Administration: Republican plan for offshore oversight could slow down permitting

A Republican plan to overhaul the federal agencies that oversee offshore drilling risks “bureaucratic paralysis” and could bog down government reviews of coastal energy projects, a top Obama administration official cautioned today.

The warning was delivered as the Bureau of Ocean Energy Management, Regulation and Enforcement enters the final stages of a broad overhaul launched after last year’s Gulf oil spill. In less than two weeks, the agency will be divided into two new agencies: the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement.

That builds on a change that took place last October, when President Barack Obama’s administration created a new Office of Natural Resources Revenue in the Interior Department and tasked it with collecting revenues from offshore energy development.

While BOEM will be responsible for administering offshore leasing, reviewing broad exploration plans and doing environmental reviews, BSEE will focus on conducting engineering and safety examinations of proposed drilling, permitting individual offshore wells and enforcing safety and environmental regulations.

“We have designed BOEM as the resource manager responsible for overseeing the sensible development of offshore energy resources, including assessment of the environmental effects of exploration and development plans,” Bromwich said at a House Natural Resources Committee hearing on the reorganization today. “BSEE is designed to be focused on the engineering and safety issues related to specific well operations.”

But the administration’s plan clashes with legislation proposed by Rep. Doc Hastings, R-Wash., the head of the natural resources panel, that would create a new Ocean Energy Safety Service (essentially BSEE, but with a different name) responsible for processing all permits, exploration plans and development plans.

Bromwich said Hastings’ bill would effectively divide work between the two bureaus based on whether a lease has been issued or not — muddling the agency’s missions and causing duplication.

The legislation “would establish overlapping and potentially conflicting areas of responsibility and environmental analysis and create risks of bureaucratic paralysis,” Bromwich warned Hastings today. That could “impair the timely and efficient review of proposed offshore energy projects” and could prompt the two bureaus to come to different conclusions after environmental reviews, with no clear way to resolve the disputes.

“The concerns are principally that a pre-lease, post-lease division . . . would require full-bodied environmental analyses under the National Environmental Policy Act in both the resource management agency and in the safety and environmental agency,” Bromwich said. “We think that carries grave risks of conflicting NEPA judgments by the two agencies, which would need to be resolved, if they can be resolved.”

Hastings stressed that his bill was a discussion draft, and he wants to work with the Obama administration to get the details right.

“The stakes are high and we must ensure that reforms are done right,” Hastings said. “Millions of jobs, our economy and energy security are all on the line.”

The administration, for its part, has insisted that it wants Congress to pass legislation codifying the new federal structure for regulating offshore drilling. Right now, the structure has been mostly created through orders by the Interior Secretary and not written into the law books.