The Inspector General of the Department of the Interior has issued its Investigative Report on the Department’s hasty review of the Chukchi Sea oil leases. The Inspector General paints an ugly portrait of the consequences of political pressure on the environmental impact statement process. While Shell has withdrawn from its offshore Arctic drilling program, there are very serious implications to the Inspector General’s Report that shouldn’t get lost in the political blame game.
There is a lot of confusion about the whole environmental impact statement process. It’s become the whipping boy of politicians likes Senator Murkowski. It might help if we consider what the National Environmental Protection Act – NEPA, a bill signed into law by President Richard Nixon – intended to accomplish. One of the major elements was to require all executive federal agencies prepare reports, known as environmental assessments (EAs) and environmental impact statements (EISs), prior to proposed action by those federal agencies. The reports analyze the potential environmental effects of proposed federal agency actions.
This is important: the reports are neutral. They don’t say whether a proposed action – say, the lease of offshore oil drilling exploration tracts in the Arctic – is good or bad. The reports don’t take sides. All NEPA requires is that the environmental impact statements fully and fairly analyze the risks of the proposed course of action. The environmental impact statement doesn’t make a decision. It just lays out the possible consequences. It’s a “look before you leap” process, not a decisional process. Once the federal agency has an adequate environmental impact statement, it makes the separate decision whether or not to proceed with the proposed action.
NEPA does require a careful look. But that’s the lesson of history. For decades before, the United States had allowed federal agencies to go forward without consideration of the consequences, and the results was an appalling environmental mess. Other parts of NEPA are still dealing with the consequences of those earlier, ill-considered actions. A careful look requires, well, care, and that takes time. And because all of the projects that go through the NEPA process have sponsors and cheerleaders behind them, and usually folks that oppose them, the environmental review process has become a battleground. Most of those battles could be avoided if folks would just allow the environmental review process to be complete. But that doesn’t always happen.
Lots of politicians, including Alaska’s own Senator Murkowski, don’t want the federal government to take that careful look before acting. Because a careful look requires time, and sometimes those politicians are unhappy about the delay. Sometimes, as a consequence of motives ranging from short-sightedness to legal and illegal bribery, those politicians don’t want the possible consequences to see the light of day.
With that brief, possibly simplistic background, let’s look at how the environmental review process sorted itself out in the Chukchi Sea oil lease process.
Because the Chukchi lease proposal involved federal lands and a federal agency, the proposed lease had to go through an environmental impact statement, an assessment of the risks associated with the lease. The environmental impact statement that emerged was flawed. The Ninth Circuit Court of Appeals found that one of the premises of the proposed lease sale, that there were 1 billion barrels of recoverable oil, was not supported by any evidence and was arbitrary and capricious.1 Because a major premise of the environmental impact statement was false, the EIS failed of its purpose. It did not fully and fairly assess the risks and benefits of Arctic drilling. The 9th Circuit told the Department of the Interior to start over.
The problem for Interior and Shell was that the 9th Circuit decision came in 2014, when Shell was heavily committed to its Arctic drilling program. Shell, of course, hd gone ahead even while the EIS was being challenged. Now drilling couldn’t proceed without a Supplemental Environmental Impact Statement (SEIS; don’t you love the jargon?). An SEIS, when a fundamental premise of the EIS has been found false, is pretty much a do-over; it takes 2-3 years to accomplish. Shell wanted to resume drilling the following year.
Enter Senator Murkowski. Alaska’s senior senator put immense political heat on senior management at the Department of the Interior to get the SEIS done in time for the 2015 drilling season. The result is documented by the Inspector General: a hastily prepared, marginally adequate analysis that quite possibly will not withstand court review. The Inspector General’s report doesn’t mince words. The SEIS was rushed. And it was rushed to protect the Department of Interior from politicians like Senator M<urkowski:
We also found that upper management did establish an expedited timeline for completing the SEIS, but DOI Chief of Staff Tommy Beaudreau, who established the timeline, informed us he did not do so to benefit industry but to protect DOI from blame if the leaseholder missed the 2015 drilling season.
Don’t worry; Chief of Staff Beaudreau assured the Inspector General that the rushed SEIS was still complete and that the Department of Interior would carefully weigh the SEIS in deciding whether or not to
rubber stamp approve the earlier decision to go ahead with the lease. And we can trust Beaudreau, even if he was more concerned with protecting his agency than doing his job.[^2]
Despite the hasty SEIS and the Department’s equally hasty decision to allow Shell to proceed, Shell didn’t find commercial quantities of oil and has, at least for now, abandoned its Arctic program.
And as Shell left the Chukchi Sea, it announced its decision was based, in part, “because of the ‘challenging and unpredictable federal regulatory environment in offshore Alaska.'”
Never expect gratitude, Chief of Staff Beaudreau.
And where do we find ourselves after this little adventure?
- The Department of Interior will protect itself at the expense of doing its job.
- Senator Murkowski will put possible short term benefits ahead of the long term interests of her constituents.
- The Department of Interior’s environmental offices are now weaker as a result of resignations and diminished morale.
- Big Oil cannot be trusted.
None of this is really new. It’s just a depressing, if carefully documented, confirmation of what we already knew.
- With the benefit of crystal clear hindsight, Shell’s dry hole seems to support the 9th Circuit’s skepticism. ↩