In marking the fortieth anniversary of the National Environmental Policy Act (“NEPA”), the White House Council on Environmental Quality (“CEQ”) put forth “four steps to modernize and reinvigorate” NEPA in February of 2010.[1] Among these four steps was issuing guidance on use of categorical exclusions.[2] Just months later, however, the BP oil spill in the Gulf of Mexico became a real-life vehicle for examining how categorical exclusions had been applied in NEPA’s environmental review process in the offshore oil and gas exploration context.  In August of 2010, CEQ released a report regarding the Minerals Management Service’s (“MMS”) NEPA policies, practices, and procedures,[3] and its final guidance for all Federal departments and agencies on how to establish, apply, and revise categorical exclusions came out a few months later.[4] Additionally, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling released its final report in January of 2011.[5] In examining the NEPA process that eventually led to BP’s exploration for oil at the Macondo Well, both CEQ and the National Commission found MMS’s use of categorical exclusions problematic.[6]

A categorical exclusion is for “a category of actions which do not individually or cumulatively have a significant effect on the human environment . . . and for which, therefore, neither an environmental assessment nor an environmental impact statement is required [under NEPA].”[7] As used by MMS, however, categorical exclusions resulted in a lack of site-specific environmental analysis and reliance on broad information that had been developed in earlier stages of the outer continental shelf five-year leasing program.[8] As CEQ pointed out, the categorical exclusions used in approving BPs Exploration Plan and Applications for Permit to Drill were established in the 1980s, “before deepwater drilling became widespread.”[9] Given the new complexity and risk of deepwater drilling, CEQ called for review of the use of categorical exclusions for Outer Continental Shelf oil and gas exploration,[10] perhaps numbering the days of their use in the future.  The newly formed Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) is now reviewing its NEPA processes to consider whether decisionmakers receive all necessary environmental analysis before applying categorical exclusions, whether new information or circumstances are present, whether the proposed deepwater drilling triggers an extraordinary circumstance requiring environmental review, and whether proper documentation is maintained.[11]

Remarking that “it is difficult to argue that deepwater drilling is an activity that does not present at least some potentially significant risk of harm to the environment of the Gulf,” the National Commission similarly called for the revision and strengthening of NEPA policies, practices, and procedures in the off-shore context.[12] However, the recently issued CEQ guidance extends concerns about the use of categorical exclusions from the oil spill to all Federal agencies.[13] It provides agency guidance on establishing and revising categorical exclusions, using public involvement and documentation in defining proposed categorical exclusions, applying categorical exclusions, and conducting periodic reviews of their use and usefulness.[14] As such, the question now becomes whether the BP oil spill will serve as a catalyst for improving the use of categorical exclusions in Federal actions more broadly.

Although concern over NEPA generally and categorical exclusions specifically are leading to plans for new procedures in offshore leasing,[15] it is unclear what will happen in other federal agencies.  First, CEQ guidance is not strictly binding.[16] Although CEQ recommends a cycle of seven-year review for categorical exclusions[17] which may prompt some agencies to look at their oldest categorical exclusions, they are not compelled to do so.  Second, there is a question of lengthy time periods of review.  Categorical exclusions are made by notice and comment rulemaking, and as such, reviewing and revising just one categorical exclusion in one agency would necessarily imply a slow and involved process.  Third, there is a question of resources.  With the 112th Congress and the Executive branch both committed to cutting agency costs, one can only wonder where NEPA will fall in the list of priorities.  Nevertheless, if the calls for improving categorical exclusions are heeded at all, much is to be gained: old categorical exclusions may be updated, documentation of categorical exclusion review could help ensure that exclusions are used appropriately by providing a record that could be challenged, and a system could be created for keeping categorical exclusion processes current.  For now, however, only time will tell if a “modernize[d] and reinvigorate[d]”[18] NEPA might eventually become a silver lining of the BP oil spill.

-Anne Brinkmann, Associate