The National Environmental Policy Act
in the
Oil & Gas Industry
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Who are we?
Kleinfelder is a 53-year-old employeeowned architecture, engineering, and
science consulting firm with over
1,700 employees and 65 offices in the US,
Canada, and Australia.
25 years providing engineering and
environmental solutions to upstream,
midstream, and downstream clients.
Presence in all the major domestic and
Canadian oil and gas plays.
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What we are going to cover?
Regulatory framework of NEPA.
Schedule and Costs.
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Regulatory Framework of NEPA
The National Environmental Policy Act (NEPA)
was enacted in 1970. NEPA is our nation’s
charter for protection of the environment.
NEPA process is intended to help public officials
make better decisions about actions on public
lands (NEPA is not intended to be an environmental
group obstruction tool but frequently is).
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What triggers NEPA?
Any federal action that has the potential to
affect the human environment is subject to
analysis under NEPA.
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Federal Action = Any activity that requires federal
agency approval, permitting, and/or funding
Typical O&G federal
actions:
• Drilling federal or Tribal
minerals.
• Building ROW across
federal or Tribal lands.
• Drilling wells on State lands
funded by federal dollars.
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Human Environment = The natural and physical
environment and relationship of people with that
environment
Typical effects that may trigger requirement for analysis under NEPA:
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Surface disturbance
Habitat loss
Noise impacts
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Socioeconomic benefits
Changes in traffic patterns
Air quality effects
and more….
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Definition of “human environment” allows for a
lot of discretion in determining whether a federal
action will have an effect that requires analysis
under NEPA.
When an agency determines that a federal
action may affect the human environment, they
are required under NEPA to evaluate and
disclose those potential impacts to the public.
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Types of NEPA Documents
Environmental Assessment (EA)
Environmental Impact Statement (EIS)
Categorical Exclusions (CE or CX)
Documentation of NEPA Adequacy (DNA)
Given time constraints we will only be discussing EAs
and EISs.
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Environmental Assessment
Under NEPA and CEQ definitions, an EA addresses
an action where the significance of social, economic,
or environmental impact is not clearly established.
In practice, an EA is written when the agency is fairly
confident that the action will not have “significant”
effects on the human environment.
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Environmental Assessment
Thresholds for determining “significance” often not
clearly defined.
E.g., a violation of federal CAA or CWA standards could be
significant but how do you determine whether impacts to
“recreational experience” is significant?
Agencies have tremendous discretion in deciding
whether or not to prepare an EA, or go straight to the
more time consuming and costly EIS process.
Decision is often heavily influenced by external
pressures (e.g., from other agencies like EPA,
environmental groups).
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Environmental Assessment
• EAs will often include
voluntary mitigation to
avoid significant
impacts, and hence
avoid having to do an
EIS:
• e.g., upfront surveys for
threatened or
endangered plants,
archaeological
clearance surveys.
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Environmental Assessment
If no significant impact is determined, a Finding of No
Significant Impact (FONSI) is prepared and, depending
on the agency, included within a Decision Record /
Decision Memo.
If the action analyzed in an EA is determined to have
significant impacts then an EIS must be prepared.
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Environmental Impact Statement
Addresses an action likely to have significant impacts.
The scope and schedule for EISs can vary dramatically
among agencies, but are generally much more in-depth
and longer than EAs.
Projects analyzed in an EIS can have and are presumed
to have significant impacts (reminder - in an EA there
cannot be “significant” impacts).
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Environmental Impact Statement
EISs involve multiple, time-consuming steps required by
regulation.
Lengthy agency review of public notifications in the
Federal Register
6- to 12-month alternative development phase
30- to 60-day public scoping period
30- to 60-day EIS comment periods
All of which result in a lengthy completion process: 3-7
years for most O&G EISs in western U.S.
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Connected Action
Connected action is a term frequently heard when
discussing EAs or EISs and merits definition…
Connected actions are actions that are interdependent;
one action depends on another action for their
justification. Connected actions must be analyzed in the
EA or EIS.
Pipeline that begins at a well pad on Federal surface, and
crosses onto privately-owned surface estate.
Wells with privately owned surface and mineral estate that use
the same proposed ROWs as wells on Federal surface or
mineral estate.
Underground injection control (UIC) wells on private surface
estate that will be used for disposal of produced water from
federal mineral estate wells.
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NEPA Process Participants
Federal Lead Agency – Such as BLM, BIA, or USFS
The Proponent/Applicant – The Operator
Third-Party Contractor – The Consultant
Cooperating Agencies (CAs) – Entities with legal jurisdiction; State
Agencies, Counties, Indian Tribes, Other Federal Agencies (Fish &
Wildlife Service, Environmental Protection Agency)
Consulting Parties (CPs) – Entities with unique expertise; e.g.,
non-governmental organizations
The Public – Environmental Groups, Landowners, Interested
Citizens
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Cost and Schedule
Operators are frequently caught off-guard by NEPA
requirements and associated costs and timing.
Costs can range depending on the type of NEPA
document, scale of proposed development, location of
the project, issues or resources within your project area,
and the agency and/or agency personnel you are
working with.
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Typical NEPA costs:
EAs:
$25,000 - $500,000
EISs:
$1,000,000 - $6,000,000+
Ancillary costs may include civil, biological, cultural, and
paleontological surveys; stream and wetland delineations;
and modeling
$5,000 - $2,000,000+
Why does NEPA compliance cost so much?
Complicated impact assessment models for air and water quality.
Extensive coordination between consultant, agency, and operator.
Significant labor hours to author the document.
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Schedule for NEPA projects vary depending on the
agency, issues associated with your project, and delays
related to other agency priorities.
Typical timeframes:
EAs: 6 months to 3 years
EISs: 3 to 7 years
Schedule is heavily influenced by the operator and the
agency.
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Example EA Process Flow Chart
With Agency Touch Points
Agency
IDT
Conduct
Scoping
Project Kickoff
Develop
Alternatives
Agency
Review
Agency
Review
Publish Draft
EA
Solicit Public
Comments
Agency
Review
Agency
Review
Respond to
Comments
Conduct and
Analyze Data
Publish Final
EA
Issue FONSI
or Prepare EIS
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Conclusions
In practice, NEPA compliance is guided by statute,
regulation, politics, and personalities.
The human element has salient effect on how individual NEPA
projects are implemented, how long they take, and how much
they cost.
Critical to understand agency-specific guidelines and
office-specific “guidelines” for NEPA compliance.
Critical to build schedule and cost expectations into
drilling plans.
Critical to be informed and engaged throughout process.
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Questions?
Contact Information:
Dawn Martin
303-916-0354
DMartin@Kleinfelder.com
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