US is toughening scrutiny of deepwater drilling

[August 17, 2010]  WASHINGTON (AP) -- The government said Monday it is toughening environmental reviews for all new deepwater oil drilling, ending an easy path to oil riches that allowed BP to drill its blown-out well in the Gulf of Mexico with little federal scrutiny.

The step is meant to help redress a history of lax oversight leading up to the April 20 explosion that killed 11 workers and led to the worst oil spill in U.S. history. Some 206 million gallons spilled into the Gulf before BP stopped the leak at the Macondo well.

A report by the White House Council on Environmental Quality found that decades-old data provided the basis for exempting BP's drilling permits from any extensive environmental review.

Now the Interior Department is banning such "categorical exclusions" for deepwater drilling reviews, at least until it investigates how the exemptions are granted.

"Our decision-making must be fully informed by an understanding of the potential environmental consequences of federal actions permitting offshore oil and gas development," Interior Secretary Ken Salazar said in a statement.

For now, new deepwater drilling is under a temporary moratorium in the Gulf. Once that's lifted, though, Interior's new policy is likely to make it much more time-consuming for oil companies to move forward with new deepwater projects, since environmental assessments will be required along the way.

Such assessments typically include a discussion of the need for the project and a look at its environmental impacts, mitigation and possible alternatives, among other things. They are a step short of a full-blown "environmental impact statement" that would include a more in-depth study of environmental impacts and allow more time for public comment. An environmental assessment can determine whether an environmental impact statement is needed.

Shallow-water drilling will also be subjected to stricter environmental scrutiny under the new policy.

BP's ability to get environmental exemptions from the Minerals Management Service led to some of the harshest criticism of the now-defunct agency.

The report by the Council on Environmental Quality sheds new light on the granting of those categorical exclusions. The report says that the exclusions BP operated under were written in 1981 and 1986. That was long before the boom in deepwater drilling that was propelled by the development of dramatic new technologies for reaching deep into the sea floor.

The report also finds other problems with how the Minerals Management Service applied environmental laws in reviewing the BP project. It notes, for example, that in assessing the likelihood of a major spill, MMS did not consider the example of the disastrous 1979 Ixtoc spill in the Gulf -- simply because the spill was not in U.S. waters.

MMS' successor agency, the Bureau of Ocean Energy Management, Enforcement and Regulation, is agreeing to the report's recommendations to try to improve gas and oil drilling oversight, including pushing for more time to review exploration plans, and performing more comprehensive site-specific environmental reviews.

The American Petroleum Institute said Interior's new rules on environmental reviews could create unnecessary delays without added environmental protection.

Rep. Nick Rahall, D-W.Va., chairman of the House Natural Resources Committee, applauded the steps announced by Salazar while calling for more far-reaching reform. The Center for Biological Diversity welcomed the announcement but found it lacking, saying that ongoing projects that might have been approved under faulty processes would not necessarily be subject to additional scrutiny.

The announcement came as the fall shrimping season opened Monday in Louisiana's coastal waters, a step toward normalcy for coastal towns that have seen their vital fisheries closed for four months.

Retired Coast Guard Adm. Thad Allen, leading the government's oil-spill response, said it will take at least a week to permanently plug the well with mud and cement once he gives the go-ahead for the "bottom kill." He said he is not sure when that will happen, because scientists are working on ways to perform the kill without further damaging the well.

[Associated Press; By ERICA WERNER]

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