Best Practices for NEPA Compliance and Related Permitting for Projects on Indian Lands

Best Practices for NEPA Compliance and Related Permitting for Projects on Indian Lands

Kurt SchweigertSenior ConsultantAugust 26, 2014

Best Practices for NEPA Compliance and Related Permitting for Projects on Indian Lands

Brief Historical Context for NEPA NEPA Process NEPA Compliance for Oil, Gas, and Pipeline

Industries in Regional and Montana Contexts The evolving nature of NEPA and potential

application to oil & gas development on trust lands Common issues and BMPs for managing NEPA on

Indian lands

NEPA in Historical ContextYear Law Lead Federal Agency

1966 National Historic Preservation Act (NHPA) National Park Service, Advisory Council on Historic Preservation

1969 National Environmental Policy Act (NEPA) Council on Environmental Quality (CEQ)

1970 Environmental Protection Agency (EPA) created

1970 Clean Air Act (CAA) EPA, U.S. Army Corps of Engineers

1973 Environmental Species Act (ESA) U.S. Fish & Wildlife Service (FWS), National Oceanic and Atmospheric Administration (NOAA).

1976 Toxic Substance Control Act (TSCA) EPA

1976 Resource Conservation and Recovery Act (RCRA) EPA

1980 Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA)

EPA

NEPA in Historical ContextEvolution of NEPA, 1969-2014

1969 -- NEPA legislation provided for establishment of the President’s Council on Environmental Quality (CEQ) as an independent regulatory agency. The Act became law on January 1, 1970.

1970 – Executive Order 11514 directed CEQ to issue regulations to federal agencies for the implementation of the procedural provisions of the Act (42 U.S.C. 4332(2)).

1971 – CEQ issues initial guidelines for implementation of the Act.

1977 -- Executive Order No. 11991 gave CEQ authority to issue regulations that would be binding on all federal agencies. CEQ issued regulations in 1978 that became binding in 1979 (40 CFR Parts 1500-1508, as amended).

2005 – CEQ issues updated/revised regulations. All EISs and associated comments are required to be filed with the EPA ((40CFR§1506.9).

2011 – CEQ issues guidance “Appropriate Use of Mitigation and Monitoring and Clarifying the Appropriate Use of Mitigated Findings of No Significant Impact

2014 – CEQ issues draft guidance “Effective Use of Programmatic NEPA Reviews”

NEPA ProcessAs originally defined by CEQ and Federal agencies, the NEPA process consists of three steps:1. Conduct a preliminary screening for NEPA’s applicability (further NEPA

analysis may not required for proposed actions that are considered “categorical exclusions,” or that have been sufficiently addressed in previous NEPA analysis.

2. Prepare an Environmental Assessment (EA) to determine whether an Environmental Impact Statement (EIS) is required; and

3. Prepare an EIS if required (an EIS is required if a proposed action may “significantly affect the quality of the human environment”).

NEPA ProcessSignificance of environmental impacts includes consideration of Context. This means that the significance of an action

must be analyzed in several contexts such as society as a whole (human, national),the affected region, the affected interests, and the locality.

Severity of impact to public health or safety unique characteristics of the geographic area such as proximity to park

lands, prime farmlands, wetlands, wild and scenic rivers, or ecologically critical areas

cultural resources or other significant scientific resources endangered or threatened species or its habitat that has been determined

to be critical under the Endangered Species Act

NEPA Process (con’t)Significance of environmental impacts includes consideration of The degree to which the effects on the quality of

the human environment are likely to be highly controversial

Whether the action may establish a precedent for future actions with significant effects

Whether the action is related to other actions with individually insignificant but cumulatively significant impacts

NEPA ProcessProject Definition

NEPA Applicability?

Yes No Categorical Exclusion (CatEX)

Determination of NEPA Adequacy (DNA)

Environmental Assessment (EA)

Finding of No Significant Impact (FONSI)

Environmental Impact Statement (EIS)

Record of Decision (ROD)

NEPA Process Elements of the environment commonly

addressed for NEPA include: Social and economic

conditions Environmental Justice Public health and safety Surface and groundwater

resources Air quality Cultural resources Threatened, endangered,

and candidate species Other Wildlife

Vegetation and invasive species

Recreation Soils Visual resources Geology and geological

resources Wetlands Land use Roads and utilities

Applicability to Federal and Indian LandsCompliance with NEPA is required for upstream oil and gas operations when Land surface is administered by a Federal agency

Usually the BLM or USFS, but can be any Federal land-managing agency

Land surface or minerals are owned by Indian tribes or individual Indian allottees and held in trust by the United States Bureau of Indian Affairs (BIA) is responsible for NEPA on trust lands

Minerals are in Federal ownership, regardless of land surface ownership BLM is responsible for permitting of exploration and development

of all Federal minerals, including minerals held in trust for tribes and Indian allotees

Applicability to Federal and Indian Lands

Responsible Federal agencies must consider the potential effects of their actions on the human environment prior to initiating the actions. For upstream and midstream oil and gas, Federal actions include: Leasing of minerals Approval of Applications for Permit to Drill (APDs) Approval of Surface Use Plans Review and acceptance of rights-of-way and other

permits on Federal and Indian trust lands


Federal Lands in the Western U.S.Excluding Tribal and Bureau of Reclamation Lands

341,955,500 acres of Federal and Tribal surface ownership in these states

424,700,000 acres of Federal and Tribal mineral ownership in these states

Applicability to Federal and Indian LandsMontana 27.2 million

acres of Federal and Indian surface ownership – 29%

38.7 million acres of Federal and Indian mineral ownership – 40%


Region CO MT ND NM SD UT WYEIS NOIs 2011-2014 160 37 28 12 17 9 20 37Project SectorFederal Facilities 9 0 0 1 7 1 0 0Generation/ Transmission 24 5 3 4 1 2 3 6Mining 21 4 4 0 2 1 3 7Natural Resources Mgt 58 14 17 2 2 4 6 13Oil/Gas E&P 18 6 0 1 2 0 3 6Pipelines 11 0 1 3 1 0 3 3Transportation 5 0 2 0 0 1 1 1Other 14 8 1 1 2 0 1 1

NOIs for EIS Starts 2011-2014

EIS Starts in Region, 2011-2014

The Evolving NEPA Landscape for Federal and Indian Lands in Montana

Oil and gas development in Montana and the region will involve more Federal and Indian lands as private lands and minerals are worked through

Permitting for drilling on Federal and especially Indian trust lands is far more time consuming and expensive than permitting on fee lands, largely due to NEPA compliance

results include less competition and lower bonuses for leases, delays in bringing prospects to production, and impacts without proportional benefits on Indian reservations because fee lands and minerals are drilled first.

Workloads are likely to increase for already stretched BLM, USFS, and BIA personnel who deal with NEPA


Reality: Industry and Federal agencies are necessarily partners in NEPA compliance BLM, USFS, BIA are responsible for NEPA compliance but generally

don’t have resources to do the research and prepare the documents, at least as quickly as operators would prefer

Evolving technical issues – sage grouse/other species, air emissions – increasingly involve other Federal agencies in the NEPA process, usually in agency-to-agency consultation

Oil and gas operators have a vested interest in clearing the NEPA hurdles in a timely manner at least possible cost, and operators have funding and staff resources

Operators also generate much of the information necessary for environmental evaluations


Environmental Impact Statements Typically take years to prepare – average now is around 5

years, depending on a number of factors Start with an implication that significant environmental

impacts may occur Generally cover large areas, such as entire basins Often start with a Plan of Development (POD) that is already

well developed and therefore somewhat rigid – and changes to a POD typically cause delays and additional expense, especially after drafts of the EIS are released for public comment

The Evolving NEPA Landscape for Federal and Indian Lands in MontanaEnvironmental Assessments Are traditionally intended to determine whether a proposed action

would result in a significant environmental impact, and therefor a need for an EIS.

Typically are done for single wells or a small number of wells, a specific smaller pipeline, a gathering system, or a facility such as a gas plant.

Typically are too narrowly focused to allow cumulative impacts to be addressed adequately, particularly for impacts that extend beyond the locality, such as air emissions, species health, and socio-economic impacts.

Tend to be highly redundant and of little applicability for other similar developments.

The Evolving NEPA Landscape for Federal and Indian Lands in MontanaMovement toward Programmatic NEPA Documents

CEQ has always recommended that NEPA be incorporated in early project planning:

Agencies shall integrate the NEPA process with other planning at the earliest possible time to insure that planning and decisions reflect environmental values, to avoid delays later in the process, and to head off potential conflicts (40CFR§1501.2).

Programmatic NEPA analysis Is an effective method of “right-sizing” the geographic

scope of a NEPA document to address the type of project and especially cumulative impacts

Is an established tool to address broad-scale agency programs


On August 22, 2014, CEQ published draft guidance “Effective Use of Programmatic NEPA Reviews” (www.whitehouse.gov/administration/eop/ceq).

Programmatic Reviews Are appropriate for broad or program level actions, or for projects

with multiple similar actions that are expected to occur over time. Provide a basis for effective tiering of EAs or EISs for specific

projects. Provide a “jumping off point” for analysis of cumulative and indirect

impacts, that often cannot be adequately addressed at lower or tiered levels of NEPA analysis.

Provide a basis for inter-agency coordination, particularly regarding compliance with other laws and regulations.

The Evolving NEPA Landscape The new CEQ guidance includes these points: Programmatic reviews can be terminal NEPA documents, such as for agency

policies for herbicide use, or “umbrella” documents that address environmental

issues common to multiple subsequent activities, but that anticipate a more refined analysis that focuses on the particular environmental factors for specific activities.

The Evolving NEPA Landscape

The new CEQ guidance includes these points: Collaboration and cooperation among Federal agencies,

tribes, and state and local governments is especially critical for successful completion of meaningful programmatic NEPA reviews.

Engaging the public is particularly important when developing programmatic NEPA reviews in order to ensure agency objectives are understood and to clarify how a programmatic review relates to subsequent tiered reviews.

The Evolving NEPA Landscape The new CEQ guidance includes these points:

Programmatic approaches are usually associated with ElSs; however

An agency may prepare a Programmatic Environmental Assessment (PEA) to determine whether an ElS is required or when considering a proposal that does not have significant impacts at the programmatic level.

Following a PEA that results in a FONSI, an agency may tier to an EA that results in a finding of no significant impact, or may tier to an ElS when a subsequent site- or project- specific proposal has the potential for a significant impact on the environment.

The Evolving NEPA Landscape Preparation of a PEA may be the preferred approach to NEPA for oil and gas development on Indian lands in Montana because Few NEPA documents have been done for oil and gas

development on Indian reservations that are sufficient to allow tiering for individual projects.

A PEA allows and requires cooperation among multiple agencies. At a minimum, permitting a well on trust lands requires coordination among the BIA regional and agency offices, the BLM, the Tribes, EPA, and the U.S. Fish & Wildlife Service.

Many of the environmental conditions are likely to be consistent across large geographic areas of reservations and/or are likely to concern reservation-wide social and economic impacts.

The Evolving NEPA Landscape In addition to regulatory efficiency, a programmatic approach on Indian lands would help level the playing field with oil and gas development on non-trust lands Costs and timeframes for permitting wells and associated

infrastructure would decrease Design, construction, and reclamation requirements would be

known to potential operators Certainty would increase for planning drilling and

development schedules

The Evolving NEPA Landscape Pertinent Example of a PEA for Indian lands:

A PEA is nearing completion for 1,740 proposed oil wells on trust lands on the Fort Berthold Reservation in North Dakota Cooperation among 8 operators, BIA, EPA, USFWS, Tribes Enthusiastic support from the Three Affiliated Tribes Extensive scoping to explain the PEA process and invite public

input on environmental issues Drilling was not delayed during preparation of the PEA Collateral benefit is a Programmatic Biological Assessment

that satisfies requirements of the Endangered Species Act for those wells

Best Practices for NEPA Compliance for Oil and Gas Development on Indian LandsIn addition to the lack of programmatic level NEPA documents, some other issues commonly encountered in accomplishing NEPA on Indian lands are: The relationship between the Tribes and BIA Distrust of oil companies and their consultants Unfamiliarity with and non-compliance with tribal laws Lack of consideration of environmental constraints during

project planning Choice of an EA or EIS for well field level NEPA review Delays and uncertain timeframes for reviews and decisions

Best Practices for NEPA Compliance for Oil and Gas Development on Indian LandsIssue 1: The relationship between the Tribes and BIARecommended BMP: Understand that the Tribes and the Bureau of Indian Affairs (BIA) are not the same thing, they have substantially different roles in the leasing and permitting processes, and coordination with both is critical. Tribes are sovereign nations that have self-determination

rights to manage their resources and be consulted regarding potential impacts to culturally important sites both within and outside reservation boundaries.

The BIA has trust responsibilities for Tribes and tribal members, including ensuring compliance with NEPA.

Best Practices for NEPA ComplianceIssue 2: Distrust of oil companies and their consultantsRecommended BMPs: Get to know your tribal hosts and bring them on board Introduce yourself and your personnel who are likely to

interact with tribal members, to the chairman, the council, and committees that address mineral and business development.

As soon as a drilling or development plan is roughed out, meet with the tribes’ mineral manager, the natural resources director, and the tribal chairman to showcase the plan

In company with the tribal chairman, request a tribal resolution supporting the drilling or development plan

Offer multiple scoping meetings and contact information throughout the NEPA project

Best Practices for NEPA ComplianceIssue 3: Non-compliance with tribal lawsRecommended BMPs: Ensure that any required business license, Tribal Employment Rights Ordnance (TERO), and other tribal permits are obtained and kept current. Determine whether your contractors are covered under

your TERO license; if not, require proof of the contractors’ compliance before allowing work on the reservation. NEPA itself is primarily a desk-top exercise, but associated biological, cultural resource, and other field investigations are subject to TERO licensing.

Work with the TERO office to determine if tribal members have skill sets and experience suitable for employment on your projects.

Best Practices for NEPA Compliance for Oil and Gas Development on Indian Lands

Issue 4: Lack of consideration of environmental constraints during project planning

Recommended BMPs: Conduct a constraints analysis for environmental

factors as part of initial project planning. Specifically address:

Threatened, Endangered, Candidate species and other species of concern. Do avoidance or special treatment areas exist within the project footprint?

Best Practices for NEPA Compliance

Issue 4, cont.Recommended BMPs: Timing of proposed construction and operations in regard to

breeding, nesting and birthing seasons, but also lambing and calving seasons and use of critical habitat by multiple species

Extent and timing of road use Wetlands and crossings of Waters of the United States Cultural resources Air quality issues in the project area

All of this background research is applicable to preparation of an EA or EIS.

Best Practices for NEPA ComplianceIssue 4, cont.

Recommended BMPs: Re-design the project as necessary and possible to address the

environmental constraints before an initial presentation of the project to the lead Federal agency.

First impressions set the tone for interaction and buy-in from agency staff – come in with a project that has the least possible contentious issues for the agency technical staff and their NEPA project manager (hence, less work for them).

Request and respond to contributions from the BIA regional and agency staff and the Tribe regarding the project, well in advance of initiation of a NEPA EA or EIS.

Best Practices for NEPA ComplianceIssue 5: Choice of EA or EIS for NEPA Review

Recommended BMP: Request an EA rather than an EIS unless the project will

definitely have a significant environmental impact that can’t be mitigated, or unless the BIA insists on an EIS. An adequately prepared EA will:

Provide the same level of environmental protection as an EIS Require substantially less cost and time than an EIS. Provide a collaborative opportunity for the proponent, the

BIA, Tribes, and consulting parties to redesign the project to reduce impacts to non-significant if possible.

Best Practices for NEPA ComplianceIssue 5: Choice of EA or EIS for NEPA Review, cont.Recommended BMP: If the responsible Federal agency cannot issue a FONSI and an EIS

is required, research and analysis conducted for the EA is applicable to the EIS. The EIS can then focus on the unresolved impacts.

Preparation of an EIS assumes that a project may have significant environmental impacts, and it necessarily works with a fairly static project description.

The 3rd party preparer of an EIS is expected to be at “arms length” from the proponents and the responsible Federal agency, which can further diminish effective cooperation to resolve issues.

Best Practices for NEPA Compliance

Issue 6: Delays and uncertain timeframes for reviews and decisions

Recommended BMP: Recognize that permitting on trust lands will take longer than

permitting on private lands, other Federal lands, or even private lands within reservation boundaries.

In cooperation with the BIA and the Tribes, make it an initial priority to establish a reasonable timeline for NEPA analysis, other permitting, and execution of mitigation commitments.

Target dates for deliverables and review periods help agency staff allocate time, which ultimately helps keep the project on schedule.

A proponent-created schedule that doesn’t fit agency availability is worthless and frustrating, and it ultimately results in additional costs

Best Practices for NEPA Compliance for Oil and Gas Development on Indian LandsConclusions: Indian lands in Montana hold promise for substantial

expansion of oil and gas development – at least 4 reservations are currently producing and large areas are either unleased or are not being actively developed.

Application of programmatic level NEPA review, particularly Programmatic Environmental Assessments, in concert with other Best Management Practices, holds promise to invigorate exploration and development.

Expansion of oil and gas operations on Indian lands ultimately benefits all of us.

Best Practices for NEPA Compliance and Related Permitting for Projects on Indian Lands

Environment

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