Since Spill, Feds Have Given 27 Waivers to Oil Companies in Gulf

Published on
by
McClatchy Newspapers

Since Spill, Feds Have Given 27 Waivers to Oil Companies in Gulf

by
Marisa Taylor

WASHINGTON — Since the Deepwater Horizon oil drilling rig exploded
on April 20, the Obama administration has granted oil and gas companies
at least 27 exemptions from doing in-depth environmental studies of oil
exploration and production in the Gulf of Mexico.

The waivers were granted despite President Barack Obama’s vow that his
administration would launch a “relentless response effort” to stop the
leak and prevent more damage to the gulf. One of them was dated Friday
— the day after Interior Secretary Ken Salazar said he was temporarily
halting offshore drilling

The exemptions, known as “categorical exclusions,” were granted by the
Interior Department’s Minerals Management Service (MMS) and included
waiving detailed environmental studies for a BP exploration plan to be
conducted at a depth of more than 4,000 feet and an Anadarko Petroleum
Corp. exploration plan at more 9,000 feet.

“Is there a moratorium on off shore drilling or not?” asked Peter
Galvin, conservation director with the Center for Biological Diversity,
the environmental group that discovered the administration’s continued
approval of the exemptions. “Possibly the worst environmental disaster
in U.S. history has occurred and nothing appears to have changed.”

MMS officials said the exemptions are continuing to be issued because they do not represent final drilling approval.

To drill, a company has to file a separate application under a process
that is now suspended because of Salazar’s order Thursday.

However, officials could not say whether the exemptions would stand once the moratorium is lifted.

MMS’ approvals are expected to spark new criticism of the troubled
agency and the administration’s response to the spill.

Salazar
announced Thursday that there’d be no new offshore drilling until the
Interior Department completes the safety review process requested by
Obama. The department is required to deliver the report to the
president by May 28.

Given the MMS approvals, however, Galvin said the administration’s pledge appears disingenuous.

“It looks to me like they’re misleading the public,” he said.

MMS spokesman David Smith said his agency conducts a thorough review
before it determines whether to grant such exemptions.

“It’s not a rubber stamp,” he said.

BP did not return calls for comment.

MMS set out rules that allow for the exemptions from some environmental
requirements under the National Environmental Policy Act (NEPA) as long
as the sites in question are not relying on new or unusual technology,
or within high seismic risk areas, or within the boundaries of marine
sanctuaries or in regions with hazardous bottom conditions. MMS also
assesses the impact on biological and archeological resources.

In the gulf, Smith said, MMS has a “wealth of environmental data” from
studies of the region that it can rely on when reviewing the requests
from the energy firms.

That’s why oil and gas companies that
were given the exemptions said the approvals were routine and shouldn’t
have raised any environmental concerns.

Apache Corp. said it
was granted four exemptions for updating production equipment and
drilling wells on existing sites and for drilling in the vicinity of an
existing site. Appropriate environmental studies were conducted before
the purchase of the leases for those sites, said Bill Mintz, a
spokesman with Apache.

“We followed the procedures and the government didn’t change the
procedures,” said Mintz. “The decisions are made according to rules in
a framework that has been established.”

Anadarko also cited a previous environmental assessment of a site where it applied for a waiver.

“Protecting the environment and the safety of our personnel are our
highest priorities,” said John Christiansen, a Anadarko spokesman,
Walter Oil & Gas also received one for a survey of an existing site
off the coast of Louisiana.

 

Environmentalists,
however, say that MMS’ checklist for determining whether to grant such
exemptions are far too broad and relies on sweeping environmental
impact studies that are undertaken before the purchase of leases.

Holly Doremus, a professor of law at Boalt Hall, University of
California at Berkeley, said MMS has had a culture of minimizing
environmental reviews of oil and gas development dating back to its
inception in 1982.

“That’s related to the fact that oil
companies have a great deal of power over MMS and there hasn’t been
much oversight,” she said. “My guess is that these things are routinely
being signed off on as categorical exclusions even though they deserve
a closer look.”

Other companies that received the waivers
include: Shell, Kerr-McGee Oil & Gas Corporation, Royal Exploration
Company, Inc., MCX Gulf of Mexico, Tana Exploration Company, Tarpon
Operating & Development, Rooster Petroleum, Phoenix Exploration
Company, and Hall-Houston Exploration III.

Tracy L. Austin,
spokeswoman for Mitsubishi International Corporation, which owns MCX
Gulf of Mexico, said she could not comment on MMS’ handling of the
exemptions overall.

“While we understand that the MMS has come
under criticism for failing to adequately regulate the industry, with
respect to our operations, we believe the MMS has acted responsibly,”
she said.

Lawmakers from both sides of the aisle have already
called for reform of MMS after news that BP was granted on exemption
for the Deepwater Horizon site. That waiver was first reported by the
Washington Post.

“If the conclusion is we need new regulation
to prevent something like this from happening again, we’d welcome that
because we believe we operate in a safe and environmentally responsible
manner,” said Mintz with Apache. “But right now, the current rules say
certain activities can proceed based on the studies that have been
done.”

In 2008, a series of government watchdog reports
implicated a dozen current and former employees of the MMS in
inappropriate or unethical relationships with industry officials.

The
reports described "a culture of substance abuse and promiscuity'' in
the Royalty in Kind program, in which the government forgoes royalties
and takes a share of the oil and gas for resale instead. From 2002 to
2006, nearly a third of the RIK staff socialized with and received
gifts and gratuities from oil and gas companies.

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