.3d 859 (9th Cir. 2009). See also Minerals
Management Service, Alaska OCS Region, Environmental Assessment: Shell
Offshore Inc., Beaufort Sea Exploration Plan, OCS EIS/EA, MMS 2007-009
(Anchorage, 2007).
[22] Internal MMS e-mails and draft documents from current and former
MMS scientists have been made public by the organization Public
Employees for Environmental Responsibility--a national nonprofit
alliance of local, state, and federal scientists; law enforcement
officers; land managers; and other professionals--whose stated mission
is to uphold environmental laws and values.
[23] Minerals Management Service, Final Programmatic Environmental
Assessment: Arctic Ocean Outer Continental Shelf Seismic Surveys,
2006, OCS EIS/EA MMS 2006-038 (Anchorage, 2006).
[24] When we asked then-current Alaska OCS Region Environmental
Assessment Section staff in July 2009 if they knew about the
memorandum, we found that only 1 person out of the 12 whom we asked
was aware of it. Shortly after we spoke with management officials, an
e-mail went out to all Alaska OCS Region staff, notifying them of the
memorandum and including an intranet link to its location.
[25] MMS has about 1,800 employees and 3 regional offices responsible
for oil and gas development, as compared with, for example, Interior's
Bureau of Land Management, which has a budgeted total of about 10,600
full-time-equivalent employees and 32 field offices involved in oil
and gas development.
[26] MMS's OCS program workload has increased in recent years.
Interior's Fiscal Year 2008 Annual Performance and Accountability
Report cited MMS as issuing nearly twice as many leases nationwide in
2008 as in 2006, without any growth in related staff.
[End of section]
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