U.S. oil drilling regulator ignored experts' red flags on environmental risks

By Juliet Eilperin
Washington Post Staff Writer
Tuesday, May 25, 2010; A01

The federal agency responsible for regulating U.S. offshore oil drilling repeatedly ignored warnings from government scientists about environmental risks in its push to approve energy exploration activities quickly, according to numerous documents and interviews.

Minerals Management Service officials, who can receive cash bonuses in the thousands of dollars based in large part on meeting federal deadlines for leasing offshore oil and gas exploration, frequently changed documents and bypassed legal requirements aimed at protecting the marine environment, the documents show.

This has dramatically weakened the scientific checks on offshore drilling that were established under landmark laws such as the Marine Mammal Protection Act and the National Environmental Policy Act, say those who have worked with the MMS, which is part of the Interior Department.

"It's a war between the biologists and the engineers," said Thomas A. Campbell, who served as the National Oceanic and Atmospheric Administration's general counsel under President George H.W. Bush. "They just have a very different worldview, and sometimes the engineers simply don't listen to the biologists."

Interviews and documents show numerous examples in which senior officials discounted scientific data and advice -- even from scientists elsewhere in the federal government -- that would have impeded oil and gas companies drilling offshore.

Under the Bush and Obama administrations, red flags raised by scientists at NOAA and the Marine Mammal Commission have gone unheeded. Obama officials say they are taking steps to ensure that science guides drilling decisions; former agency officials say such questions are rarely as simple as they seem.

Process for leases

Several instances involving the leasing process for a section of Alaska's Beaufort Sea and the Gulf of Mexico illustrate the problems the agency faces.

In 2006, then-MMS biologist Jeff Childs wrote a detailed analysis of how the Exxon Valdez spill had harmed generations of fish in Alaska's Prince William Sound and how a future spill could do the same in the Beaufort Sea.

But Childs's conclusion that "a large oil spill . . . is likely to result in significant adverse effects on local [fish] populations requiring three or more generations to recover" would have forced the MMS to conduct a full environmental impact statement before auctioning off a lease in the Beaufort Sea.

"I have concerns about Jeff's analysis and will not insert it into the [environmental assessment] being sent to HQ at this time," Deborah Cranswick, chief of the environmental assessment section at the MMS, wrote in an e-mail June 23 to her Alaska colleagues. "I believe that Regional management needs to review it first because Jeff has concluded new significant impacts from oil spills. This will trigger an [environmental impact statement] -- and thus delay the lease for at least a year."

Six days later, Paul Stang, Alaska's MMS regional supervisor for leasing and environment, sent a hand-written note to Childs saying, "As you know, a conclusion of significance under [the National Environmental Policy Act] means an EIS and delay in sale 202. That would, as you can imagine, not go over well with HQ and others."

When Childs balked at deleting the finding, another manager rewrote it so that the lease process could move ahead without delay.

The government held the sale in April 2007, receiving $42 million in bids from Shell, Conoco, BP, ENI Petroleum U.S., and Total E&P USA. Groups representing Native Alaskans and a municipality unsuccessfully challenged the sale in court, and part of Shell's Beaufort exploration plan for this summer includes leases for part of the Beaufort Sea that were in sale 202.

On Monday, Stang, who is retired from the MMS, said managers concluded that Childs's analysis was misplaced because any accident "would be expected to affect a minuscule and insignificant portion of the pink salmon in Alaska. . . . It was a judgment as to what's included in an environmental impact statement."

As for the bonuses given for expediting leases, Stang said, they were based on "the timeliness and quality" of employees' work. Cranswick was on vacation and could not be reached for comment.

MMS staff analysts met with similar resistance after reviewing the exploration plan that Shell submitted for the Beaufort Sea in 2007.

One predicted that "the proposed action has the potential to cause significant impacts to a variety of protected wildlife resources." Another wrote that it "lacks sufficient detail and makes unreasonable conclusions; the details it does provide are disturbing." The agency approved the plan.

"Both in the case of MMS and NOAA, there's this agency culture that their job is to protect oil and gas activity," said Layla Hughes, senior program officer for the World Wildlife Fund's Arctic policy.

Evaluating effects

MMS actions are shaped in part by a 2005 regulation it adopted that assumes oil and gas companies can best evaluate the environmental effects of their operations.

The rule governing which information the MMS should receive and review before signing off on drilling plans states: "The lessee or operator is in the best position to determine the environmental effects of its proposed activity based on whether the operation is routine or non-routine."

MMS said in a May 2000 draft environmental analysis of deep-water drilling in the Gulf of Mexico that "the oil industry's experience base in deep-water well control is limited" and that a massive spill "could easily turn out to be a potential showstopper for the [Outer Continental Shelf] program if the industry and MMS do not come together as a whole to prevent such an incident."

But when the MMS finalized the document that month, it jettisoned those two statements and concluded that there was no need to prepare an environmental impact analysis for deep-water drilling: "Most deep-water operations and activities are substantially the same as those associated with conventional operations and activities on the continental shelf."

On Friday, Deputy Interior Secretary David Hayes said that the MMS had made decisions lacking scientific justification but that the administration had put Arctic leasing on hold and enlisted U.S. Geological Survey scientists to ensure that future decisions have scientific integrity.

"There are certainly historical issues there that we're interested in addressing and reforming," Hayes said. "I think we're in the process of getting a cultural change in the scientific part of MMS. We're making sure the science is not a means to an end, but an independent input to the process."

But the pattern of dismissing biologists' input has continued under the Obama administration. NOAA must judge whether companies have established adequate programs to monitor and minimize their impact on marine mammals before issuing a permit to operate offshore.

Last year, federal marine mammal experts told the MMS that it had minimized the environmental risks of drilling when assessing the impact of auctioning leases in four areas in Alaska's Beaufort and Chukchi seas.

Agency officials did not respond, although they are required under law to either adopt the experts' recommendations or explain within 120 days why they reject them. Their draft analysis was not finalized before the administration postponed further action on lease sales in March.

When asked why the MMS did not comply with the law, Interior spokeswoman Kendra Barkoff said, "We are going to continue to be aggressive in our reform agenda to ensure that all laws are followed."

In June, a review panel with NOAA issued a scathing critique of Shell Exploration and Production's plan to conduct an open-water marine survey in Alaska's Chukchi Sea. There "are no clearly stated 'scientific objectives' " in Shell's proposal, wrote Sue Moore from NOAA's Office of Science and Technology. "The plan makes a number of misleading statements that should be brought to the attention of the authors," wrote Tim Ragen, executive director of the Marine Mammal Commission.

But NOAA's Office of Protected Resources gave Shell the permit without demanding modifications. Ragen said the MMS has consistently minimized the environmental risks of offshore energy exploration.

"Policymakers need to know we don't have perfect information on many aspects of oil and gas operations. In essence, we're playing a game of probabilities involving significant uncertainty," he said. But the commission gets no "feedback on our recommendations, so I don't know how much attention they get."

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