Best Practices for NEPA Compliance and Related Permitting for EOR Projects

Kurt SchweigertSenior ConsultantJuly 8, 2014

Best Practices for NEPA Compliance and Related Permitting for EOR Projects

NEPA OverviewThe National Environmental Policy Act (NEPA) became mandatory in 1970Compliance with is required for upstream oil and gas operations, including EOR, 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 allottees

NEPA Overview

Responsible Federal agencies must consider the potential effects of their actions on the natural and 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

NEPA Overview

Who may require NEPA for EOR? Bureau of Land Management (BLM) U.S. Forest Service Bureau of Indian Affairs U.S. Army Corps of Engineers

What is required Categorical Exclusion (CX or CatEx) Environmental Assessment (EA) Environmental Impact Statement (EIS)

NEPA Overview A CatEx is rarely applicable to a major construction project –

DOI and its agencies have lists of project types for CatExapplicability.

An EA is done principally to determine if significant environmental impacts are likely to occur, and therefore if an EIS is required. EAs are done for project types not on the CatEx lists and/or which are of a size or nature that could result in significant impacts. An EA concludes in a Finding of No Significant Impact

(FONSI) or a finding of significant impact(s) which requires preparation of an EIS.

NEPA Overview

An EIS is conducted to identify potential significant impacts and analyze the extent of the impacts. An EIS concludes in a Record of Decision (ROD) that

states that significant impacts are or are not likely to occur as a result of the proposed project.

Neither a FONSI nor a ROD decides whether a project will go forward. These decisions inform the Federal agency regarding its leasing or permitting actions.

NEPA OverviewElements 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

The NEPA LandscapeNEPA compliance seldom occurs alone in the regulatory process:

National Historic Preservation Act (all Federal Agencies and State Historic Preservation Officers)

Endangered Species Act (U.S. Fish & Wildlife Service) Clean Air Act (EPA) Clean Water Act (Corps of Engineers) Migratory Bird Treaty Act (U.S. Fish & Wildlife Service) Bald and Golden Eagle Protection Act (U.S. Fish & Wildlife

Service) Other Federal, Tribal, and State laws and regulations

NEPA LandscapeFederal 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

NEPA Landscape

Wyoming 30 million acres

of Federal and Indian surface ownership – 48%

41.6 million acres of Federal and Indian mineral ownership – 65%

NEPA Landscape

Montana 27.2 million acres

of Federal and Indian surface ownership – 29%

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

The EOR Landscape in Regard to NEPA

EOR potentially has three exposures for NEPA compliance: CO2 or other sources – well fields, processing facilities

that produce CO2, water, or other gas for EOR Pipelines Injection and recovery fields and facilities

If those facilities are located on Federal lands or cross Federal minerals

All facilities can be considered connected actions under NEPA

Caution regarding old “depleted” oil fields and older pipeline routes that may not have had NEPA or other regulatory compliance

Navigating the NEPA Landscape for EOR ProjectsGetting Started: Defining the Requirements and Options

1. Will an EOR project require NEPA compliance?2. What Federal agency and office would be

responsible?3. What level of NEPA analysis and document will be

required?4. What is the timeframe for completing NEPA for an

EOR project?

Navigating the NEPA Landscape for EOR Projects

1. Will an EOR project require NEPA compliance?It almost certainly will if:

Federal or Indian surface lands are crossed, other than very minor incidental crossings.

It may if: Federal permitting is needed, such as Clean Water Act

Section 404 permitting by the Corps of Engineers. The EOR project is associated with another project, such as

an interstate gas pipeline or a well field development on Federal or Indian lands.

Navigating the NEPA Landscape for EOR Projects2. What Federal agency and office will require NEPA?

Multiple Federal agencies may be involved, can choose a single lead or participate as co-leads.

Generally, the lead agency will be the land management agency with the largest project footprint – usually the BLM, USFS, or BIA, but possibly U.S. Fish & Wildlife Service, Department of Defense, etc.

Multiple agency offices may be involved. Choice of lead office is usually based on footprint, but also may consider staffing and work load.

Navigating the NEPA Landscape for EOR Projects

3. What level of NEPA analysis and document will be required?

It depends … On the size, nature, and location of the proposed project. On the flexibility of the project design. On the decision of the lead Federal agency whether an EA

or an EIS is needed. The decision is also sometimes influenced by past

experiences with similar projects or with energy development in general in the area(s) of the proposed projects.

Navigating the NEPA Landscape for EOR Projects

4. What is the timeframe for completing NEPA for an EOR project?

It depends … On all of the factors discussed above. Generally, an EA can be completed and a FONSI signed

by the lead Federal agency within 6 to 12 months, depending again on the extent and nature of the project.

EISs may take as little as one year to complete and have a ROD published, but the current average for an EIS is around 3.5 years, and some take up to 10 years to complete.

Navigating the NEPA Landscape for EOR ProjectsCommon factors that can effect the type, timeframe, and cost of NEPA for EOR projects: Extent of previous NEPA analysis in the project area. Air quality and ongoing air quality modeling for the project

area(s). Presence of Threatened & Endangered Species and candidate

species, and availability of surveys and habitat modeling and mapping.

Cultural and cultural resources sensitivity of the project area. Timing in relation to agencies’ other responsibilities, especially

BLM offices’ preparation or updating of Resource Management Plans.

Best Practices for NEPA Compliance for EOR ProjectsRecommended BMP No. 1: Identify at the earliest possible time whether a Federal nexus exists for the proposed project:

Are Federal or Indian lands crossed by the project? Can the project be economically re-routed to avoid Federal or Indian lands? Consider the ROW, engineering, and construction costs of re-routes.

Consider that other Federal, Tribal, and state laws may still apply to the re-routes

Can the EOR project be constructed in corridors or areas already cleared for NEPA compliance? – WY Pipeline Authority proposal.

Best Practices for NEPA Compliance for EOR ProjectsRecommended BMP #2:

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?

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.

Best Practices for NEPA Compliance for EOR ProjectsRecommended BMP #2:Conduct a constraints analysis for environmental factors as part of initial project planning.Specifically address:

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 Compliance for EOR ProjectsRecommended BMP #3: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 agency staff regarding the project, well in advance of initiation of a NEPA EA or EIS.

Best Practices for NEPA Compliance for EOR ProjectsRecommended BMP #4:Always request an EA rather than an EIS unless the EOR project will definitely have a significant environmental impact that can’t be mitigated, or unless the responsible Federal agency categorically 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.

Not open the process to public review until the proponent, the lead agency, and consulting parties have worked through environmental issues and defined mitigations that reduce impacts to non-significant if possible.

Best Practices for NEPA Compliance for EOR ProjectsRecommended BMP #4:Always request an EA rather than an EIS.

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 static project description.

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

Best Practices for NEPA Compliance for EOR ProjectsRecommended BMP #5:In cooperation with the lead Federal agency, 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 for the EOR company staff and consultants.

Constraint Analysis should include environmental issues as the project plan is developed

Identify if a Federal nexus exists, and which agency and office would lead the NEPA compliance – avoidance of Federal lands is not always the best solution, and other laws still apply.

Revise the project plan to avoid environmental impacts before initial presentation to the Federal agency.

Propose an EA rather than an EIS. Meet with the Federal agency technical staff as early as possible and

regularly. Work with the agency to establish a reasonable schedule for completion of the

technical research, analysis, and document preparation.

Take-Aways

? QUESTIONS

Kurt SchweigertSenior ConsultantTrihydro [email protected]/745-7474