Skip to main content

Oil and Gas Management: Interior's Bureau of Safety and Environmental Enforcement Restructuring Has Not Addressed Long-Standing Oversight Deficiencies

GAO-16-245 Published: Feb 10, 2016. Publicly Released: Mar 11, 2016.
Jump To:
Skip to Highlights

Highlights

What GAO Found

The Department of the Interior's (Interior) Bureau of Safety and Environmental Enforcement's (BSEE) ongoing restructuring has made limited progress in enhancing the bureau's investigative capabilities. BSEE continues to rely on pre- Deepwater Horizon incident policies and procedures. Specifically, BSEE has not completed a policy outlining investigative responsibilities or updated procedures for investigating incidents—among the goals of BSEE's restructuring, according to restructuring planning documents, and consistent with federal standards for internal control. The use of outdated investigative policies and procedures is a long-standing deficiency. Post- Deepwater Horizon incident investigations found that Interior's policies and procedures did not include requirements for planning investigations, gathering and documenting evidence, and ensuring quality control and determined that their continued use posed a risk to the effectiveness of bureau investigations. Without completing and updating its investigative policies and procedures, BSEE continues to face this risk.

BSEE's ongoing restructuring of its environmental compliance program reverses actions taken to address post- Deepwater Horizon incident concerns, and risks weakening the bureau's environmental compliance oversight capabilities. In 2011, in response to two post- Deepwater Horizon incident investigations that found that BSEE's predecessor's focus on oil and gas development might have been at the expense of protecting the environment, BSEE created an environmental oversight division with region-based staff reporting directly to the headquarters-based division chief instead of regional management. This reporting structure was to help ensure that environmental issues received appropriate weight and consideration within the bureau. Under the restructuring, since February 2015, field-based environmental compliance staff again report to their regional director. BSEE's rationale for this action is unclear, as it was not included in the bureau's restructuring planning documentation or analysis as part of restructuring planning. Under federal standards for internal control, management is to assess the risks faced from external and internal sources and decide what actions to take to mitigate them. Without assessing the risk of reversing this reporting structure, it is not clear that BSEE will have reasonable assurance that environmental issues are receiving the appropriate weight and consideration as called for by post- Deepwater Horizon incident investigations.

BSEE's ongoing restructuring has made limited progress in enhancing its enforcement capabilities. In particular, BSEE has not developed procedures with criteria to guide the use of its enforcement tools—such as warnings and fines—which are among the goals of BSEE's restructuring, according to planning documents, and consistent with federal standards for internal control. BSEE restructuring plans state that the current lack of criteria results in inconsistent actions and creates uncertainty for operators regarding BSEE's oversight approach and expectations. The absence of enforcement criteria is a long-standing deficiency. For example, post- Deepwater Horizon incident investigations recommended an assessment of enforcement tools and how to employ them to deter safety and environmental violations. Without developing procedures with defined criteria for taking enforcement actions, BSEE continues to face risks to the effectiveness of its enforcement capabilities.

Why GAO Did This Study

On April 20, 2010, the Deepwater Horizon drilling rig exploded in the Gulf of Mexico resulting in 11 deaths, serious injuries, and the largest marine oil spill in U.S. history. In response, in May 2010, Interior reorganized offshore oil and gas management activities—energy development, revenue collection, and regulatory oversight—into separate bureaus. In October 2011, Interior created BSEE to manage regulatory oversight. Since then, BSEE has undertaken reform efforts but has not fully addressed deficiencies in its investigative, environmental compliance, and enforcement capabilities identified by investigations after the Deepwater Horizon incident. In October 2013, BSEE initiated an organizational restructuring to address continuing oversight deficiencies. GAO was asked to review BSEE's efforts to enhance its oversight capabilities.

This report examines the extent to which BSEE's ongoing restructuring has enhanced its capabilities for (1) investigations, (2) environmental compliance, and (3) enforcement. GAO reviewed laws, regulations, and policies, related to BSEE's restructuring and oversight activities. GAO also interviewed BSEE officials and industry representatives.

Recommendations

GAO recommends, among other things, that BSEE (1) complete and update its investigative policies and procedures, (2) conduct and document a risk analysis of the regional-based reporting structure, and (3) develop procedures for enforcement actions. Interior neither agreed nor disagreed with GAO's recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Interior To enhance its ability to effectively oversee offshore oil and gas development, the Secretary of the Interior should direct the Director of the Bureau of Safety and Environmental Enforcement to continue to implement its restructuring effort. To address risks to the effectiveness of its investigations, environmental compliance, and enforcement capabilities, BSEE should complete policies outlining the responsibilities of its the Safety and Incident Investigations Division (SIID), Environmental Compliance Division, and Safety Enforcement Division and update and develop procedures to guide them.
Closed – Implemented
During 2017 and 2018, BSEE issued a series of bureau manual chapters, policy handbooks, and standard operating procedures. Our review of these documents found they defined (1) the responsibilities of its Safety and Incident Investigations Division, Environmental Compliance Division, and Safety Enforcement Division as well as (2) provided procedures to guide them.
Department of the Interior To enhance its ability to effectively oversee offshore oil and gas development, the Secretary of the Interior should direct the Director of the Bureau of Safety and Environmental Enforcement to continue to implement its restructuring effort. To enhance its investigative capabilities, BSEE should establish a capability to review investigation policy and collect and analyze incidents to identify trends in safety and environmental hazards.
Closed – Implemented
According to BSEE documentation, the Safety and Incident Investigations Division (SIID) is working closely with the Office of Policy and Analysis and the Records, Delegations, and Directives Team to implement the requirements specified in the BSEE Directives System Manual Chapter and to convert a number of Bureau Interim Directives into Bureau Manual Chapters. In May 2018, BSEE provided the results of an internal control review it had conducted to assess compliance with the tiering process outlined in the National Investigations Handbook. In particular, the Internal Control Review recommended that BSEE (1) continue revision of its National Investigations Handbook, (2) evaluate investigation tier designation, and (3) develop additional investigative training. In July 2019, BSEE provided documentation that it had converted four Bureau Interim Directives into Bureau Manual Chapters and that, in response to the Internal Control Review, it had (1) revised its National Investigations Handbook, (2) evaluated investigative tier designation, and (3) implemented additional training. In October 2021, BSEE issued a new Bureau Manual Chapter that establishes policy and responsibilities for BSEE employees regarding classification of the investigations conducted by BSEE's National Investigations Program into reported incidents, other incidents, and matters of interest that occur as a result of operations conducted pursuant to the Outer Continental Shelf Lands Act. According to BSEE, in alignment with the new Bureau Manual Chapter, the bureau's technical information management system has been updated to record investigation tier classifications and subcategory determinations.
Department of the Interior To enhance its ability to effectively oversee offshore oil and gas development, the Secretary of the Interior should direct the Director of the Bureau of Safety and Environmental Enforcement to continue to implement its restructuring effort. To enhance its investigative capabilities, BSEE should develop a plan with milestones for implementing the case management system for investigations.
Closed – Implemented
In September 2016, BSEE issued a plan with milestones for implementing its case management system for investigations.
Department of the Interior To enhance its ability to effectively oversee offshore oil and gas development, the Secretary of the Interior should direct the Director of the Bureau of Safety and Environmental Enforcement to continue to implement its restructuring effort. To enhance its investigative capabilities, BSEE should clearly communicate the purpose of the Investigations and Review Unit, as it will be assumed by the SIID, to industry operators.
Closed – Implemented
According to BSEE documentation, the Safety and Incident Investigations Division (SIID), the Office of Public Affairs, the Office of Policy and Analysis, and regional offices consulted with the new BSEE Director to solicit input and discuss potential mechanisms for communicating the purpose of SIID to industry operators. Actions to implement this recommendation were expected to be completed in December 2017. In March 2019, BSEE officials provided documentation indicating that the bureau had (1) developed a strategy for communicating the role of the SIID as well as (2) briefing slides to facilitate discussion of the SIID's role and that (3) these materials were presented at a recent industry conference. In February 2020, BSEE provided documentation that it had integrated descriptions of the SIID and its functions into standard industry outreach efforts.
Department of the Interior To enhance its ability to effectively oversee offshore oil and gas development, the Secretary of the Interior should direct the Director of the Bureau of Safety and Environmental Enforcement to continue to implement its restructuring effort. To enhance its investigative capabilities, BSEE should clarify policies and procedures for assigning panel investigation membership and referring cases of suspected criminal wrongdoing to the Interior's Office of Inspector General.
Closed – Implemented
In March 2016, BSEE issued two Bureau Interim Directives (BID) regarding the assignment of panel investigation membership and referral to Interior's Office of the Inspector General. In February 2018, BSEE issued a Bureau Manual Chapter (592.1) clarifying that the bureau Director has final authority on chairperson designation for instances in which regional and headquarters investigative personnel cannot agree on who should lead a panel investigation.
Department of the Interior To enhance its ability to effectively oversee offshore oil and gas development, the Secretary of the Interior should direct the Director of the Bureau of Safety and Environmental Enforcement to continue to implement its restructuring effort. To enhance its environmental compliance capabilities, BSEE should conduct and document a risk analysis of the regional-based reporting structure of the Environmental Compliance Division, including actions to mitigate any identified risk.
Closed – Implemented
According to BSEE documentation, a risk analysis of the regional-based reporting structure of the Environmental Compliance Division was initiated in fiscal year 2017 using the Department of Interior's Integrated Risk Rating Tool. BSEE informed us during the first quarter of fiscal year 2018 that it planned to complete the risk analysis by the first quarter of fiscal year 2019. In September 2019, BSEE indicated that it had completed its risk evaluation and identified 19 corrective action to be taken. In January 2020, BSEE provided us with two risk analyses documenting identified risks and a corrective action plan to mitigate them.
Department of the Interior To enhance its ability to effectively oversee offshore oil and gas development, the Secretary of the Interior should direct the Director of the Bureau of Safety and Environmental Enforcement to continue to implement its restructuring effort. To enhance its environmental compliance capabilities, BSEE should coordinate with the Administrator of the Environmental Protection Agency to consider the relevance of existing interagency agreements for monitoring operator compliance with National Pollutant Discharge Elimination System permits on the Outer Continental Shelf and, if necessary, update them to reflect current oversight needs.
Closed – Implemented
In September 2019, BSEE indicated that it had been working with EPA and BOEM since June 2018 to update its National Pollutant Discharge Elimination System Memorandum of Understanding. In July 2020, BSEE leadership approved a new agreement to facilitate cooperation and coordination between BSEE, EPA, and BOEM with regard to their offshore oversight responsibilities.
Department of the Interior To enhance its ability to effectively oversee offshore oil and gas development, the Secretary of the Interior should direct the Director of the Bureau of Safety and Environmental Enforcement to continue to implement its restructuring effort. To enhance its environmental compliance capabilities, BSEE should develop a plan to address documented environmental oversight staffing needs.
Closed – Implemented
According to BSEE documentation, the BSEE Director has ordered an assessment. In the meantime, inspectors are being trained to assist with environmental oversight responsibilities as appropriate. BSEE informed us during the first quarter of fiscal year 2018 that it expected to develop a plan to address documented environmental oversight staffing needs by 2020. Officials said that the timeline was pushed out to allow time to finish policy and complete a work risk assessment. In September 2019, BSEE indicated that it had identified three corrective actions based on its evaluation of risks associated with the organizational structure of the bureau's environmental compliance program that will address this recommendation. In 2020, BSEE leadership approved 5 new environmental compliance staff positions to provide continued program support and succession planning.
Department of the Interior To enhance its ability to effectively oversee offshore oil and gas development, the Secretary of the Interior should direct the Director of the Bureau of Safety and Environmental Enforcement to continue to implement its restructuring effort. To enhance its enforcement capabilities, BSEE should develop a mechanism to ensure that it reviews the maximum daily civil penalty and adjust it to reflect increases in the Consumer Price Index within the time frame as directed by statute.
Closed – Implemented
In April 2016, BSEE issued a bureau manual chapter regarding the review and adjustment of civil penalty amounts. In February 2018, BSEE issued a supplementary standard operating procedure that defines business practices for civil penalty inflation adjustment and identifies specific bureau roles, responsibilities, and timelines.

Full Report

GAO Contacts

Office of Public Affairs

Topics

Policies and proceduresEnvironmental complianceCompliance oversightInternal controlsEnvironmental issuesRegulatory oversightEnvironmental enforcementOil and gas managementNatural resourcesDeaths