GAO-09-872, Energy Policy Act of 2005: Greater Clarity Needed to Address Concerns with Categorical Exclusions for Oil and Gas Development under Section 390 of the Act


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entitled 'Energy Policy Act of 2005: Greater Clarity Needed to Address 
Concerns with Categorical Exclusions for Oil and Gas Development under 
Section 390 of the Act' which was released on September 16, 2009. 

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Report to Congressional Requesters: 

United States Government Accountability Office: 
GAO: 

September 2009: 

Energy Policy Act of 2005: 

Greater Clarity Needed to Address Concerns with Categorical Exclusions 
for Oil and Gas Development under Section 390 of the Act: 

GAO-09-872: 

GAO Highlights: 

Highlights of GAO-09-872, a report to congressional requesters. 

Why GAO Did This Study: 

The Energy Policy Act of 2005 was enacted in part to expedite oil and 
gas development. Section 390 of the act authorized the Department of 
the Interior’s Bureau of Land Management (BLM) to use categorical 
exclusions to streamline the environmental analysis required when 
approving certain oil and gas activities. Numerous questions have been 
raised about how and when BLM should use these section 390 categorical 
exclusions. GAO was asked to report on (1) the extent to which BLM has 
used section 390 categorical exclusions and the benefits, if any, 
associated with their use; (2) the extent to which BLM has complied 
with the act and agency guidance; and (3) key concerns, if any, 
associated with section 390 categorical exclusions. GAO analyzed 
documents from all 26 BLM field offices that have used this new tool, 
including a nongeneralizable random sample of 215 section 390 
categorical exclusion decision documents. 

What GAO Found: 

GAO’s analysis of BLM field office data shows that section 390 
categorical exclusions were used to approve approximately 6,100 of 
22,000 applications for drilling permits (about 28 percent) and about 
800 other actions—mostly modifications to existing permits—from fiscal 
years 2006 to 2008. GAO is reporting about 1,150 more instances in 
which BLM approved section 390 categorical exclusions than had been 
reported by BLM headquarters, largely because many field offices 
erroneously used single decision documents to approve multiple oil and 
gas wells. While section 390 categorical exclusions increased the 
efficiency of certain operations, some BLM field offices benefited more 
than others. The differences in benefits stem from a variety of factors 
and circumstances, such as whether an office had recent and site-
specific National Environmental Policy Act (NEPA) documentation. 

BLM’s use of section 390 categorical exclusions has frequently been out 
of compliance with both the law and BLM’s guidance. First, GAO found 
several types of violations with the law, including approving more than 
one oil or gas well under a single decision document, approving 
projects inconsistent with the law’s criteria, and drilling a new well 
after time frames had lapsed. Second, GAO found numerous examples—in 85 
percent of the field offices sampled—where officials did not correctly 
follow guidance, most often by failing to adequately justify the use of 
a categorical exclusion. A lack of clear guidance and oversight 
contributed to the legal violations and noncompliance. While many of 
these are technical in nature, others are more significant and may have 
thwarted NEPA’s twin aims of ensuring BLM and the public are fully 
informed of the environmental consequences of BLM’s actions. 

A lack of clarity in section 390 and BLM’s guidance has raised serious 
concerns about the use of section 390 categorical exclusions. 

* First, fundamental questions about what section 390 categorical 
exclusions are and how they should be used have led to concerns that 
BLM may be using these categorical exclusions in too many—or too few—
instances. For example, there is disagreement as to whether BLM must 
screen section 390 categorical exclusions for extraordinary 
circumstances which would preclude their use, whether their use is 
mandatory, and how the public can challenge their use and on what 
grounds. 

* Second, specific concerns have arisen about key concepts underlying 
the law’s description of certain section 390 categorical exclusions. 
For example, some have raised concerns that section 390 categorical 
exclusions allow BLM to exceed development levels—such as number of 
wells to be drilled—analyzed in supporting NEPA documents without 
conducting further analysis. 

* Third, vague or nonexistent definitions of key terms in the law and 
BLM guidance that describe the conditions to be met when using a 
section 390 categorical exclusion—such as “individual surface 
disturbances” or “maintenance of a minor activity”—have led to varied 
interpretations among field offices and concerns about misuse and a 
lack of transparency. 

What GAO Recommends: 

Congress may want consider amending the act to clarify section 390. In 
addition, GAO recommends that BLM take steps to improve the 
implementation of section 390 by clarifying agency guidance, 
standardizing decision documents, and ensuring compliance through more 
oversight. The Department of the Interior concurred with our 
recommendations and stated that it will take immediate steps to ensure 
that the use of section 390 categorical exclusions is consistent with 
the act and BLM guidance. 

View [hyperlink, http://www.gao.gov/products/GAO-09-872] or key 
components. For more information, contact Robin M. Nazzaro at (202) 512-
3841 or nazzaror@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

BLM Field Offices Have Used Section 390 Categorical Exclusions for Over 
One-Quarter of Their APDs, Although Benefits of Use Vary Widely across 
Field Offices: 

BLM's Use of Section 390 Categorical Exclusions Has Frequently Been Out 
of Compliance with Both the Law and BLM's Implementing Guidance: 

Lack of Clarity in the Law and in BLM Guidance Has Raised Serious 
Concerns: 

Conclusions: 

Matter for Congressional Consideration: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: List of Extraordinary Circumstances for Administrative 
Categorical Exclusions: 

Appendix III: of BLM Field Office Confusion between Section 390 
Categorical Exclusions and Onshore Oil and Gas Order No. 1: 

Appendix IV: Comments from the Department of the Interior: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Number of Section 390 Categorical Exclusions Used to Approve 
APDs, Fiscal Years 2006 through 2008: 

Table 2: Number of Section 390 Categorical Exclusions Used to Approve 
Nondrilling Actions, Fiscal Years 2006 through 2008: 

Table 3: Difference between the Number of Section 390 Categorical 
Exclusions Reported by BLM Headquarters and GAO's Analysis, Fiscal 
Years 2006 through 2008: 

Table 4: Summary of Violations of Section 390 of the Energy Policy Act 
of 2005: 

Table 5: Summary of Noncompliance with BLM Guidance: 

Table 6: Sample Size of Section 390 Categorical Exclusions from BLM 
Field Offices: 

Figures: 

Figure 1: BLM Field Offices with Oil and Gas Activities: 

Figure 2: BLM's Process for Approving Oil and Gas Projects: 

Figure 3: Multiple Wells on a Single Well Pad in Glenwood Springs, 
Colorado (February 2009): 

Figure 4: Spider-web Pattern of Development (c. 2004) and Antelope in 
Front of Wells in a Wildlife Corridor in Pinedale, Wyoming (October 
2008): 

Figure 5: Warning Sign and the Great Hunt Panel in Nine Mile Canyon, 
Utah (October 2008): 

Figure 6: Depiction of the Confusion Surrounding the 5-Year Time Frames 
for Section 390 CX2 and CX3: 

Abbreviations: 

APD: Application for Permit to Drill: 

BLM: Bureau of Land Management: 

FLPMA: Federal Land Policy and Management Act of 1976: 

NEPA: National Environmental Policy Act of 1969: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

September 16, 2009: 

The Honorable Nick J. Rahall, II: 
Chairman: 
Committee on Natural Resources: 
House of Representatives: 

The Honorable James Costa: 
Chairman: 
Subcommittee on Energy and Mineral Resources: 
Committee on Natural Resources: 
House of Representatives: 

The Honorable Jeff Bingaman: 
Chairman: 
Committee on Energy and Natural Resources: 
United States Senate: 

Oil and natural gas production from federal lands is critical to 
meeting our nation's energy needs. From fiscal year 2006 to fiscal year 
2008, the Department of the Interior's (Interior) Bureau of Land 
Management (BLM) approved more than 22,000 new oil and gas drilling 
permits across 20 states, largely in the mountain West. Like many 
projects on federal land with possible environmental impacts, oil and 
gas development activities are typically subject to environmental 
review under the National Environmental Policy Act of 1969 (NEPA). 
[Footnote 1] In addressing long-term energy challenges, Congress 
enacted the Energy Policy Act of 2005, in part to expedite oil and gas 
development within the United States.[Footnote 2] This law authorizes 
BLM, for certain oil and gas activities, to approve projects without 
preparing new environmental analyses that would normally be required by 
NEPA. 

Under NEPA, federal agencies evaluate the likely environmental effects 
of projects they are proposing using an environmental assessment or, if 
projects are likely to significantly affect the environment, a more 
detailed environmental impact statement. If, however, the agency 
determines that activities of a proposed project fall within a category 
of activities the agency has already determined has no significant 
environmental impact--called a categorical exclusion--then the agency 
generally need not prepare an environmental assessment or environmental 
impact statement. The agency may instead approve projects that fit 
within the relevant category by using one of the predetermined 
categorical exclusions, rather than carrying out a project-specific 
environmental assessment or environmental impact statement. For a 
project to be approved using a categorical exclusion, the agency must 
determine whether any extraordinary circumstances exist in which a 
normally excluded action or project may have a significant effect. NEPA 
has two principal purposes: (1) to ensure that the agency carefully 
considers detailed information concerning significant environmental 
impacts and (2) to ensure that this information will be made available 
to the public.[Footnote 3] It does not, however, require any particular 
substantive result.[Footnote 4] 

Interior and BLM have categorical exclusions in place for numerous 
types of activities, such as constructing wildlife perches and 
constructing snow fences for safety purposes. To use such an 
"administrative" categorical exclusion in approving a project on BLM 
land,[Footnote 5] the agency screens each proposed project for 
extraordinary circumstances, such as significant impacts to threatened 
and endangered species, historic or cultural resources, or human health 
and safety or potentially significant cumulative environmental effects 
when coupled with other actions. When one or more of the extraordinary 
circumstances are present, BLM guidance precludes staff from using an 
administrative categorical exclusion for the project. 

Section 390 of the Energy Policy Act of 2005 established five new 
categorical exclusions specifically for oil and gas development. 
[Footnote 6] These categorical exclusions--referred to in this report 
as section 390 categorical exclusions--define specific conditions under 
which BLM need not prepare any new NEPA analysis, such as an 
environmental assessment or environmental impact statement, which would 
ordinarily be required for oil and gas projects. As with administrative 
categorical exclusions, BLM's National Environmental Policy Act 
Handbook requires staff to document their decisions and rationale for 
using any section 390 categorical exclusion to approve an oil or gas 
project. Projects approved with section 390 categorical exclusions are 
not subject to any screening for extraordinary circumstances, according 
to BLM.[Footnote 7] Numerous questions have been raised--by western 
state governors, environmental groups, industry representatives, and 
others--about how and when BLM should use section 390 categorical 
exclusions in approving oil and gas projects. Moreover, disagreements 
with BLM's interpretation that the use of section 390 categorical 
exclusions is not subject to a screening for extraordinary 
circumstances, among other issues, are central to ongoing litigation by 
a coalition of environmental and historic preservation groups 
concerning BLM's use of section 390 categorical exclusions near Nine 
Mile Canyon in Utah.[Footnote 8] 

In this context, we were asked to report on (1) the extent to which BLM 
has used section 390 categorical exclusions each fiscal year from 2006 
through 2008 and the benefits, if any, associated with their use; (2) 
the extent to which BLM has used section 390 categorical exclusions in 
compliance with the Energy Policy Act of 2005 and internal BLM 
guidance; and (3) key concerns, if any, associated with section 390 
categorical exclusions. 

To conduct this work, we reviewed relevant laws, regulations, and 
Interior and BLM guidance. We interviewed officials in BLM headquarters 
and in the 11 BLM field offices (and their associated state offices) 
that processed the most applications for permit to drill (APD) from 
fiscal year 2006 through fiscal year 2008. Specifically, we visited and 
interviewed officials in three BLM state offices (Colorado, Utah, and 
Wyoming) and 8 BLM field offices (Glenwood Springs, in Colorado; Price/ 
Moab and Vernal in Utah; Buffalo, Casper, Pinedale, and Rawlins in 
Wyoming; and Farmington in New Mexico;) and interviewed by telephone 
officials in two additional state offices (California and New Mexico) 
and 3 additional field offices (Bakersfield, California; Carlsbad/ 
Hobbs, New Mexico; and White River, Colorado). We also interviewed 
representatives from industry, historic preservation groups, and 
environmental groups about benefits and concerns--both actual and 
potential--associated with section 390 categorical exclusions. To 
determine the extent to which BLM has used section 390 categorical 
exclusions each fiscal year from 2006 through 2008, we compared the 
data supplied by BLM headquarters with the data supplied by BLM field 
offices to identify and explain discrepancies. To ascertain the 
benefits of using section 390 categorical exclusions, we conducted semi-
structured interviews with the 11 BLM field offices that processed the 
most ADPs from fiscal year 2006 through fiscal year 2008. To determine 
the extent to which BLM has used section 390 categorical exclusions in 
compliance with the Energy Policy Act of 2005 and internal BLM 
guidance, we analyzed documents from all 26 BLM field offices that used 
section 390 categorical exclusions, including a review of a 
nongeneralizable random sample of 215 section 390 categorical exclusion 
decision documents. To determine the key concerns, if any, associated 
with section 390 categorical exclusions, we reviewed relevant land-use-
planning documents, including resource management plans and 
environmental impact statements, and synthesized information gathered 
during interviews. Appendix I presents a more detailed description of 
our scope and methodology. 

We conducted this performance audit from September 2008 through 
September 2009, in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 

Background: 

Under the Federal Land Policy and Management Act of 1976, as amended 
(FLPMA),[Footnote 9] BLM manages more than 261 million acres of federal 
land for multiple uses, including recreation; range; timber; minerals; 
watershed; wildlife and fish; and natural scenic, scientific, and 
historical values, as well as for the sustained yield of renewable 
resources. In addition, the Mineral Leasing Act of 1920 charges 
Interior with the responsibility for oil and gas leasing on federal and 
private lands where the federal government has retained mineral rights. 
Interior's BLM is responsible for managing approximately 700 million 
mineral onshore acres, which include the acreage leased for oil and gas 
development. To manage its responsibilities, BLM administers its 
programs through its headquarters office in Washington, D.C.; 12 state 
offices; 38 district offices; and 127 field offices. BLM headquarters 
develops guidance and regulations for the agency, while the state, 
district, and field offices manage and implement the agency's programs. 
Only 30 BLM field offices are involved in oil and gas development, and 
they are located primarily in the mountain West (see figure 1). 

Figure 1: BLM Field Offices with Oil and Gas Activities: 

[Refer to PDF for image: illustration] 

This illustration is a map of the United States, with an inset map of 
the western U.S. highlighted. 

The following locations are represented on the map: 

BLM Field Offices with Oil and Gas Activities: 

Anchorage, Alaska; 
Bakersfield, California; 
Canon City, Colorado; 
Little Snake, Colorado; 
San Juan Public Lands Center, Colorado; 
Glenwood Springs, Colorado; 
Grand Junction, Colorado; 
White River, Colorado; 
Jackson, Mississippi; 
Great Falls, Montana; 
Miles City, Montana; 
Reno, Nevada; 
Carlsbad/Hobbs, New Mexico; 
Farmington, New Mexico; 
Roswell, New Mexico; 
Dickinson, North Dakota; 
Tulsa, Oklahoma; 
Price/Moab, Utah; 
Salt Lake City, Utah; 
Vernal, Utah; 
Milwaukee, Wisconsin; 
Buffalo, Wyoming; 
Casper, Wyoming; 
Lander, Wyoming; 
Kemmerer, Wyoming; 
Newcastle, Wyoming; 
Pinedale, Wyoming; 
Rawlins, Wyoming; 
Rock Springs, Wyoming; 
Worland/Cody, Wyoming. 

Source: BLM and Map Resources. 

[End of figure] 

FLPMA requires the Secretary of the Interior to develop land use plans 
(called resource management plans); evaluated for potential revision at 
least every 5 years,[Footnote 10] these plans identify areas that will 
be available for oil and gas development. The environmental impact 
statement associated with a resource management plan analyzes the 
potential impacts that may result from the decisions and management 
actions the agency makes in the plan. To estimate what cumulative 
impacts may be expected from decisions in the plan, BLM uses a 
"reasonably foreseeable development scenario" for oil and gas 
development. These scenarios estimate outcomes, such as the number of 
wells and likely surface disturbance for analysis purposes, as well as 
establish monitoring protocols and right-of-way corridors, among other 
things. Consistent with the resource management plans, BLM can accept 
bids from private companies and operators to lease BLM land for access 
to and extraction of oil and gas resources. Before approving an oil and 
gas lease, BLM determines if any restrictions (called stipulations) 
need to be added, among other reasons, to mitigate the environmental 
effects of expected oil and gas production on that lease. As provided 
by BLM regulations, if stipulations are necessary, they are 
incorporated into the lease.[Footnote 11] 

To drill for oil or natural gas on leased lands, a company must submit 
an APD to BLM.[Footnote 12] APDs are used to approve drilling and all 
related activities on land leased by a company, including road 
building; digging pits to store drilling effluent; placing pipelines to 
carry oil and gas to market; and building roads to transport equipment, 
personnel, and other production-related materials.[Footnote 13] After 
an APD is approved, operators can submit proposals to BLM, in the form 
of a sundry notice, for modifications to their approved APD. Sundry 
notices may involve activities like moving the location of a well, 
adding an additional pipeline, or adding remote communications 
equipment. 

Before enactment of section 390 of the Energy Policy Act of 2005, all 
APDs and sundry notices that proposed additional surface disturbance 
underwent an environmental review process as outlined in BLM's NEPA 
handbook. As part of that process, BLM evaluates APDs to ensure that 
they conform to the land use plan and applicable laws and regulations, 
such as the Endangered Species Act and the National Historic 
Preservation Act. BLM inspects proposed drilling sites with on-site 
reviews and may add site-specific restrictions or conditions of 
approval if deemed necessary to protect the environment or cultural 
resources. The process includes developing alternatives to proposed 
projects, which are analyzed for their environmental and cultural 
impacts. BLM typically identifies and analyzes these alternatives using 
(1) an environmental assessment or (2) a more detailed environmental 
impact statement when significant environmental impacts appear likely. 
In some cases, BLM relies on existing NEPA analyses and uses a process 
called determination of NEPA adequacy to document the rationale for 
concluding that there will be no new significant environmental impact 
that would require preparation of additional analysis.[Footnote 14] 
Regulations also direct BLM to make diligent efforts to involve the 
public in preparing and implementing the NEPA process, including 
providing opportunities for the public to comment on proposed projects 
and alternatives.[Footnote 15] 

During review, BLM may determine that a proposed project falls within a 
group of activities--categorical exclusions--that have been defined in 
NEPA regulations as: 

"...a category of actions which do not individually or cumulatively 
have a significant effect on the human environment and which have been 
found to have no such effect in procedures adopted by a Federal agency 
in implementation of these regulations (§ 1507.3) and for which, 
therefore, neither an environmental assessment nor an environmental 
impact statement is required. An agency may decide in its procedures or 
otherwise, to prepare environmental assessments for the reasons stated 
in § 1508.9 even though it is not required to do so. Any procedures 
under this section shall provide for extraordinary circumstances in 
which a normally excluded action may have a significant environmental 
effect."[Footnote 16] 

In such cases, BLM may approve a project using an administrative 
categorical exclusion instead of preparing traditional NEPA documents 
such as an environmental assessment or environmental impact statement, 
or preparing a determination of NEPA adequacy. In most cases, staff 
must document this decision, along with their rationale for choosing to 
use an administrative categorical exclusion. Historically, each 
categorical exclusion available to BLM was submitted by either Interior 
or BLM for review by the Council on Environmental Quality, the office 
within the Executive Office of the President that is responsible for 
establishing NEPA regulations and that works with agencies and other 
White House offices to develop environmental policies and initiatives. 
None of the current administrative categorical exclusions developed 
under NEPA regulations specifically applies to approving APDs.[Footnote 
17] 

BLM guidance details a checklist of 12 extraordinary circumstances 
staff must screen proposed projects against when considering the use of 
an administrative categorical exclusion (see appendix II). The 
existence of one or more of these extraordinary circumstances precludes 
BLM from using a categorical exclusion and therefore necessitates 
reliance on traditional NEPA documents in approving the proposed 
project. 

Section 390 of the Energy Policy Act of 2005 authorizes BLM to forgo 
environmental assessments and impact statements for oil and gas 
projects under certain circumstances. Specifically, subsection (a) 
states: 

"NEPA Review.--Action by the Secretary of the Interior in managing the 
public lands or the Secretary of the Agriculture in managing National 
Forest System Lands, with respect to any of the activities described in 
subsection (b) shall be subject to a rebuttable presumption that the 
use of a categorical exclusion under the National Environmental Policy 
Act of 1969 (NEPA) would apply if the activity is conducted pursuant to 
the Mineral Leasing Act for the purpose of exploration or development 
of oil and gas." [Footnote 18] [emphasis added.] 

Subsection (b) outlines five new categories of activities to be 
considered categorical exclusions. These section 390 categorical 
exclusions (referred to in this report as section 390 CX1, CX2, CX3, 
CX4, and CX5) include: 

"(1) Individual surface disturbances of less than 5 acres so long as 
the total surface disturbance on the lease is not greater than 150 
acres and site-specific analysis in a document prepared pursuant to 
NEPA has been previously completed. 

(2)Drilling an oil or gas well at a location or well pad site at which 
drilling has occurred previously within 5 years prior to the date of 
spudding the well. 

(3)Drilling an oil or gas well within a developed field for which an 
approved land use plan or any environmental document prepared pursuant 
to NEPA analyzed such drilling as a reasonably foreseeable activity, so 
long as such plan or document was approved within 5 years prior to the 
date of spudding the well. 

(4)Placement of a pipeline in an approved right-of-way corridor, so 
long as the corridor was approved within 5 years prior to the date of 
placement of the pipeline. 

(5)Maintenance of a minor activity, other than any construction or 
major renovation or a building or facility." 

In its process for approving oil or gas projects, BLM guidance provides 
that the agency can now use a section 390 categorical exclusion when a 
project meets the conditions set forth for any of the five types of 
section 390 categorical exclusions (see figure 2). BLM guidance still 
directs staff to document their decision and rationale for using a 
specific section 390 categorical exclusion. Furthermore, BLM guidance 
directs its staff when using section 390 categorical exclusions to 
comply with the Endangered Species Act and the National Historic 
Preservation Act; to conduct on-site reviews for all APDs; and to add 
site-specific restrictions or conditions of approval if deemed 
necessary to protect the environment or cultural resources. 

Figure 2: BLM's Process for Approving Oil and Gas Projects: 

[Refer to PDF for image: illustration] 

1) Industry proposes oil and gas project; 

2) Industry submits APD or notice of staking: 
* BLM posts cover sheet in public room for a 30-day period; 

3) Interdisciplinary team review and on-site evaluation: 
* Decision made whether to process application with a traditional NEPA 
document or with a section 390 categorical exclusion; 
* Add conditions of approval, move well locations, or change project as 
needed; 

4) Approve using a traditional NEPA document: 
* Identified which NEPA compliance document used, sometimes online; or: 

Approve using a section 390 categorical exclusion: 
* Not required to disclose use of section 390 categorical exclusion, 
online or otherwise. 

Source: GAO. 

[End of figure] 

BLM headquarters has developed and issued three primary pieces of 
internal guidance on how and when to use section 390 categorical 
exclusions to approve oil and gas development, including: 

* Instruction Memorandum No. 2005-247, issued on September 30, 2005, 
approximately 2 months after passage of the Energy Policy Act of 2005, 
set forth preliminary guidance on the application of section 390 
categorical exclusions. The memorandum directed BLM staff to use a 
section 390 categorical exclusion if the proposed project met the 
conditions for one of the five types of section 390 categorical 
exclusions. 

* BLM's National Environmental Policy Act Handbook H-1790-1, appendix 
2: "Using Categorical Exclusions Established by the Energy Policy Act 
of 2005," issued in January 2008, superseded Instruction Memorandum No. 
2005-247. BLM's NEPA handbook repeats the memorandum's guidance on how 
to use and document the rationale for using a section 390 categorical 
exclusion. Unlike the 2005 instruction memorandum, the appendix does 
not explicitly direct BLM staff to use a section 390 categorical 
exclusion if one is applicable.[Footnote 19] 

* Instruction Memorandum No. 2008-166, issued August 6, 2008, transmits 
a technical correction to BLM's NEPA handbook. The memorandum 
specifies, among other instructions, that (1) section 390 CX1 and CX3 
are the types of section 390 categorical exclusions that require 
reference to previous NEPA analyses and documents and (2) for each type 
of section 390 categorical exclusion, field offices must apply the same 
or better environmental mitigating measures contained in the supporting 
NEPA documents for previous oil and development at the same site. 

In addition, BLM issued supplemental information on how and when to use 
section 390 categorical exclusions, such as a presentation titled 
"Energy Policy Act of 2005 Section 390 [Categorical Exclusions] 101," 
which was created to explain the use of section 390 categorical 
exclusions for state BLM offices,[Footnote 20] as well as other 
informal guidance.[Footnote 21] Furthermore, Onshore Oil and Gas Order 
No. 1, issued on October 21, 1983, and revised on March 7, 2007, 
specifies that: (1) BLM cannot approve an APD until the requirements of 
certain other laws and regulations, including NEPA, the National 
Historic Preservation Act, and the Endangered Species Act, have been 
met; (2) a 30-day public posting period is required for all APDs; and 
(3) an approved APD is valid for 2 years, with the possibility of a 2- 
year renewal. 

BLM Field Offices Have Used Section 390 Categorical Exclusions for Over 
One-Quarter of Their APDs, Although Benefits of Use Vary Widely across 
Field Offices: 

BLM field offices used section 390 categorical exclusions to approve 
almost 6,900 oil-and-gas-related activities from fiscal year 2006 
through fiscal year 2008, including nearly 6,100 APDs, or over one- 
quarter of all APDs approved in this period. The benefits of using 
section 390 categorical exclusions, mainly in the form of faster 
processing times for APDs, varied among offices, depending on a variety 
of factors and circumstances. 

From Fiscal Year 2006 through Fiscal Year 2008, More Than One-Quarter 
of APDs Were Approved Using Section 390 Categorical Exclusions, 
Although BLM's Data Were of Questionable Reliability: 

Our analysis of data supplied by BLM field offices showed that 26 of 
the 30 field offices with oil and gas activities used almost 6,900 
section 390 categorical exclusions to approve oil-and-gas-related 
activities from fiscal year 2006 through fiscal year 2008. Of these, 
BLM field offices used section 390 categorical exclusions to approve 
nearly 6,100 APDs (about 28 percent of approximately 22,000 federal 
wells approved by BLM) during this period (see table 1). Three BLM 
field offices (Pinedale, Wyoming; Farmington, New Mexico; and Vernal, 
Utah) accounted for almost two-thirds of section 390 categorical 
exclusions used to approve APDs. Section 390 CX3 accounted for more 
than 60 percent of the section 390 categorical exclusions used to 
approve APDs. 

Table 1: Number of Section 390 Categorical Exclusions Used to Approve 
APDs, Fiscal Years 2006 through 2008: 

BLM field office: Pinedale, Wyoming; 
Section 390 CX1: 82; 
Section 390 CX2: 672; 
Section 390 CX3: 744; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 1,498. 

BLM field office: Farmington, New Mexico; 
Section 390 CX1: 143; 
Section 390 CX2: 25; 
Section 390 CX3: 1,221; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 1,389. 

BLM field office: Vernal, Utah; 
Section 390 CX1: 62; 
Section 390 CX2: 22; 
Section 390 CX3: 1,065; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 1,149. 

BLM field office: Glenwood Springs, Colorado; 
Section 390 CX1: 171; 
Section 390 CX2: 207; 
Section 390 CX3: 35; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 413. 

BLM field office: Buffalo, Wyoming; 
Section 390 CX1: 18; 
Section 390 CX2: 221; 
Section 390 CX3: 143; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 382. 

BLM field office: Casper, Wyoming; 
Section 390 CX1: 13; 
Section 390 CX2: 0; 
Section 390 CX3: 267; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 280. 

BLM field office: Rawlins, Wyoming; 
Section 390 CX1: 154; 
Section 390 CX2: 24; 
Section 390 CX3: 21; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 199. 

BLM field office: Bakersfield, California; 
Section 390 CX1: 58; 
Section 390 CX2: 27; 
Section 390 CX3: 113; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 198. 

BLM field office: Price/Moab, Utah; 
Section 390 CX1: 45; 
Section 390 CX2: 57; 
Section 390 CX3: 20; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 122. 

BLM field office: Dickinson, North Dakota; 
Section 390 CX1: 0; 
Section 390 CX2: 0; 
Section 390 CX3: 92; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 92. 

BLM field office: White River, Colorado; 
Section 390 CX1: 15; 
Section 390 CX2: 37; 
Section 390 CX3: 18; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 70. 

BLM field office: Worland/Cody, Wyoming; 
Section 390 CX1: 23; 
Section 390 CX2: 0; 
Section 390 CX3: 38; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 61. 

BLM field office: Jackson, Mississippi; 
Section 390 CX1: 51; 
Section 390 CX2: 5; 
Section 390 CX3: 0; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 56. 

BLM field office: Grand Junction, Colorado; 
Section 390 CX1: 3; 
Section 390 CX2: 26; 
Section 390 CX3: 19; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 48. 

BLM field office: Kemmerer, Wyoming; 
Section 390 CX1: 33; 
Section 390 CX2: 0; 
Section 390 CX3: 0; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 33. 

BLM field office: Tulsa, Oklahoma; 
Section 390 CX1: 0; 
Section 390 CX2: 25; 
Section 390 CX3: 0; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 25. 

BLM field office: Anchorage, Alaska; 
Section 390 CX1: 3; 
Section 390 CX2: 10; 
Section 390 CX3: 1; 
Section 390 CX4: 0; 
Section 390 CX5: 2; 
Total: 16. 

BLM field office: Carlsbad/Hobbs, New Mexico; 
Section 390 CX1: 0; 
Section 390 CX2: 11; 
Section 390 CX3: 0; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 11. 

BLM field office: Lander, Wyoming; 
Section 390 CX1: 3; 
Section 390 CX2: 4; 
Section 390 CX3: 2; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 9. 

BLM field office: Little Snake, Colorado; 
Section 390 CX1: 3; 
Section 390 CX2: 5; 
Section 390 CX3: 0; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 8. 

BLM field office: Salt Lake, Utah; 
Section 390 CX1: 5; 
Section 390 CX2: 3; 
Section 390 CX3: 0; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 8. 

BLM field office: Reno, Nevada; 
Section 390 CX1: 2; 
Section 390 CX2: 5; 
Section 390 CX3: 0; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 7. 

BLM field office: San Juan Public Lands Center, Colorado; 
Section 390 CX1: 0; 
Section 390 CX2: 0; 
Section 390 CX3: 7; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 7. 

BLM field office: Milwaukee, Wisconsin; 
Section 390 CX1: 0; 
Section 390 CX2: 1; 
Section 390 CX3: 3; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 4. 

BLM field office: Cañon City, Colorado; 
Section 390 CX1: 2; 
Section 390 CX2: 0; 
Section 390 CX3: 0; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 2. 

BLM field office: Total; 
Section 390 CX1: 889; 
Section 390 CX2: 1,387; 
Section 390 CX3: 3,809; 
Section 390 CX4: 0; 
Section 390 CX5: 2; 
Total: 6,087. 

Source: GAO analysis of data obtained from BLM field offices. 

Notes: The five other BLM field offices with oil and gas activities not 
listed in the table--Great Falls and Miles City, Montana; Newcastle and 
Rock Springs, Wyoming; and Roswell, New Mexico--indicated to us that 
they did not use any section 390 categorical exclusions to approve APDs 
from fiscal year 2006 through fiscal year 2008. In addition, the count 
by section 390 categorical exclusion number is subject to errors, in 
part because of the way BLM field offices recorded instances where more 
than one of the five types of categorical exclusions was used. We did 
not estimate any resulting potential effect on the data. 

[End of table] 

In addition, our analysis of BLM field office data found that BLM used 
section 390 categorical exclusions to approve more than 800 nondrilling 
projects from fiscal year 2006 through fiscal year 2008 (see table 2). 
These approvals--many of which were submitted to BLM as sundry notices--
were for a wide range of activities, such as moving a well location, 
adding new pipelines, and doing road maintenance. The Buffalo, Wyoming, 
field office was the most prominent user of section 390 categorical 
exclusions for these purposes, approving more than 250 nondrilling 
projects with section 390 categorical exclusions. Ten of the BLM field 
offices that used section 390 categorical exclusions in this period did 
not use them to approve any nondrilling actions. 

Table 2: Number of Section 390 Categorical Exclusions Used to Approve 
Nondrilling Actions, Fiscal Years 2006 through 2008: 

BLM field office: Buffalo, Wyoming; 
Section 390 CX1: 165; 
Section 390 CX2: 5; 
Section 390 CX3: 13; 
Section 390 CX4: 24; 
Section 390 CX5: 49; 
Total: 256. 

BLM field office: Casper, Wyoming; 
Section 390 CX1: 38; 
Section 390 CX2: 0; 
Section 390 CX3: 2; 
Section 390 CX4: 2; 
Section 390 CX5: 56; 
Total: 98. 

BLM field office: Bakersfield, California; 
Section 390 CX1: 3; 
Section 390 CX2: 0; 
Section 390 CX3: 86; 
Section 390 CX4: 2; 
Section 390 CX5: 0; 
Total: 91. 

BLM field office: Glenwood Springs, Colorado; 
Section 390 CX1: 40; 
Section 390 CX2: 0; 
Section 390 CX3: 3; 
Section 390 CX4: 17; 
Section 390 CX5: 1; 
Total: 61. 

BLM field office: Rawlins, Wyoming; 
Section 390 CX1: 20; 
Section 390 CX2: 0; 
Section 390 CX3: 3; 
Section 390 CX4: 23; 
Section 390 CX5: 14; 
Total: 60. 

BLM field office: Carlsbad/Hobbs, N.Mexico; 
Section 390 CX1: 4; 
Section 390 CX2: 3; 
Section 390 CX3: 0; 
Section 390 CX4: 50; 
Section 390 CX5: 0; 
Total: 57. 

BLM field office: Worland/Cody, Wyoming; 
Section 390 CX1: 13; 
Section 390 CX2: 0; 
Section 390 CX3: 8; 
Section 390 CX4: 0; 
Section 390 CX5: 33; 
Total: 54. 

BLM field office: Vernal, Utah; 
Section 390 CX1: 8; 
Section 390 CX2: 0; 
Section 390 CX3: 11; 
Section 390 CX4: 21; 
Section 390 CX5: 0; 
Total: 40. 

BLM field office: Lander, Wyoming; 
Section 390 CX1: 19; 
Section 390 CX2: 1; 
Section 390 CX3: 0; 
Section 390 CX4: 7; 
Section 390 CX5: 1; 
Total: 28. 

BLM field office: Pinedale, Wyoming; 
Section 390 CX1: 6; 
Section 390 CX2: 0; 
Section 390 CX3: 5; 
Section 390 CX4: 5; 
Section 390 CX5: 8; 
Total: 24. 

BLM field office: White River, Colorado; 
Section 390 CX1: 3; 
Section 390 CX2: 0; 
Section 390 CX3: 0; 
Section 390 CX4: 6; 
Section 390 CX5: 3; 
Total: 12. 

BLM field office: Grand Junction, Colorado; 
Section 390 CX1: 2; 
Section 390 CX2: 0; 
Section 390 CX3: 0; 
Section 390 CX4: 6; 
Section 390 CX5: 0; 
Total: 8. 

BLM field office: Little Snake, Colorado; 
Section 390 CX1: 5; 
Section 390 CX2: 0; 
Section 390 CX3: 0; 
Section 390 CX4: 3; 
Section 390 CX5: 0; 
Total: 8. 

BLM field office: Jackson, Mississippi; 
Section 390 CX1: 1; 
Section 390 CX2: 0; 
Section 390 CX3: 6; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 7. 

BLM field office: Kemmerer, Wyoming; 
Section 390 CX1: 0; 
Section 390 CX2: 0; 
Section 390 CX3: 0; 
Section 390 CX4: 1; 
Section 390 CX5: 4; 
Total: 5. 

BLM field office: Great Falls, Montana; 
Section 390 CX1: 1; 
Section 390 CX2: 0; 
Section 390 CX3: 0; 
Section 390 CX4: 0; 
Section 390 CX5: 0; 
Total: 1. 

BLM field office: Total; 
Section 390 CX1: 328; 
Section 390 CX2: 9; 
Section 390 CX3: 137; 
Section 390 CX4: 167; 
Section 390 CX5: 169; 
Total: 810. 

Source: GAO analysis of data obtained from BLM field offices. 

Notes: The 10 other BLM field offices that used section 390 categorical 
exclusions from fiscal year 2006 through fiscal year 2008--Anchorage, 
Alaska; Cañon City and San Juan Public Lands Center in Colorado; Reno, 
Nevada; Farmington, New Mexico; Dickinson, North Dakota; Tulsa, 
Oklahoma; Salt Lake and Price/Moab, Utah; Milwaukee, Wisconsin--did not 
use any section 390 categorical exclusions for these types of 
activities. In addition, the count by section 390 categorical exclusion 
number is subject to errors, in part because of the way BLM field 
offices recorded instances where more than one of the five types of 
categorical exclusions was used. We did not estimate any resulting 
potential effect on the data. 

[End of table] 

Data reported by BLM headquarters on the number and type of section 390 
categorical exclusions used by its field offices from fiscal year 2006 
through fiscal year 2008 varied considerably from our analysis of data 
supplied to us directly by the field offices. In total, the data 
reported by BLM headquarters showed over 1,100 fewer instances than our 
analysis for field office use of section 390 categorical exclusions 
(see table 3). 

Table 3: Difference between the Number of Section 390 Categorical 
Exclusions Reported by BLM Headquarters and GAO's Analysis, Fiscal 
Years 2006 through 2008: 

BLM field office: Glenwood Springs, Colorado; 
GAO analysis: 474; 
BLM headquarters data: 189; 
Difference: 285. 

BLM field office: Vernal, Utah; 
GAO analysis: 1,189; 
BLM headquarters data: 973; 
Difference: 216. 

BLM field office: Bakersfield, California; 
GAO analysis: 289; 
BLM headquarters data: 126; 
Difference: 163. 

BLM field office: Buffalo, Wyoming; 
GAO analysis: 638; 
BLM headquarters data: 495; 
Difference: 143. 

BLM field office: Rawlins, Wyoming; 
GAO analysis: 259; 
BLM headquarters data: 176; 
Difference: 83. 

BLM field office: Casper, Wyoming; 
GAO analysis: 378; 
BLM headquarters data: 296; 
Difference: 82. 

BLM field office: Pinedale, Wyoming; 
GAO analysis: 1,522; 
BLM headquarters data: 1,443; 
Difference: 79. 

BLM field office: White River, Colorado; 
GAO analysis: 82; 
BLM headquarters data: 32; 
Difference: 50. 

BLM field office: Farmington, New Mexico; 
GAO analysis: 1,389; 
BLM headquarters data: 1,341; 
Difference: 48. 

BLM field office: Dickinson, North Dakota; 
GAO analysis: 92; 
BLM headquarters data: 69; 
Difference: 23. 

BLM field office: Tulsa, Oklahoma; 
GAO analysis: 25; 
BLM headquarters data: 8; 
Difference: 17. 

BLM field office: Worland/Cody, Wyoming; 
GAO analysis: 115; 
BLM headquarters data: 101; 
Difference: 14. 

BLM field office: Grand Junction, Colorado; 
GAO analysis: 56; 
BLM headquarters data: 42; 
Difference: 14. 

BLM field office: Carlsbad/Hobbs, New Mexico; 
GAO analysis: 68; 
BLM headquarters data: 54; 
Difference: 14. 

BLM field office: Lander, Wyoming; 
GAO analysis: 37; 
BLM headquarters data: 28; 
Difference: 9. 

BLM field office: Kemmerer, Wyoming; 
GAO analysis: 38; 
BLM headquarters data: 30; 
Difference: 8. 

BLM field office: San Juan Public Lands Center, Colorado; 
GAO analysis: 7; 
BLM headquarters data: 2; 
Difference: 5. 

BLM field office: Little Snake, Colorado; 
GAO analysis: 16; 
BLM headquarters data: 13; 
Difference: 3. 

BLM field office: Anchorage, Alaska; 
GAO analysis: 16; 
BLM headquarters data: 13; 
Difference: 3. 

BLM field office: Milwaukee, Wisconsin; 
GAO analysis: 4; 
BLM headquarters data: 3; 
Difference: 1. 

BLM field office: Cañon City, Colorado; 
GAO analysis: 2; 
BLM headquarters data: 2; 
Difference: 0. 

BLM field office: Miles City, Montana; 
GAO analysis: 0; 
BLM headquarters data: 0; 
Difference: 0. 

BLM field office: Newcastle, Wyoming; 
GAO analysis: 0; 
BLM headquarters data: 0; 
Difference: 0. 

BLM field office: Price/Moab, Utah; 
GAO analysis: 122; 
BLM headquarters data: 123; 
Difference: (1). 

BLM field office: Reno, Nevada; 
GAO analysis: 7; 
BLM headquarters data: 8; 
Difference: (1). 

BLM field office: Salt Lake, Utah; 
GAO analysis: 8; 
BLM headquarters data: 9; 
Difference: (1). 

BLM field office: Great Falls, Montana; 
GAO analysis: 1; 
BLM headquarters data: 5; 
Difference: (4). 

BLM field office: Jackson, Mississippi; 
GAO analysis: 63; 
BLM headquarters data: 89; 
Difference: (26). 

BLM field office: Roswell, New Mexico; 
GAO analysis: 0; 
BLM headquarters data: 29; 
Difference: (29). 

BLM field office: Rock Springs, Wyoming; 
GAO analysis: 0; 
BLM headquarters data: 49; 
Difference: (49). 

BLM field office: Total; 
GAO analysis: 6,897; 
BLM headquarters data: 5,748; 
Difference: 1,149. 

Source: GAO analysis of data obtained from BLM field offices. 

Note: While we took extensive steps to obtain accurate data, such as 
obtaining data directly from the field offices and aggregating the data 
in a standardized way, we did not trace each field office's data back 
to original documentation. As a result, some inaccuracies may remain in 
the summary data. 

[End of table] 

The discrepancies between our analysis of BLM field office data and 
data reported by BLM headquarters resulted from a variety of record 
keeping errors. The most significant error resulted from a number of 
field offices using a single section 390 categorical exclusion decision 
document to approve multiple APDs. These field offices counted these 
cases as a single use of a section 390 categorical exclusion, while we 
counted each approved APD as a separate section 390 categorical 
exclusion, in accordance with BLM guidance. This type of counting error 
by the field offices accounts for more than 800 uses of section 390 
categorical exclusions not reported by BLM headquarters. 

We found numerous other errors that contributed to the differences 
between BLM headquarters data and our analysis of field office data. 
Among these were: 

* environmental assessments mislabeled as section 390 categorical 
exclusions, 

* section 390 categorical exclusion decision documents with missing 
approval dates, 

* section 390 categorical exclusion decision documents where multiple 
section 390 categorical exclusions were used to approve a single 
project, and: 

* cases where the date of the project application's receipt was 
recorded instead of the date of the signed approval document. 

In addition, confusion over whether to count section 390 categorical 
exclusions approved by the U.S. Forest Service in the data given to BLM 
headquarters accounted for an undercounting of more than 50 section 390 
categorical exclusions in one office.[Footnote 22] 

We also found a lack of consistency in how the data are collected from 
the field offices, including the lack of uniform and consistent data 
collection and aggregation processes, possibly resulting in further 
errors. For instance, in Colorado, the field offices are expected to 
periodically update a centralized record keeping file--accessible and 
shared by each field office--containing the offices' section 390 
categorical exclusion data. In other states, by contrast, field offices 
receive periodic requests to e-mail section 390 categorical exclusion 
summary data to the state office, according to BLM officials. 

Many field offices were unable to explain the differences between the 
information they provided us and the totals reported by BLM 
headquarters. When asked about the discrepancies, some field office 
officials pointed to high staff turnover and the lack of a central 
point of contact for record keeping at their office, while others 
stated that they were simply unable to account for differences in the 
data. When we asked BLM headquarters to account for the discrepancies, 
they supplied us with data files showing that they aggregated only the 
data provided to them by the various BLM state offices. 

Benefits of Using Section 390 Categorical Exclusions Depend on a 
Variety of Factors and Circumstances: 

Although the vast majority of BLM officials we spoke with told us that 
using section 390 categorical exclusions expedited the application 
review and approval process, the amount of time saved by field offices 
depended on a variety of factors and circumstances influencing the 
extent to which field offices used the exclusions. A frequently cited 
factor contributing to these efficiency gains was the extent to which 
proposed projects fit the specific conditions set forth in each section 
390 categorical exclusion. For example, BLM officials told us that when 
a new well is proposed in a developed field and a NEPA document less 
than 5 years old covers that action, the default document for 
processing that application is a section 390 CX3. In such a 
circumstance, according to officials, use of the section 390 
categorical exclusion is generally straightforward. These conditions 
were found, for example, in the Farmington, New Mexico, field office, 
which--until September 2008--had an existing environmental impact 
statement on file that had been approved recently enough to be valid to 
support the use of a section 390 CX3. Similarly, officials in field 
offices where directional drilling techniques are used--meaning that 
new wells can be drilled from existing well pads--told us that section 
390 CX2 can be used to readily approve new wells. We found this type of 
use in some BLM field offices, such as Price/Moab, Utah, and Glenwood 
Springs, Colorado (see figure 3). 

Figure 3: Multiple Wells on a Single Well Pad in Glenwood Springs, 
Colorado (February 2009): 

[Refer to PDF for image: photograph] 

Source: GAO. 

[End of figure] 

BLM officials identified other factors that contributed to their 
ability to use section 390 categorical exclusions, including the field 
office resource specialists' familiarity with the area of the proposed 
action, the area's environmental sensitivity, the extent of the area's 
cultural resources, and the proposed action's extent of surface 
disturbance. Specifically, BLM officials told us that section 390 
categorical exclusions are regularly used to approve projects in areas 
where sensitive environmental or cultural concerns are few (no 
threatened or endangered species, or limited cultural resources in the 
area, for instance); where the resource specialists are familiar with 
the location of the proposed action; or where the proposed project is 
not unusual or will have minimal impact on the local environment. For 
example, officials in the Pinedale, Wyoming, field office stated that 
their oil and gas fields are extensively developed, the staff is very 
familiar with the areas of development, and environmental and cultural 
concerns are well known and extensively mapped. Given this familiarity, 
according to field office staff, they are generally comfortable 
assuming that section 390 categorical exclusions are appropriate for 
certain locations, unless proven otherwise. For example, officials from 
several BLM field offices--including Bakersfield, California, and 
Pinedale, Wyoming--told us that such familiarity with environmentally 
or culturally sensitive areas under their jurisdiction has generally 
enabled them to consider certain areas as open or closed to approving 
projects with section 390 categorical exclusions. 

Additionally, field office policies can contribute to how often section 
390 categorical exclusions are used. For instance, some field offices 
use them to approve sundry notices and nondrilling activities, while 
others do not. The Buffalo, Wyoming, field office used section 390 
categorical exclusions more than 250 times to approve sundry notices 
and nondrilling activities, while other offices relied solely on 
environmental assessments or determinations of NEPA adequacy for such 
approvals. The differences in office policies result from field office 
managers' comfort with the section 390 categorical exclusions and their 
interpretations of appropriate use. In addition, some BLM officials 
said that not having to respond to public comments makes the use of 
section 390 categorical exclusions more predictable, and thus more 
efficient, than a traditional NEPA document.[Footnote 23] Other factors 
cited by BLM officials include how much staff turnover occurs in an 
office--which contributes to familiarity with processing APDs--and 
whether the office has created a template to facilitate the application 
and documentation of section 390 categorical exclusions. 

The overall increase in efficiency of processing applications for oil 
and gas projects at a given field office depends on how often proposed 
actions meet the criteria for using a section 390 categorical 
exclusion. Officials told us that while a particular use of a section 
390 categorical exclusion does not, in most cases, save substantial 
time, the cumulative time savings from processing multiple actions with 
section 390 categorical exclusions can be, and has been, significant. 
Specifically, many BLM officials said that a typical use of a section 
390 categorical exclusion saves just a few hours of total staff time 
over completing traditional NEPA analysis and documentation for a 
proposed project, because the traditional NEPA process in these cases 
is usually straightforward and concise. According to these officials, 
the time savings generally comes in the form of a less detailed 
narrative required to support approval of a section 390 categorical 
exclusion approval as compared with a traditional NEPA document. 
According to officials, while individual resource specialists-- 
wildlife biologists or archeologists, for instance--do the same 
analysis, the documentation of that analysis is less rigorous when a 
section 390 categorical exclusion is used to approve a project than 
when a traditional NEPA document is prepared. Officials stated that in 
many cases, section 390 categorical exclusions are replacing an 
environmental assessment or a determination of NEPA adequacy. In these 
cases, each resource specialist will save somewhere between a half hour 
and an hour in documenting his or her concurrence with a project, and 
the natural resource specialist will save an hour or two in preparing 
the final document, according to officials. 

In other cases, according to officials, section 390 categorical 
exclusions have been used to approve APDs that, without the exclusions, 
would have normally been approved using a more detailed environmental 
assessment. In addition, officials in some offices told us that the use 
of section 390 categorical exclusions saved time in some cases because 
cumulative impact analysis or response to public comments--which 
sometimes would have occurred in the absence of section 390 categorical 
exclusions--were avoided. For instance, a BLM official in the Pinedale, 
Wyoming, field office told us that adding wells to one of its fields by 
means of traditional NEPA analysis and documentation would have 
required additional cumulative impact analysis because of the proximity 
of the well pads to one another.[Footnote 24] With the section 390 
categorical exclusions, on the other hand, according to this official, 
this office was able to approve a number of wells and their associated 
roads one at a time without this additional analysis, since section 390 
categorical exclusions do not require cumulative impact analysis even 
when many wells are approved for one geographic area. Other BLM 
officials told us that, while section 390 categorical exclusions do not 
include cumulative impact analysis, this analysis is generally 
relatively minor in the traditional environmental assessment, so the 
difference between using section 390 categorical exclusions and 
traditional NEPA documentation was less significant. Moreover, in the 
absence of section 390 categorical exclusions, according to BLM 
officials, public comments on such analyses may lead BLM to alter 
approved development actions, making the timing of the APD approvals a 
great deal less predictable. 

Because it is not always clear how oil and gas development would have 
proceeded in the absence of section 390 categorical exclusions, BLM 
officials told us that estimating the amount of time saved by using the 
exclusions is difficult. In field offices where section 390 categorical 
exclusions are used to approve APDs relatively infrequently--to add a 
small number of wells to a previously existing pad or to a previously 
analyzed master plan of development, for instance--officials told us 
that a typical section 390 categorical exclusion approval document 
saved a few hours of total staff time. Offices that used the section 
390 categorical exclusions in this manner told us that the overall time 
savings was not great, simply because the exclusions were not used that 
often. In contrast, in field offices where section 390 categorical 
exclusions were used more often, the time savings was cumulatively more 
significant. Officials in these field offices told us that while the 
savings for a single APD did not by itself mean that the APD was 
approved in fewer calendar days, the total number of APDs processed in 
the office in a given period was probably larger because of the 
cumulative time saved by using section 390 categorical exclusions. Such 
savings probably did accrue in these field offices because staff hours 
saved in processing APDs were directed toward processing additional 
APDs rather than toward other activities. 

Industry officials with whom we spoke stated that BLM's use of section 
390 categorical exclusions has generally decreased APD-processing 
times, although these officials also stated that this increased 
efficiency was more pronounced in some field offices than in others. 
While acknowledging that the type of development and availability of 
NEPA documents are both critical factors, they also stressed that 
differences in field office policies, field office operations, and 
field management personalities generally influence how readily a given 
BLM field office will use section 390 categorical exclusions. For 
example, according to industry officials, some field offices are 
conservative and cautious, reluctant to use section 390 categorical 
exclusions if even minimal environmental or cultural resource concerns 
exist. This tendency runs counter to what some industry officials told 
us is their interpretation of the law--namely, that they believe that 
section 390 categorical exclusions should be used whenever a project 
meets the required conditions. Industry officials told us that in some 
cases BLM is overly cautious in applying section 390 categorical 
exclusions, in part because BLM fears litigation from environmental 
groups. Although industry officials complained about lack of 
consistency among BLM field offices in how section 390 categorical 
exclusions are used, overall, these officials told us, section 390 
categorical exclusions are a useful tool and have contributed to 
expedited application processing. They applaud the exclusions for 
reducing redundant and time-consuming NEPA documentation and making APD 
application processing more predictable and flexible. 

According to BLM, section 390 categorical exclusions are an important 
tool for increasing efficiency of field office operations, which has 
freed staff time for other activities. These other activities may 
include additional environmental inspections, at the discretion of the 
field office. BLM data indicated that the total number of environmental 
inspections, as well as the total number of environmental inspection 
hours, has increased since section 390 categorical exclusions were 
introduced, but we were unable to correlate increased use of section 
390 categorical exclusions with this increase in environmental 
inspections. A variety of factors other than section 390 categorical 
exclusions probably contributed to the increase. Perhaps most 
significant, BLM hired approximately 200 full-time employees from 
fiscal year 2006 through fiscal year 2008, including inspectors, as 
part of an oil and gas federal streamlining pilot project under the 
Energy Policy Act of 2005.[Footnote 25] In addition, BLM officials told 
us, the amount of time office staff spend doing environmental 
inspections in a given year is a decision made by each field office 
when balancing staffing levels with competing priorities, such as the 
need to process additional APDs. According to officials, although 
section 390 categorical exclusions did free up staff time, the decision 
in many field offices was to use the time to process backlogged APDs. 
Now that the demand for energy development has subsided in many areas, 
according to some BLM officials, they might dedicate additional staff 
time toward environmental inspections. 

BLM's Use of Section 390 Categorical Exclusions Has Frequently Been Out 
of Compliance with Both the Law and BLM's Implementing Guidance: 

BLM's field offices used section 390 categorical exclusions to approve 
oil and gas activities in violation of the law and also failed to 
follow agency guidance. A lack of clear guidance and oversight by the 
agency contributed to both violations of law and noncompliance with 
guidance. 

BLM Has Approved Oil and Gas Activities in Violation of the Law: 

In our review of BLM's section 390 decision documents, we found six 
types of violations of the Energy Policy Act of 2005 (see table 4). 

Table 4: Summary of Violations of Section 390 of the Energy Policy Act 
of 2005: 

Violation: Using a section 390 CX2 or CX3 to approve more than one 
well[B]; 
BLM field office(s) where violation was found: Bakersfield, Calif. 
Buffalo, Wyo. Casper, Wyo. Craig, Colo. Glenwood Springs, Colo. Grand 
Junction, Colo. Price/Moab, Utah Tulsa, Okla. White River/Meeker, Colo. 
Worland/Cody, Wyo. Vernal, Utah; 
Criteria from Energy Policy Act of 2005, section 390: The law defines 
section 390 CX2 and CX3 as "drilling an oil or gas well" [emphasis 
added]. Thus, each of these categorical exclusions is to be used for 
approving a single well on one well pad. In practice, a field office 
must prepare one decision document that outlines the rationale for a 
proposed new activity. Well pads can have multiple wells operating at 
the same time, but for wells approved with a section 390 CX2 or CX3, 
each new well must be approved through a separate decision document. 
Findings[A]: We found 30 instances (at 11 field offices) that used a 
single section 390 CX2 and/or CX3 decision document to approve more 
than one well. For example, the Glenwood Springs, Colorado, field 
office approved eight new wells on one well pad using a section 390 CX3 
decision document. Overall, we added more than 800 uses of section 390 
categorical exclusions to BLM's count to adjust for field offices' 
approving multiple wells with a single decision document.[B] 

Violation: Using a section 390 CX2 or CX3 to approve an activity other 
than drilling an oil or gas well; 
BLM field office(s) where violation was found: Bakersfield, Calif. 
Buffalo, Wyo. Carlsbad/Hobbs, N.Mex. Casper, Wyo. Glenwood Springs, 
Colo. Jackson, Miss. Lander, Wyo. Pinedale, Wyo. Rawlins, Wyo. Vernal, 
Utah Worland/Cody, Wyo.; 
Criteria from Energy Policy Act of 2005, section 390: The law states 
that a section 390 CX2 or CX3 applies to "drilling an oil or gas well" 
[emphasis added]; 
Findings[A]: We found numerous examples at 11 field offices that used a 
section 390 CX2 or CX3 to approve an activity other than drilling an 
oil or gas well. Specifically, we found 7 instances at 5 field offices 
from our sample, as well as more than 140 other instances at the 11 
field offices from our analysis of BLM field office summary data on 
their use of section 390 categorical exclusions. Violations we found in 
our sample included using a section 390 CX2 to approve the drilling of 
three wells to store water (for use during oil or gas drilling), 
approving a right-of-way corridor, or the installation of electrical 
lines. 

Violation: Drilling a new well approved using a section 390 CX2, CX3, 
or CX4 beyond the applicable 5-year time frame[C]; 
BLM field office(s) where violation was found: Dickinson, N.Dak. Grand 
Junction, Colo. Rawlins, Wyo.; 
Criteria from Energy Policy Act of 2005, section 390: The law 
establishes a 5-year time frame for section 390 CX2, CX3 and CX4; 
* Section 390 CX2 restricts new drilling to a "location or well pad 
site at which drilling has [previously] occurred within 5 years"; 
* Section 390 CX3 limits the approval of a new well to a site that has 
"an approved land use plan or any environmental document prepared 
pursuant to NEPA,...so long as such plan or document was approved 
within 5 years" of the drilling date of the new well; 
* Section 390 CX4 confines the "placement of a pipeline in an approved 
right-of-way corridor, so long as the corridor was approved within 5 
years prior to the date of the placement of the pipeline"; 
Findings[A]: We found 3 instances (at 3 field offices) where activities 
approved with either a section 390 CX2, CX3, or CX4 occurred beyond the 
law's 5-year time frame. For example, the Grand Junction, Colorado, 
field office approved a section 390 CX2 decision document for a new 
well close to the end of the 5-year time frame, and the new well was 
drilled about a month after the 5-year time frame elapsed. We also 
found a well, approved by the Dickinson, North Dakota, field office 
using a section 390 CX3, where the drilling started 2 months after the 
5-year time frame elapsed. In addition, we found that the Rawlins, 
Wyoming, field office in 2007 used a section 390 CX4 to approve 
placement of a new pipeline in a right-of-way corridor approved in 
October 1994. The new pipeline was approved 8 years after the end of 
the allowable 5-year time frame.[C] 

Violation: Approving a new oil or gas well at a site that had not yet 
been drilled; 
BLM field office(s) where violation was found: Glenwood Springs, Colo. 
Rawlins, Wyo.; 
Criteria from Energy Policy Act of 2005, section 390: The law limits a 
well approved using a section 390 CX2 to "a location or well pad at 
which drilling has occurred"; 
Findings[A]: We found 5 instances (at 2 field offices) that used a 
section 390 CX2 to approve new wells on sites that did not have any 
wells started or drilled. We found one instance at the Rawlins, 
Wyoming, field office as part of our sample, and we found four 
instances at the Glenwood Springs, Colorado, field office as a result 
of separate follow-up discussions. As part of our follow-up with the 
Glenwood Springs, Colorado, field office we reviewed all section 390 
CX2 decision documents approved from fiscal year 2006 through fiscal 
year 2008. We found four section 390 CX2 decision documents that 
clearly stated that the oil or gas company leasing the site had not 
drilled any other wells. 

Violation: Using section 390 CX5 for ineligible activities; 
BLM field office(s) where violation was found: Anchorage, Alaska 
Worland/Cody, Wyo.; 
Criteria from Energy Policy Act of 2005, section 390: The law limits 
use of section 390 CX5 to projects for "maintenance of a minor 
activity." BLM guidance further defines minor activities as 
"maintenance of the wells or wellbore, a road, wellpad or a production 
facility" and does not allow "construction or major renovation of a 
building or facility"; 
Findings[A]: We found 4 instances (at 2 field offices) of using section 
390 CX5 to approve (1) drilling wells to store natural gas (two 
instances), (2) installation of a pipeline to transport water, and (3) 
a request for a 1-year extension of three APDs. 

Violation: Approving a section 390 CX3 without sufficient supporting 
NEPA documentation; 
BLM field office(s) where violation was found: Jackson, Miss.; 
Criteria from Energy Policy Act of 2005, section 390: The law restricts 
a well approved using section 390 CX3 to one that is "within a 
developed field for which an approved land use plan or any 
environmental document prepared pursuant to NEPA" has been prepared. 
Therefore, new wells are limited to locations that the field office 
previously analyzed in an approved NEPA document; 
Findings[A]: We found one instance (at a field office) of using a 
section 390 CX3 to approve a new well without having an approved NEPA 
document as support. 

Source: GAO analysis of section 390 of the Energy Policy Act of 2005, a 
sample of section 390 categorical exclusion decision documents, and 
related follow-up interviews with BLM officials. 

[A] We reviewed a nongeneralizable random sample of 215 section 390 
categorical exclusion decision documents and followed up with officials 
from specific field offices if this review surfaced additional issues. 

[B] Approving more than one well through a single decision document for 
section 390 CX1 is also out of compliance with BLM guidance (see 
following section). 

[C] Approving an activity outside of the 5-year time frame set forth in 
section 390 CX2, CX3, and CX4 is also out of compliance with BLM 
guidance (see following section). 

[End of table] 

BLM Frequently Failed to Follow Its Guidance in Using Section 390 
Categorical Exclusions: 

In our review of BLM section 390 decision documents, we found numerous 
examples of noncompliance with BLM's guidance--specifically, with 
Instruction Memorandum No. 2005-147 and BLM's NEPA handbook, appendix 
2--including inaccurate documentation or lack of justification for the 
use of the section 390 categorical exclusion (see table 5). 
Specifically, decision documents from 17 field offices lacked 
sufficient information to ascertain compliance with the law or BLM 
guidance. 

Table 5: Summary of Noncompliance with BLM Guidance: 

Noncompliance related to specific section 390 categorical exclusions: 

Noncompliance: Using section 390 CX1 to approve more than one well; 
BLM field office(s) where noncompliance was found: Noncompliance 
related to specific section 390 categorical exclusions: Bakersfield, 
Calif. Buffalo, Wyo. Casper, Wyo. Craig, Colo. Glenwood Springs, Colo. 
Pinedale, Wyo. Price/Moab, Utah; Salt Lake, Utah; Vernal, Utah.; 
Criteria from BLM guidance: Noncompliance related to specific section 
390 categorical exclusions: BLM guidance states that any of the five 
types of 390 categorical exclusions applies to one APD (representing 
one activity). Therefore, only one activity related to oil and gas 
exploration can be approved with a single section 390 CX1; 
Findings[A]: Noncompliance related to specific section 390 categorical 
exclusions: We found 15 instances (at 9 field offices) that approved 
more than one activity--multiple wells in all instances--using section 
390 CX1. For example, the Bakersfield, California, field office 
approved 23 new wells under one section 390 CX1 decision document. In 
addition, the field office categorized each of the 23 new wells under a 
single NEPA number.[B] The Price/Moab, Utah, field office approved 16 
new wells on eight different leases under one section 390 CX1 decision 
document. 

Noncompliance related to allowable 5-year time frames: 

Noncompliance: Using incorrect expiration dates for activities approved 
with a section 390 CX2 or CX3; 
BLM field office(s) where noncompliance was found: Noncompliance 
related to specific section 390 categorical exclusions: Bakersfield, 
Calif.; Glenwood Springs, Colo.[C]; Pinedale, Wyo. Price/Moab, Utah 
White River, Colo.; 
Criteria from BLM guidance: Noncompliance related to specific section 
390 categorical exclusions: BLM guidance states that drilling for a new 
well or placement of a new pipeline using a section 390 CX2 must be 
based on the drill date of the previous well. Therefore, BLM guidance 
requires each section 390 CX2 decision document to include the date 
when work on the site's prior well ended. This date becomes the start 
date for the 5-year time frame in which drilling must begin for any new 
well approved using section 390 CX2; 
Findings[A]: Noncompliance related to specific section 390 categorical 
exclusions: We found 6 instances (at 3 field offices) of using an 
incorrect date to calculate the start of the 5-year time frame for 
drilling a new well. Instead of citing dates associated with work on 
the sites' previous wells, the decision documents generally based the 
expiration dates on the dates the decision documents were authorized. 
In addition, one section 390 CX2 decision document from the White 
River, Colorado, field office based the time frame on dates listed for 
a NEPA document rather, than for the site's existing wells. In 
addition, as a result of discussions with 3 field offices--Bakersfield, 
California, as well as Glenwood Springs and White River, Colorado--we 
found that incorrect office-wide policies were promulgated on how to 
reconcile the 5-year time frame in the law with the normal APD time 
frame. (For a more detailed discussion of the confusion between the 
time frames in the law and the normal APD time frames, see appendix 
III). 

Noncompliance: Failing to include required text defining expiration 
dates for APDs approved using section 390 CX2, CX3, or CX4; 
BLM field office(s) where noncompliance was found: Noncompliance 
related to specific section 390 categorical exclusions: Anchorage, 
Alaska Bakersfield, Calif. Buffalo, Wyo. Carlsbad/Hobbs, N.Mex. Casper, 
Wyo. Craig, Colo. Dickinson, N.Dak. Farmington, N.Mex. Glenwood 
Springs, Colo. Grand Junction, Colo. Lander, Wyo. Price/Moab, Utah 
Jackson, Miss. Salt Lake, Utah San Juan Public Lands Center, Colo. 
Tulsa, Okla. Vernal, Utah White River, Colo. Worland/Cody, Wyo.; 
Criteria from BLM guidance: Noncompliance related to specific section 
390 categorical exclusions: BLM guidance requires section 390 CX2, CX3, 
and CX4 decision documents to include specific text defining the last 
day the drilling of a new well can begin.[D] Specifically: 
* A section 390 CX2 decision document must include text that defines 
the new project's end date in relation to a date that activity last 
occurred on the site; 
* A section 390 CX3 decision document must include text that defines 
the new project's end date in relation to the approval date of the 
associated NEPA documentation; 
* A section 390 CX4 decision document must include an end date by which 
the approved pipeline must begin to be placed in relation to the date 
the existing corridor was approved; 
Findings[A]: Noncompliance related to specific section 390 categorical 
exclusions: We found 95 instances (in 21 field offices) without the 
required expiration dates. Specifically; 
* 27 instances (in 13 field offices) for section 390 CX2 decision 
documents; 
* 39 instances (in 14 field offices) for section 390 CX3 decision 
documents, and; 
* 29 instances (in 12 field offices) for section 390 CX4 decision 
documents. 

Noncompliance related to documentation: 

Noncompliance: Applying the extraordinary circumstances checklist for 
section 390 categorical exclusion decisions; 
BLM field office(s) where noncompliance was found: Noncompliance 
related to specific section 390 categorical exclusions: Anchorage, 
Alaska Carlsbad/Hobbs, N.Mex. Jackson, Miss.; 
Criteria from BLM guidance: Noncompliance related to specific section 
390 categorical exclusions: BLM guidance directs field office staff not 
to follow the extraordinary circumstances checklist when using section 
390 categorical exclusions; 
Findings[A]: Noncompliance related to specific section 390 categorical 
exclusions: We found 21 instances (at 3 field offices) that reviewed 
projects using the extraordinary circumstances checklist and including 
the results in their section 390 categorical exclusion decision 
documents. 

Noncompliance: Lack of adequate justification to ascertain compliance 
with use of section 390 CX1, CX2, CX3, or CX4; 
BLM field office(s) where noncompliance was found: Noncompliance 
related to specific section 390 categorical exclusions: Anchorage, 
Alaska Bakersfield, Calif. Buffalo, Wyo. Carlsbad/Hobbs, N.Mex. Casper, 
Wyo. Craig, Colo. Dickinson, N.Dak. Grand Junction, Colo. Glenwood 
Springs, Colo. Kemmerer, Wyo. Pinedale, Wyo. Rawlins, Wyo. Tulsa, Okla. 
Vernal, Utah White River, Colo. Worland/Cody, Wyo.; 
Criteria from BLM guidance: Noncompliance related to specific section 
390 categorical exclusions: BLM guidance includes a requirement that 
the approval documentation contain a brief rationale justifying why the 
section 390 categorical exclusion applies for a section 390 CX1, CX2, 
CX3, or CX4; 
Findings[A]: Noncompliance related to specific section 390 categorical 
exclusions: We found 17 field offices whose decision documents 
contained inadequate supporting information for us determine whether 
the use of the section 390 categorical exclusion was justified. In most 
cases, the missing information was technical in nature and related to 
the specific conditions that must be met when using a section 390 
categorical exclusion. For example, a section 390 CX3 decision document 
from the Vernal, Utah, field office did not state whether the project 
would occur in a developed oil field. Although we requested additional 
supporting information from field offices when questions arose, we did 
not review the entire APD file in every case to determine if the 
missing supporting information or documentation was included somewhere 
else in the file. 

Source: GAO analysis of section 390 of the Energy Policy Act of 2005, a 
sample of section 390 categorical exclusion decision documents, and 
related follow-up interviews with BLM officials. 

[A] We reviewed a nongeneralizable random sample of 215 section 390 
categorical exclusion decision documents and followed up with officials 
from specific field offices if this review surfaced additional issues. 

[B] Each decision document includes a number--referred to as a NEPA 
number--that is a unique identifier for the project approved using a 
section 390 categorical exclusion. 

[C] We did not find any section 390 decision documents at the 
Bakersfield, California, and Glenwood Springs, Colorado, field offices 
with incorrect expiration dates. As a result of discussion with these 
two field offices, however, along with the White River, Colorado, field 
office, we found that they all had promulgated incorrect office-wide 
policies on how to reconcile the 5-year time frame in the law with the 
normal APD time frame. Had their section 390 decision documents 
included expiration dates calculated in accordance with their 
respective office policies, the expiration dates would have fallen 
outside of the 5-year time frame stated in the law. The three field 
offices reported using section 390 CX2, CX3, or CX4 a total of 551 
times (see appendix III). 

[D] BLM's Instruction Memorandum No. 2005-147, appendix 2 and BLM's 
NEPA handbook, appendix 2, both give sample wording for text defining 
the end date of a section 390 CX2 and CX3 project. For example, "If the 
well has not been spudded [drilled] by (the date the categorical 
exclusion is no longer applicable), this APD will expire and the 
operator is to cease all operations related to preparing to drill the 
well." 

[End of table] 

Lack of Clear Guidance and Oversight Contributed to Legal Violations 
and Noncompliance: 

Overall, we found many more examples of noncompliance with guidance 
than violations of the law. We did not find intentional actions on the 
part of BLM staff to circumvent the law; rather, our findings reflect 
what appear to be honest mistakes stemming from confusion in 
implementing a new law with evolving guidance. 

Nevertheless, even though some of the violations of law--such as 
approving multiple wells with one decision document--were technical in 
nature, they must still be taken seriously. Assuming that wells were 
all located on the same well pad and that appropriate approvals were 
obtained regarding endangered species and cultural resources, coming 
into compliance may simply have involved assigning a unique NEPA log 
number to each well. The action would still have been approved under a 
section 390 categorical exclusion, with comparable environmental 
analyses completed for the proposed projects. Also, if any of the 
activities we identified as violations of the law met conditions for 
using a section 390 categorical exclusion other than the one used to 
approve them, such activities could have been legally approved under 
that other exclusion, again without any additional environmental 
review. In some instances, however, violations we found may have 
thwarted NEPA's twin aims of ensuring that both BLM and the public are 
fully informed of the environmental consequences of BLM's actions. For 
example, approval of multiple wells on one or more well pads could have 
required an environmental assessment or environmental impact statement, 
which would likely have provided additional information on the 
environmental impacts of approving multiple wells. According to BLM 
officials, the outcome of the NEPA process likely would have yielded 
the same result. Nevertheless, the purpose of NEPA is to provide better 
information for decision making, not necessarily to alter the decisions 
ultimately made. Although the projects would likely have been approved, 
the specific location and conditions of approval might have been 
different, and BLM and the public might have had more detailed 
information on the environmental impacts of the approvals. 

A lack of definitive and clear guidance from BLM, as well as lack of 
oversight of field offices' actions, has contributed to the violations 
of law and noncompliance with BLM's existing guidance. Although BLM has 
provided several key guidance documents--including the instruction 
memorandum issued 2 months after the law's passage and its NEPA 
handbook issued in 2008--this guidance lacks the specificity and 
examples needed to clearly direct staff in the appropriate use and 
limits of section 390 categorical exclusions. Specifically, BLM's 
guidance says little, if anything, about (1) the documentation needed 
to support a decision to use a section 390 categorical exclusion or (2) 
the proper circumstances for using section 390 categorical exclusions 
to approve sundry notices. Furthermore, BLM headquarters and state 
offices we spoke with have generally not provided any oversight or 
review of the field offices' actions in using section 390 categorical 
exclusions that would ensure compliance with the law or BLM guidance. 

BLM guidance says little about the information field offices must 
include in documenting their decisions to use section 390 categorical 
exclusions. As a result, the type and level of documentation staff 
provide when using section 390 categorical exclusions to approve 
projects varies widely. Although BLM's primary guidance documents state 
that staff should include a written rationale justifying how a 
particular section 390 categorical exclusion applies, the guidance does 
not describe how specific this justification must be and gives little 
direction on the type of information field offices should include in 
the decision document. BLM guidance directs staff to include specific 
information in decision documents only for section 390 CX2, CX3, and 
CX4, and these directions are limited to requiring inclusion of a term 
or condition of approval stating when authorization of a project will 
expire or be suspended if a new well is not drilled or a new pipeline 
is not placed within the 5-year window provided in the law. BLM 
guidance does not require staff to include any other specific 
information when documenting a decision to use a section 390 
categorical exclusion. For example, the guidance contains no 
requirement that staff include the name of either the land use plan or 
the applicable NEPA document when using a section 390 CX3. While some 
of the decision documents we analyzed contained enough information for 
us to determine whether the proposed activity met the conditions for 
using a particular section 390 categorical exclusion, we found examples 
at most field offices where we could not ascertain compliance. 

Some field offices have developed their own formal and informal 
templates for documenting their use of section 390 categorical 
exclusions; these templates differ greatly among field offices, 
however, and some staff acknowledged to us that mistaken applications 
of section 390 categorical exclusions may have been compounded by the 
continued use of faulty templates. Several field offices told us that 
they developed their own templates to expedite documentation. For 
example, the Farmington, New Mexico, field office developed a template 
calling for summary information on the project, as well as a listing of 
required conditions that must be met, with blank spaces for staff to 
enter supporting information, such as date and underlying NEPA document 
for section 390 CX3.[Footnote 26] Similarly, the Buffalo, Wyoming, and 
Carlsbad, New Mexico, field offices developed separate templates for 
those types of section 390 categorical exclusions they commonly used. 
According to BLM officials, the templates used by field offices were 
not generally reviewed or approved by either BLM headquarters or, in 
some cases, the applicable BLM state office, although BLM headquarters 
officials were aware of their development and use. In contrast, 
officials in the Bakersfield, California, field office told us they 
used an informal template--copying a recent section 390 decision 
document and replacing the previous project-specific information--to 
document their use of that section 390 categorical exclusion. While 
these templates may have helped expedite documentation, many of the 
templates have failed to include important information, and others have 
resulted in the inclusion of information based on erroneous 
interpretations of the law or guidance. For example, templates from 
some field offices do not include a statement indicating that an 
authorization will expire or be suspended at the end of the 5-year time 
frame, while others included an expiration date based on incorrect 
calculations of the 5-year time frame called for by section 390 CX2 and 
CX3. When faulty templates are used, the template itself reinforces 
potentially erroneous decisions, exacerbating concerns that BLM may be 
inappropriately using section 390 categorical exclusions. 

In contrast, BLM has developed official checklists and templates for 
use when documenting other NEPA decisions, including environmental 
assessments, NEPA adequacy, and administrative categorical exclusions. 
[Footnote 27] According to BLM headquarters officials, these checklists 
and templates are additional tools to help ensure compliance with NEPA 
requirements. The tools may also help ensure consistency and serve as 
helpful aids for staff new to the process. 

BLM guidance is also silent about the circumstances under which section 
390 categorical exclusions can be used to approve sundry notices--an 
omission acknowledged by BLM officials. For instance, although section 
390 CX2 and CX3 are limited to approving oil and gas drilling, 
according to BLM headquarters officials, BLM guidance fails to specify 
that section 390 CX2 and CX3 should not be used to approve sundry 
notices seeking to modify previously approved drilling permits, such as 
requests to drill water injection wells. BLM field offices reported 9 
such ineligible uses for section 390 CX2 and 137 for section 390 CX3. 
Moreover, BLM guidance on section 390 CX1 fails to provide examples of 
situations where it is allowable to use section 390 CX1 to approve a 
sundry notice--such as adding a compressor to the well pad site--and, 
in fact, fails to mention whether section 390 CX1 can properly be used 
to approve sundry notices at all. Similarly, BLM's guidance fails to 
clearly state that section 390 CX4 and CX5 can be used only for rights- 
of-way or sundry notices and not for APDs, since, according to BLM 
headquarters staff, APDs are not the proper tool to seek approval for 
laying pipelines or conducting maintenance. In our analysis of decision 
documents, we found at least 2 such ineligible uses of section 390 CX5. 
BLM's failure to provide information on when and if it is appropriate 
to use section 390 categorical exclusions to approve sundry notices has 
raised concerns for some that BLM field offices are using the 
exclusions inappropriately and that BLM is not being transparent about 
how the section 390 categorical exclusions are used. 

Similarly, BLM guidance is silent about what activities are allowed as 
"drilling an oil or gas well" with a section 390 CX2 and CX3. For 
example, BLM's primary guidance does not state whether the proposed 
drilling is limited only to those activities needed to drill and 
produce oil or gas as described in the approved APD, or whether 
subsequent modifications to an approved APD and not initially 
envisioned--such as the placement of a pipeline or drilling water 
storage wells--are also allowable. BLM guidance provides few, if any, 
examples related to when it is appropriate to approve activities not 
part of the original drilling plan, an omission leading some field 
offices to approve ineligible activities. Such approvals have raised 
concerns that BLM is allowing too broad an array of activities and is 
therefore, again, not being transparent about its use of section 390 
categorical exclusions. 

Gaps and shortcomings in BLM's guidance notwithstanding, having the 
guidance is one thing, and enforcing it is another. BLM headquarters 
and state offices have generally provided no oversight of the 
implementation of the new law to ensure that field offices are 
implementing either the law or existing guidance properly. BLM's 
implementing guidance is silent on what oversight is required for 
decisions to use section 390 categorical exclusions, and we found no 
directions for how or when section 390 categorical exclusion decisions 
should be systematically reviewed for compliance with either the law or 
guidance. BLM headquarters staff told us that no such oversight exists 
on a national level. While we found that BLM's Colorado state office 
initially conducted a cursory review of section 390 categorical 
exclusion decisions by its field offices, this review was temporary and 
did not focus on whether uses of section 390 categorical exclusions 
were consistent with BLM guidance or the law; moreover, it is unclear 
what checks this review performed. For example, the review failed to 
catch that two Colorado field offices misinterpreted the 5-year time 
limit associated with section 390 CX2 and CX3. Furthermore, BLM 
headquarters staff acknowledged that although they would like to 
include a review of how section 390 categorical exclusions have been 
used as part of an annual policy review, they have not had the 
resources to do so. 

Lack of Clarity in the Law and in BLM Guidance Has Raised Serious 
Concerns: 

Lack of clarity in section 390 of the Energy Policy Act of 2005 and in 
BLM's implementing guidance has raised serious concerns about when and 
how section 390 categorical exclusions should be used to approve oil 
and gas development. Specifically, concerns raised by industry, 
environmental groups, BLM officials, and others relate to (1) 
fundamental questions about what section 390 categorical exclusions are 
and how they should be used, (2) a lack of clarity in key concepts used 
to describe one or more of the five types of section 390 categorical 
exclusions, and (3) vague or nonexistent definitions--in the law and 
BLM guidance--of key terms describing the conditions to be met when 
using section 390 categorical exclusions. 

The Energy Policy Act of 2005 Provides Little Direction, Raising 
Fundamental Questions on How BLM Should Implement Section 390 
Categorical Exclusions: 

Key elements of section 390 of the Energy Policy Act of 2005 are 
undefined, leading to fundamental questions about what section 390 
categorical exclusions are and how they should be used. This lack of 
direction leaves these elements open to differing interpretations, 
debate, and litigation and has, more generally, led to serious concerns 
that BLM is using section 390 categorical exclusions in too many--or 
too few--instances. BLM officials, environmental groups, industry 
groups, and others have raised serious concerns with the law as a 
whole. These concerns relate to four key elements: (1) the definition 
of "categorical exclusion" and whether the screening for extraordinary 
circumstances is required, (2) whether the use of section 390 
categorical exclusions is mandatory or discretionary, (3) the meaning 
of the phrase "rebuttable presumption," and (4) the level of public 
disclosure required for section 390 categorical exclusions. 

What Are Section 390 Categorical Exclusions, and Are They Subject to 
Extraordinary Circumstances? 

The Energy Policy Act of 2005 does not specifically address the extent 
to which section 390 categorical exclusions are similar or dissimilar--
or to what extent--to administrative categorical exclusions. 
Administrative categorical exclusions do not apply where extraordinary 
circumstances are present.[Footnote 28] The Energy Policy Act of 2005 
does not specifically state whether section 390 categorical exclusions 
are subject to extraordinary circumstances. Moreover, according to BLM 
officials, section 390 categorical exclusions differ substantively from 
administrative categorical exclusions: whereas administrative 
categorical exclusions must have no significant environmental impact, 
there is no specific requirement that section 390 categorical 
exclusions have no such impact. To this end, BLM officials and 
environmental groups alike acknowledge that, to the extent that section 
390 categorical exclusions function differently than administrative 
categorical exclusions, identifying the activities listed in section 
390 as "categorical exclusions" is confusing, and they should have been 
given a different name. 

A key disagreement and concern involving the phrase "categorical 
exclusion" is whether section 390 categorical exclusions should be 
subject to the same test for extraordinary circumstances that 
administrative categorical exclusions are subject to. These 
extraordinary circumstances exist where a normally excluded action may 
have a significant environmental effect. Several environmental groups, 
historic-preservation groups, concerned citizens, government officials, 
and others told us that section 390 categorical exclusions cannot be 
used where extraordinary circumstances are present. This interpretation 
stems from the law's use of the phrase "categorical exclusion"--which 
under NEPA is subject to extraordinary circumstances--and the inherent 
potential for significant individual or cumulative environmental 
impacts associated with oil and gas activities. 

In contrast to those who interpret the law as inherently requiring 
section 390 categorical exclusions to be subject to screening for 
extraordinary circumstances, Interior and BLM have taken the position 
that extraordinary circumstances do not apply to section 390 
categorical exclusions because they are authorized in statute rather 
than in regulation. Specifically, it is BLM's policy that staff do not 
screen projects considered for approval with section 390 categorical 
exclusions using the extraordinary circumstances checklist required for 
administrative categorical exclusions. Officials told us that the NEPA 
documents underlying field office decisions to use section 390 
categorical exclusions already analyze the potential impacts of oil and 
gas activities, and BLM has therefore already considered cumulative 
impacts and extraordinary circumstances. Moreover, although BLM 
guidance directs field office staff not to follow the extraordinary 
circumstances checklist when using section 390 categorical exclusions, 
BLM officials stated that staff formally or informally consider some of 
the issues covered on the checklist. For example, BLM cannot approve an 
APD until the requirements of the National Historic Preservation Act 
and the Endangered Species Act, among others, have been met.[Footnote 
29] The presence of endangered species or historic resources that may 
be significantly impacted by oil and gas activities are two potential 
extraordinary circumstances identified on BLM's checklist. In addition, 
we found three field offices that formally used the extraordinary 
circumstances checklist in documenting their use of section 390 
categorical exclusions, despite guidance to the contrary. BLM officials 
in headquarters and several field offices also acknowledged that staff 
informally consider many of the extraordinary circumstances when 
reviewing projects, even though doing so may result in the need to 
develop a new NEPA document to approve the project when an 
extraordinary circumstance is present. Even so, many see developing new 
NEPA documentation as more expedient than using a potentially 
controversial section 390 categorical exclusion that may be litigated. 

Of the various extraordinary circumstances, concerns about the 
cumulative impacts of additional oil or gas development--especially 
adverse effects of such development on air quality--have been among the 
most widespread and potentially serious. Environmental groups and 
government agencies alike have raised concerns that section 390 
categorical exclusions exacerbate air quality problems and threats by 
not subjecting projects to screening for extraordinary circumstances. 
According to the Environmental Protection Agency and others, ozone 
levels around at least three field offices--Farmington, New Mexico; 
Pinedale, Wyoming; and Vernal, Utah--have reached or exceeded allowable 
levels, in part because of the release of nitrogen oxides from 
additional wells approved with section 390 categorical exclusions. 
Under such circumstances, many have alleged that if BLM had considered 
how the wells individually or cumulatively would have impacted air 
quality, it would not have been able to approve all the wells without 
more rigorous environmental analyses. Another concern related to 
cumulative impacts, according to BLM officials and at least one 
environmental group, is that the drilling of additional oil or gas 
wells using section 390 categorical exclusions has led to a spider web 
pattern of development, resulting in the fragmentation of critical 
habitat and disruption of migration corridors for certain species such 
as sage grouse, prong-horn antelope, and elk (see figure 4). 

Figure 4: Spider-web Pattern of Development (c. 2004) and Antelope in 
Front of Wells in a Wildlife Corridor in Pinedale, Wyoming (October 
2008): 

[Refer to PDF for image: two photographs] 

Source: Linda Baker, Upper grant River Valley Coalition (left) and GAO 
(right). 

[End of figure] 

These uncertainties and disagreements are central to an ongoing lawsuit 
filed against BLM over its use of section 390 categorical exclusions. 
[Footnote 30] In the litigation, an historic preservation group and two 
environmental groups have asserted that BLM should have considered the 
indirect, as well as the direct, cumulative impacts of drilling, such 
as corrosive dust released into the air and onto neighboring rock art 
panels in Nine Mile Canyon, Utah (see figure 5). BLM has responded that 
it properly analyzed the effects of dust on the canyon's rock art 
panels and took measures to mitigate these impacts, including imposing--
through conditions of approval on the relevant APDs--dust suppression 
measures on truck traffic through the canyon. 

Figure 5: Warning Sign and the Great Hunt Panel in Nine Mile Canyon, 
Utah (October 2008): 

[Refer to PDF for image: two photographs] 

Source: GAO. 

The Great Hunt Panel is one of thousands of pictographs in Nine Mile 
Canyon. 

[End of figure] 

Are Section 390 Categorical Exclusions Mandatory? 

The law does not specifically state whether the use of section 390 
categorical exclusions is mandatory for every project meeting the 
conditions set forth in the law. The legislative history for section 
390 of the Energy Policy Act of 2005 is virtually nonexistent and sheds 
little light on whether Congress intended that section 390 categorical 
exclusions be mandatory or discretionary. While the language in a House 
version of the bill specifically exempted from additional NEPA analysis 
activities similar to those meeting the conditions for a section 390 
categorical exclusion as described in the law--meaning that use of the 
new provisions would have been mandatory--the law as enacted contained 
no such specific exclusion. Instead, the law contains a qualification 
that the activities in question "shall be subject to a rebuttable 
presumption" that they are categorically excluded from further NEPA 
review.[Footnote 31] Whatever this language means, it certainly differs 
from the mandatory exemption language that existed in the House bill. 
Without additional congressional clarification, disagreements over the 
meaning of the provision will continue, a situation acknowledged by 
BLM. 

Although one of BLM's key guidance documents--the 2005 Instruction 
Memorandum--includes language that can be interpreted to mean that BLM 
must use a section 390 categorical exclusion whenever a project meets 
the required conditions, mandatory use is not the current position of 
BLM headquarters. BLM headquarters' 2006 and 2008 presentations on how 
to use section 390 categorical exclusions clearly direct staff to 
approve projects using determinations of NEPA adequacy if using a 
section 390 categorical exclusion would not save time, and they 
advocate caution when deciding to use section 390 categorical 
exclusions. Such directions demonstrate that BLM has taken the position 
that, in practice, some level of discretion is warranted when 
considering section 390 categorical exclusions. Despite this position, 
BLM headquarters officials acknowledged that state offices have the 
authority to mandate the use of section 390 categorical exclusions by 
their field offices. The interpretation by some BLM offices that 
section 390 categorical exclusions are mandatory has raised concerns 
for some environmental groups and others that BLM is using section 390 
categorical exclusions too often and when more appropriate methods for 
approving a project could better protect the natural resources. At the 
same time, some industry representatives believe that BLM must use 
section 390 categorical exclusions whenever a project meets the 
conditions for one and thus BLM is not using them often enough. 

We found that many field offices are using section 390 categorical 
exclusions with some level of discretion, such as choosing to do an 
environmental assessment in cases where projects seem politically 
controversial or may have a significant effect on wildlife. For 
example, the Farmington and Carlsbad, New Mexico, field offices 
prohibit staff from using section 390 categorical exclusions in areas 
formally classified as sensitive, such as areas of critical 
environmental concern.[Footnote 32] In contrast, the Vernal, Utah, 
field office approved section 390 categorical exclusions for activities 
located in areas of critical environmental concern. In addition, some 
officials told us they interpreted the law and BLM's guidance to mean 
that section 390 categorical exclusions are mandatory whenever a 
project meets the conditions for one of the five types of section 390 
categorical exclusions, regardless of whether another NEPA compliance 
approach, such as an environmental assessment or administrative 
categorical exclusion, would also have been applicable. For example, 
according to officials from the Carlsbad, New Mexico, field office, 
they used section 390 CX4 even in situations where they said an 
administrative categorical exclusion would have been applicable and 
quicker, for example, despite the time-consuming effort needed to 
verify that a project fits within the 5-year time limitation for a 
section 390 CX4. 

What Does the Phrase "Rebuttable Presumption" Mean? 

The Energy Policy Act of 2005 does not specify what the "rebuttable 
presumption" provision in section 390 means or how BLM is supposed to 
implement it, which has led to serious disagreements over how to 
interpret the phrase. The law does not clearly explain the meaning of 
the presumption or how to rebut the presumption. Section 390 (a) 
states: 

"action by the Secretary of the Interior in managing the public lands, 
or the Secretary of Agriculture in managing National Forest System 
Lands, with respect to any of the activities described in subsection 
(b) shall be subject to a rebuttable presumption that the use of a 
categorical exclusion under the National Environmental Policy Act of 
1969 (NEPA) would apply if the activity is conducted pursuant to the 
Mineral Leasing Act for the purpose of exploration or development of 
oil or gas." [emphasis added.][Footnote 33] 

Consequently, opinions differ as to what rebuttable presumption refers 
to; what items are open to rebuttal; and in what forum any public 
challenges to the use of section 390 categorical exclusions can be 
made, if any. 

According to Interior officials, the phrase "rebuttable presumption" is 
not typically used in NEPA or environmental case law; both Interior and 
BLM officials have characterized the meaning of the phrase in section 
390 as murky. According to Interior officials, section 390 categorical 
exclusions are allowable as long as there is no convincing 
rebuttal.[Footnote 34] Interior has interpreted this section to mean 
that when a proposed drilling activity proposed in an APD appears to 
meet the requirements of section 390, BLM presumes that a section 390 
categorical exclusion will comply with NEPA unless this presumption is 
rebutted by showing that one or more of the required conditions are not 
present. For example, the presumption that a section 390 CX2 applies to 
a given project could be rebutted by showing that the well described in 
the APD is not on a location or well pad site at which previous 
drilling has occurred within 5 years before the date the proposed well 
is to be spudded. In contrast, environmental groups and others told us 
that the presumption means that significant environmental impacts are 
presumed unlikely to result from the proposed project. They told us 
that they believe the presumption can be rebutted by showing that any 
extraordinary circumstances are present. This rebuttable presumption 
element has given rise to litigation pending in the federal district 
court in Utah. 

Besides the confusion and disagreement over what the rebuttable 
presumption is, uncertainty exists because the law fails to specify the 
process under which any rebuttal can take place. The law does not set 
forth procedures for challenging section 390 categorical exclusion 
decisions during the decision process. Public challenges to the use of 
section 390 categorical exclusions are complicated by the possibility 
that drilling may have already occurred, and the adverse effects may 
already have begun, by the time the public finds out about a project. 
As a result, serious concerns exist as to what part, if any, of a 
section 390 categorical exclusion decision is open to rebuttal and in 
what way the public can challenge BLM's use of section 390 categorical 
exclusions. 

What Level of Public Disclosure Is Required for Section 390 Categorical 
Exclusions? 

Section 390 of the Energy Policy Act of 2005 does not specify 
procedures for involving or informing either the public or other 
government agencies when section 390 categorical exclusions are used. 
According to Interior and BLM officials, there is no requirement to 
publicly disclose that BLM used a section 390 categorical exclusion to 
approve a project or to disclose approved section 390 categorical 
exclusion decision documents. In this context, the public depends on 
the discretion of each field office for such disclosure. As with 
initial 30-day disclosure of summary information related to an APD 
before its approval,[Footnote 35] BLM field offices have different 
degrees and methods of disclosing information related to decisions on 
section 390 categorical exclusions. For example, some field offices, 
such as White River and Glenwood Springs, Colorado, publicly disclose 
online which APDs they approved with section 390 categorical 
exclusions, much as they disclose decisions to use environmental 
assessments or administrative categorical exclusions. Some field 
offices, such as Farmington, New Mexico, and Vernal, Utah, told us they 
have also developed mailing lists for disseminating certain information 
related to section 390 categorical exclusion decisions to interested 
persons, upon request, and the Buffalo, Wyoming, field office posts 
certain approved section 390 categorical exclusion decision documents 
online. In contrast, other field offices, such as Price/Moab, Utah, and 
Pinedale, Wyoming, do not publicly disclose their decisions to use 
section 390 categorical exclusions and, in fact, require the public to 
file Freedom of Information Act requests to identify which projects BLM 
approved using section 390 categorical exclusions and to obtain copies 
of approved section 390 categorical exclusion decision documents. 
[Footnote 36] In some cases, it is difficult for other governmental 
agencies--including state environmental agencies--and the public to 
determine whether BLM has used a section 390 categorical exclusion 
until it is too late to comment on, or challenge, BLM's action. 

When the public and other federal and state agencies do not have a 
reliable or consistent way of determining which projects have been 
approved with section 390 categorical exclusions, they lack a 
fundamental piece of information needed to hold BLM accountable for 
their use. This point is particularly important given that the public 
generally has 20 days to request a state director review of APD 
approvals.[Footnote 37] According to officials from both federal and 
state agencies, government officials outside of BLM also do not know 
when projects are being approved using section 390 categorical 
exclusions--a situation that can hamper federal or state agencies 
responsible for monitoring natural resources affected by drilling and 
energy production, such as air quality, endangered species, or other 
wildlife. 

Key Concepts Underlying One or More Types of Section 390 Categorical 
Exclusions Have Sparked Debate: 

In addition to the fundamental concerns with the law as a whole, the 
law's descriptions of the five types of section 390 categorical 
exclusions have prompted more specific concerns about how to 
appropriately use one or more of the five types of section 390 
categorical exclusions. These concerns relate to (1) the adequacy of 
NEPA documents supporting the use of a particular section 390 
categorical exclusion, (2) consistency with existing NEPA documents, 
(3) the rationale for the 5-year time frame used in some but not all 
types of section 390 categorical exclusions, and (4) the piecemeal 
approach to development fostered by using section 390 categorical 
exclusions. 

Adequacy of Supporting NEPA Documents: 

Individuals and groups, both inside and outside BLM, have raised 
serious concerns about the adequacy of the NEPA documents required to 
support the use of certain types of section 390 categorical exclusions. 
For example, environmental groups and other government agencies 
question the appropriateness of including a land use plan as one of the 
prerequisite environmental analysis documents under section 390 CX3, 
because such resource management plans (and their associated 
environmental impact statements) are the broadest type of analysis of 
potential impacts--a concern that BLM officials acknowledged. By their 
nature, these plans generally do not analyze environmental effects of a 
specific project or at a specific location. BLM officials characterized 
land use plans as a "30,000-foot analysis" of possible development, as 
compared with the analysis the agency generally carries out for an APD, 
which is a much more thorough examination of a specific project in a 
specific location. Furthermore, several groups have alleged that by 
allowing BLM to tie a section 390 categorical exclusion solely to 
higher-level analyses, such as resource management plans and their 
associated environmental impact statements, the law has allowed a shell-
game to occur: that is, at the planning stage BLM can defer site- 
specific NEPA analyses and documentation until the project approval 
stage, and at the project approval stage,[Footnote 38] it can then 
avoid performing such site-specific analysis by using a section 390 CX3 
supported by the resource management plan. For example, while the 2003 
resource management plan in effect for the Farmington, New Mexico, 
field office during our review explicitly states that site-specific 
environmental impacts were not assessed by the environmental impact 
statement and will be deferred to the APD stage, section 390 CX3 
allowed this field office to approve individual projects without 
carrying out this site-specific analysis. According to some 
environmental groups, this shell-game of particular concern with recent 
approvals of a number of controversial new resource management plans, 
such as those released at the end of 2008 for six BLM field offices in 
Utah. Furthermore, while some industry and BLM officials we spoke with 
told us that certain resource management plans contained an adequate 
analysis of potential impacts of oil and gas development, other BLM 
officials and environmental groups advocated for a change in the law's 
wording to specifically exclude resource management plans from the list 
of allowable NEPA documents for section 390 CX3--a position that BLM 
headquarters officials acknowledged has merit. 

Environmental groups have raised similar concerns over the site 
specificity of NEPA documents supporting decisions to use section 390 
CX1. BLM has explicitly listed the various NEPA documents it considers 
as site specific under this categorical exclusion--such as an 
exploratory environmental impact statement--but we were told repeatedly 
by environmental groups and others that site specificity is 
appropriately satisfied only by environmental assessments covering 
individual projects or small areas. 

Concerns have also arisen about whether BLM has approved environmental 
assessments despite knowing that the assessment did not cover the full 
number of wells the operators expected to drill in the area for which 
section 390 categorical exclusions were used to approve APDs. We found 
at least one instance in which a field office approved an initial 
environmental assessment nearly 2 months after the office began the 
approval process for 18 additional wells in that location using section 
390 CX2. Although these 18 additional wells were approved with section 
390 CX2 shortly after the initial environmental assessment itself was 
approved, it appears that BLM staff knew that the operator intended to 
drill these 18 wells before they approved the environmental assessment, 
even though the wells were not included in the scope of that 
environmental assessment. Approval of an environmental assessment that 
was, in effect, outdated before it was signed raises troubling 
questions about the extent to which BLM is using section 390 
categorical exclusions in a manner that undermines NEPA's purposes of 
fully informing the agency itself and the public of the environmental 
consequences of proposed actions. 

Consistency with Existing NEPA Documents: 

Another serious concern is whether section 390 categorical exclusions 
allow BLM to approve projects that are not consistent with the NEPA 
documents to which they are tied, thus allowing BLM to approve 
development in excess of the development scenarios analyzed in the 
supporting NEPA documents. Environmental impact statements associated 
with resource management plans and field development projects, as well 
as environmental assessments for multiwell projects, generally contain 
a reasonably foreseeable development scenario (1) that includes long- 
term projections of the number of wells to be drilled and the acres to 
be disturbed and (2) that may trigger the agency to consider conducting 
additional NEPA analysis in approving activities exceeding these 
projected development levels. Serious concerns have arisen, however, 
that BLM's interpretation and use of section 390 categorical exclusions 
have resulted in approval of well numbers and surface disturbances 
beyond the development levels analyzed in existing NEPA documents. 

Section 390 specifically requires the existence of underlying NEPA 
documents only for section 390 CX1 and CX3. BLM guidance states that 
only section 390 CX1 and CX3 are tied to an underlying NEPA document-- 
a position that BLM reiterated when it issued a correction to its 2008 
NEPA handbook. BLM guidance states that section 390 CX2 does not refer 
to any underlying NEPA document. According to at least one BLM official 
and one industry representative, this position has allowed the Price/ 
Moab, Utah, field office to approve section 390 CX2s for more new wells 
than the number analyzed in the existing environmental assessment for 
the West Tavaputs area. Because the law uses the language "pursuant to 
NEPA" only in reference to section 390 CX1 and CX3, several people we 
interviewed expressed concerns that the law provides BLM with a 
mechanism to authorize development in excess of the reasonably 
foreseeable development scenarios BLM analyzed under NEPA, without 
performing any further NEPA analysis. 

To address concerns that section 390 categorical exclusions enable BLM 
to exceed the limits of the underlying NEPA documents, the Governor of 
Wyoming proposes changing the law from "pursuant to NEPA" to 
"consistent with NEPA"--a change acknowledged as beneficial and 
supported by BLM headquarters staff with whom we spoke. Similarly, 
given concerns about oil and gas development inconsistent with 
reasonably foreseeable development scenarios, the Western Governors' 
Association and the Association of Fish and Wildlife Agencies propose 
changing the law to limit the use of section 390 CX3 so as to better 
protect wildlife. Furthermore, several BLM officials we spoke with told 
us that such language should be applied to all five types of section 
390 categorical exclusions. 

Rationale for the 5-year Time Frames in Some but Not All Section 390 
Categorical Exclusions: 

The inconsistent application of a time limit to some, but not all, 
types of section 390 categorical exclusions has led to claims that such 
constraints are both too long and too short, as well as concerns that 
uniform time constraints should be applied to all types of section 390 
categorical exclusions if they apply to any. Some BLM officials we 
spoke with expressed confusion over why section 390 CX2, CX3, and CX4 
may be used only within 5 years of specified analyses or actions, while 
section 390 CX1 and CX5 do not have such constraints. The reasons for 
constraining some types of section 390 categorical exclusions but not 
others--especially given that well drilling is allowed under section 
390 CX1--were not specified in the law. Nor does the law make clear how 
and why time limits were set at 5 years, although at least one official 
we spoke with assumed this limit was supposed to represent the average 
period NEPA analyses remained up-to-date. According to some BLM 
officials we spoke with, NEPA analyses generally become stale or 
irrelevant after several years as the landscape and resource 
circumstances change. In this light, some expressed concerns that 5 
years was too long, since the energy boom led to development in certain 
areas far beyond what the NEPA analyses considered foreseeable. 
Consequently, for those who see the 5-year time limit as too long, such 
as the Bakersfield, California, field office, the validity of section 
390 categorical exclusions throughout the 5-year window may mean that 
some activities or projects approved as section 390 categorical 
exclusions might be more appropriately approved using new and more 
rigorous NEPA analyses. 

At the same time, others expressed concern that imposing a 5-year time 
limit on certain section 390 categorical exclusions was too short, in 
part, because NEPA analyses may stay relevant for longer than 5 years, 
especially given that staff always conduct on-site inspections of the 
proposed drilling site as part of the APD review and approval process. 
Consequently, for those who see the 5-year time limit as too short, 
such as the Rawlins, Wyoming, field office, the inability to use 
section 390 categorical exclusions after the statutory time limit has 
passed causes them to resume carrying out what they consider to be 
redundant NEPA analyses. Finally, numerous BLM officials and others 
told us that the law's mention of a time limit for section 390 CX2, 
CX3, and CX4--but not section 390 CX1--seemed arbitrary. For example, 
while the law allows the Pinedale, Wyoming, field office to use an 
environmental assessment from 1991 as support in approving an APD with 
a section 390 CX1, it would not allow that same 18-year-old 
environmental assessment to support the same APD if approved with a 
section 390 CX2 or CX3. 

Piecemeal Approach to Development: 

The law's focus on individual wells and projects has raised concerns 
that section 390 categorical exclusions foster a piecemeal approach to 
oil and gas development, which may undermine strategic planning efforts 
that aim, in part, to consider cumulative impacts. Some field offices, 
such as Buffalo, Wyoming, and Glenwood Springs, Colorado, use master 
development plans or other tools that group together multiple wells for 
development. But section 390 categorical exclusions are limited to 
individual wells, thus creating a disincentive, in some cases, to 
approve development according to such master planning techniques. The 
fostering of a piecemeal approach further exacerbates concerns about 
whether (1) BLM can use section 390 categorical exclusions to approve 
the drilling of wells exceeding the number analyzed under NEPA, (2) 
section 390 categorical exclusions allow BLM to bypass the analyses of 
cumulative impacts done to mitigate effects on wildlife and other 
resources, and (3) section 390 creates an incentive to conduct 
shortsighted environmental assessments that will quickly become 
obsolete with the approval of additional wells using section 390 
categorical exclusions. 

Both the Law and BLM's Implementing Guidance Lack Clear Definitions of 
Some Key Terms: 

BLM officials, industry representatives, environmental groups, and 
others have raised numerous concerns about how to interpret and apply 
key terms that describe the conditions that must be met when using a 
section 390 categorical exclusion. In particular, each of the five 
types of section 390 categorical exclusions contain terminology that is 
undefined in the law and for which BLM has not provided clear or 
complete guidance. Specifically: 

* "Individual surface disturbances" under section 390 CX1. The law does 
not clarify what is allowable under section 390 CX1's "individual 
surface disturbances" condition. In addition, while the law uses the 
term "individual"--which is singular--it also uses the term 
"disturbances"--which is plural. This mixture has caused confusion and 
disagreement over whether the law allows BLM to use a section 390 CX1 
to approve multiple wells. According to BLM headquarters officials and 
presentations they developed in 2006 and 2008 for state and field 
offices, BLM interprets this term to mean that each APD requires its 
own, separate section 390 CX1 decision.[Footnote 39] Nevertheless, 
BLM's field office officials we spoke with relied on the 2005 
instruction memorandum, which contained confusing and seemingly 
contradictory guidance. The instruction memorandum gives an example of 
two or more wells to describe activities allowable under "individual 
surface disturbances"--implying that multiple wells may be allowable. 
The same guidance, however, also directs BLM to consider each APD 
separately, even in cases where an operator proposes multiple wells 
under a single application--implying that only one well is allowable. 
In light of such confusing guidance from BLM and vague terminology in 
the law, BLM field offices have wide-ranging interpretations about when 
it is appropriate to use section 390 CX1, with some prohibiting and 
many others erroneously approving multiple wells under a single section 
390 CX1. Moreover, despite this confusion, BLM did not clarify its 
guidance--and in fact kept the same wording--when it revised this 
guidance in 2008 as part of its NEPA handbook. 

* "Maintenance of a minor activity" under section 390 CX5. Neither the 
law nor BLM's primary guidance clearly defines "maintenance of a minor 
activity." Numerous BLM officials we spoke with told us they did not 
have a clear sense of what activities fell under "maintenance of a 
minor activity." The concerns are varied and include (1) uncertainty as 
to what is considered maintenance that would need additional NEPA 
analysis for which a section 390 categorical exclusion could apply; (2) 
uncertainty as to what BLM considers minor; and (3) how it is possible 
to conduct maintenance on an activity at all, and thus what would be 
appropriate under section 390 CX5. Further, BLM headquarters' 
presentations on section 390 categorical exclusions question the need 
for this exclusion and whether any situations exist that would meet 
this condition. In this context, many field offices have never or 
rarely used section 390 CX5 to approve oil or gas activities, with 
several telling us that they did not understand when it should be used 
or thought it was too risky to use. Nonetheless, several BLM field 
offices broadly interpreted this condition and approved activities, 
such as closing well locations and relocating discharge pits in the 
Worland/Cody and Buffalo, Wyoming, field offices respectively, using 
section 390 CX5. And at least two BLM field offices approved 
activities, such as drilling a gas storage well or installing a 
pipeline, using section 390 CX5 in violation of the law. The 
inconsistency in how field offices interpret and use section 390 CX5, 
and the sense that field offices are approving ineligible projects 
under section 390 CX5, have raised concerns that BLM is not providing 
adequate oversight of section 390 categorical exclusions. 

* "Construction or major renovation of a building or facility" under 
section 390 CX5. The law does not define what should be considered as 
construction or major renovation. Confusion stems from the fact that 
this phrase can be read two different ways--to refer (a) to either the 
construction of a building or facility or the major renovation of a 
building or facility or (b) to any construction or the major renovation 
of a building or facility. While BLM's key guidance provides some 
direction as to what activities are allowable--by excluding the 
addition of a compressor or gas-processing plant--it does not address 
this confusion, in that it fails to clarify whether all construction is 
prohibited or just the construction of a building or facility. 
Furthermore, it fails to provide examples of activities that are 
allowable, such as whether drilling gas storage wells can be included. 
This lack of clarity has led several BLM field offices to use section 
390 CX5s sparingly, if at all. At the same time, other field offices 
have used it more widely despite the confusion, causing some to 
question whether BLM is using section 390 CX5 in cases where it should 
not--such as to permit drilling certain types of auxiliary wells 
associated with oil and gas production--and where more rigorous 
environmental analysis and public disclosure might have been warranted. 

* "Location" under section 390 CX2. The law provides no definition or 
additional explanation of what a "location" is and how it is similar to 
or different from a well pad site. Similarly, BLM's primary 
implementing guidance fails to distinguish between the two terms. In 
fact, BLM guidance defines both "well pad site" and "location" the same 
way--as a previously disturbed or constructed well pad used in support 
of drilling a well. In addition, limitations set forth in the guidance 
also fail to distinguish between "location" and "well pad 
site."[Footnote 40] While the term "well pad site" is generally 
understood, BLM has not explained how or if that term differs from 
"location" and whether "location" includes surfaces previously analyzed 
but not disturbed--or subsequently reclaimed--by the initial drilling. 
Such an omission has led some to raise concerns that BLM is approving 
projects under section 390 CX2 that disturb more area--and thus the 
resident wildlife--than should be allowed. 

* "Right-of-way corridor" under section 390 CX4. The law does not 
define what a right-of-way corridor is or how it differs from, or is 
similar to, a specific right-of-way. In contrast, BLM's key 
implementing guidance sets out some parameters for what does and does 
not constitute a right-of-way corridor, including stating that any type 
of existing right-of-way corridor can be used for new pipeline 
placement under section 390 CX4 and clarifying that it sees a right-of- 
way corridor as not limited to rights-of-way authorized solely under 
FLPMA. Despite this guidance, however, we repeatedly heard concerns 
from BLM staff that they were confused by, and uncomfortable using, 
section 390 CX4 because of confusion over how to interpret "corridor." 
Consequently, some field offices used section 390 CX4 few times, if at 
all. In addition, according to an official from the Bakersfield, 
California, field office, because it is the staff's understanding that 
only right-of-way corridors authorized legislatively are allowable 
under section 390 CX4--such as the West-wide Energy Corridor, which 
designates energy corridors in 11 western states--they were unable to 
use section 390 CX4 at all. 

The failure of both the law and BLM guidance to clearly define key 
conditions that projects must meet to be eligible for approval with a 
section 390 categorical exclusion has caused confusion among BLM 
officials, industry, and the public over what activities qualify for 
section 390 categorical exclusions. This confusion has also exacerbated 
concerns that using section 390 categorical exclusions decreases the 
transparency of decisions, especially in cases where BLM decides that 
certain projects meet the required conditions for using section 390 
categorical exclusions--such as approving the drilling of dozens of 
wells as allowable "individual surface disturbances" under section 390 
CX1 or permitting the drilling of an oil or gas well as "maintenance of 
a minor activity" under section 390 CX5. Moreover, concerns have arisen 
that when BLM approves ineligible activities, it may be more likely 
that the agency is overlooking adverse environment effects. For 
example, certain projects erroneously approved as section 390 
categorical exclusions may have required more rigorous environmental 
analyses--such as environmental assessments or environmental impact 
statements--which could have assessed the need to mitigate potentially 
adverse effects on natural resources like wildlife and air quality. BLM 
recognized the potential for controversy and confusion in using section 
390 categorical exclusions when it developed internal guidance to 
communicate its interpretation of the new law and to clarify certain 
required conditions that projects must meet to be eligible for section 
390 categorical exclusions. It did not, however, choose to issue this 
information as an official agency regulation--a mechanism that would 
have been open to public review and comment, would have required BLM to 
respond to concerns raised, and likely would have held BLM to a higher 
standard in terms of oversight. 

Conclusions: 

BLM is a multiple-use agency, and oil and gas development is one of the 
many uses that occur on public lands. As a large landowner in the 
mountain West, BLM stands at the center of controversy between 
protecting the nation's natural resources and developing the nation's 
energy and mineral resources to help alleviate dependence on foreign 
sources of oil. Section 390 of the Energy Policy Act of 2005, in part, 
has been interpreted by some to shift the agency's priorities more 
heavily toward resource extraction at the expense of certain other 
agency missions, especially protecting its environmental resources. It 
is unclear, however, whether this shift was intended by the 
legislation. Virtually no legislative history exists that sheds light 
on how section 390 of the Energy Policy Act of 2005 should be 
interpreted. The lack of clarity in key provisions and phrases in the 
law itself and this lack of a clarifying legislative history have thus 
left virtually every key provision of section 390 open to conflicting 
interpretations. In some cases, BLM as the main implementing agency has 
made legal interpretations in an effort to clarify guidance for its 
state and field offices, but in other cases it has not. Interior and 
BLM have decided that the extraordinary circumstances checklist should 
not be used for section 390 categorical exclusions and that the use of 
section 390 categorical exclusions can only be "rebutted" on the 
grounds that BLM is not following the law. These issues, among others, 
are currently being litigated in one of the first cases in federal 
court on section 390 categorical exclusions. Litigation can be costly 
and time-consuming, and it may not put to rest or resolve all the 
questions about the law. 

The problems with section 390 have not gone unnoticed in Congress. 
Several bills were introduced in the last Congress and in the current 
one that would address the rebuttable presumption issue.[Footnote 41] 
Consideration of bills such as these would give Congress the 
opportunity to clarify this language and other murky provisions in 
section 390. Regardless of the confusion surrounding certain elements 
of the law as currently written, BLM is responsible for ensuring that 
its field offices use section 390 categorical exclusions appropriately. 
We found numerous instances of both violations of the law and 
noncompliance with BLM's existing guidance. The primary guidance 
documents BLM headquarters disseminated to its state and field offices 
provided some useful information on implementing section 390 of the 
Energy Policy Act of 2005 but failed to provide explicit and sufficient 
guidance on how and when to use section 390 categorical exclusions. 
Without corrections to the gaps and shortcomings in BLM's existing 
guidance, compliance problems will likely persist that may thwart 
NEPA's twin aims of ensuring that both BLM and the public are fully 
informed of the environmental consequences of BLM's actions, field 
offices will continue to interpret section 390 categorical exclusions 
inconsistently and sometimes incorrectly, and the public's confidence 
and trust in BLM's decision making will continue to erode. 

One technique that has proven helpful in ensuring compliance with NEPA 
decision-making processes has been the development of standardized 
templates for field office staff to follow. While BLM has developed and 
disseminated templates to its field offices for documenting certain 
NEPA decisions, such as environmental assessments and administrative 
categorical exclusions, it has no such agencywide template for section 
390 categorical exclusions. As a result, some field offices have 
developed informal or formal templates of their own. These templates 
differ greatly from field office to field office, however, and some 
staff have acknowledged that mistaken use of section 390 categorical 
exclusions has been compounded by continued use of faulty templates. 
BLM management acknowledges that a standardized document would be 
helpful in ensuring that section 390 categorical exclusions are used 
appropriately and had hoped to develop such a template--especially in 
light of the varied and particular criteria required by each of the 
five types of section 390 categorical exclusions--but BLM has not done 
so to date. Without consistent minimum information included in decision 
documents for section 390 categorical exclusions, the public lacks the 
information needed in many cases to not only understand BLM's rationale 
for using a particular type of section 390 categorical exclusion, but 
also to rebut the agency's presumption in using a section 390 
categorical exclusion. This variability undermines BLM's implementation 
of section 390 of the Energy Policy Act of 2005, as well as public 
understanding of and confidence in BLM's actions. 

Furthermore, BLM must ensure that its guidance is followed. 
Implementing a new law can be a high-risk endeavor requiring 
intensified oversight in the start-up years, to help ensure compliance 
until the processes become standard. Without a plan or mechanism for 
BLM management at the headquarters or state level to oversee the use of 
section 390 categorical exclusions by its field offices, BLM lacks 
basic tools to ensure compliance with either the Energy Policy Act of 
2005 or its own guidance. Consequently, noncompliance with the law and 
BLM guidance--such as policies that allow, in practice, drilling after 
the 5-year time limit has expired or that allow inappropriate 
nondrilling activities to be approved--has been allowed to persist. 
Oversight is needed to help ensure that section 390 categorical 
exclusions are used appropriately--neither under-nor overused--and to 
ensure that the agencies adequately further NEPA's purposes. 

Matter for Congressional Consideration: 

This report has identified a number of significant issues with respect 
to section 390 of the Energy Policy Act of 2005 that have become a 
source of confusion for BLM and its field offices as they implement the 
law. Congress should consider amending section 390 to clarify and 
resolve some of the key issues identified in this report, including, 
but not limited to, (1) clearly specifying whether section 390 
categorical exclusions apply even in the presence of extraordinary 
circumstances and (2) clarifying what the phrase "rebuttable 
presumption" means and how BLM must implement it in the context of 
section 390. 

Recommendations for Executive Action: 

In the interim, to improve BLM field offices' implementation of section 
390 categorical exclusions--to reduce noncompliance and clarify how and 
when section 390 categorical exclusions are to be used--we recommend 
that the Secretary of the Interior direct the Director of BLM to take 
the following three actions: 

* issue detailed and explicit guidance that addresses the gaps and 
shortcomings in its present guidance; 

* provide standardized templates or checklists for each of the five 
types of section 390 categorical exclusions, which would specify, at 
minimum, what documentation is required to justify their use; and: 

* develop and implement a plan for overseeing the use of section 390 
categorical exclusions to ensure compliance with both law and guidance. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Department of the Interior 
for review and comment. The department concurred with our 
recommendations and stated that it and BLM will take immediate steps to 
ensure that the use of section 390 categorical exclusions is consistent 
with the Energy Policy Act of 2005 and BLM guidance. The department 
also provided several technical clarifications, which we incorporated 
as appropriate. Appendix IV contains the Department of the Interior's 
comment letter. 

We are sending copies of this report to the appropriate congressional 
committees, the Secretary of the Interior, the Director of the Bureau 
of Land Management, the Administrator of the Environmental Protection 
Agency, and other interested parties. In addition, this report will be 
available at no charge on the GAO Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff members have any questions about this report, 
please contact me at (202) 512-3841 or nazzaror@gao.gov. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. GAO staff who made major 
contributions to this report are listed in appendix V. 

Signed by: 

Robin M. Nazzaro: 
Director, Natural Resources and Environment: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

This report examines (1) the extent to which the Department of the 
Interior's Bureau of Land Management (BLM) has used section 390 
categorical exclusions each fiscal year from 2006 through 2008 and the 
benefits, if any, associated with their use; (2) the extent to which 
BLM has used section 390 categorical exclusions in compliance with the 
Energy Policy Act of 2005 and internal BLM guidance; and (3) concerns, 
if any, associated with section 390 categorical exclusions. We included 
the use of section 390 categorical exclusions on the Department of 
Agriculture's U.S. Forest Service lands in the data summarizing the 
extent to which BLM used section 390 categorical exclusions,[Footnote 
42] because while the Forest Service is responsible for approving all 
above-ground use of their lands, BLM independently evaluates and 
approves the applications for permit to drill (APD), per a memorandum 
of understanding between the two agencies. Section 390 categorical 
exclusions are not used on Indian trust lands. 

For all three report objectives, we reviewed relevant laws, 
regulations, and Department of the Interior and BLM guidance. We 
interviewed officials in BLM headquarters and the 11 BLM field offices 
(and their associated state offices) that processed the most APDs from 
fiscal year 2006 through fiscal year 2008. Specifically, we visited and 
interviewed officials in three BLM state offices (Colorado, Utah, and 
Wyoming) and 8 BLM field offices (Buffalo, Wyoming; Casper, Wyoming; 
Farmington, New Mexico; Glenwood Springs, Colorado; Pinedale, Wyoming; 
Price/Moab, Utah; Rawlins, Wyoming; and Vernal, Utah), and interviewed 
by telephone officials in two additional state offices (California, New 
Mexico) and 3 additional field offices (Bakersfield, California; 
Carlsbad/Hobbs, New Mexico; and White River, Colorado). In addition, we 
interviewed representatives from industry, historic preservation 
groups, citizens' groups, and environmental groups about actual and 
potential benefits and concerns related to section 390 categorical 
exclusions or BLM's use the exclusions. In addition, we collected and 
analyzed data from BLM's Automated Fluid Minerals Support System 
database, and we reviewed section 390 categorical exclusion decision 
documents provided to us by BLM field offices. 

To determine the extent to which BLM has used section 390 categorical 
exclusions each fiscal year from 2006 through 2008, we requested data 
from BLM headquarters and all 30 BLM field offices that processed APDs 
during this period. In addition, we contacted officials in many of 
these field offices to explain, clarify, and correct incomplete or 
possibly erroneous data in the summary data files they provided us. We 
compared the data supplied by BLM headquarters with those supplied by 
each of the 30 BLM field offices and sought clarification and 
explanation for data discrepancies. In addition, our review of more 
than 300 section 390 categorical exclusion decision documents (see 
detailed explanation below) identified a small number of record-keeping 
errors in field office data, which we corrected in the summary data 
files where possible. The small number of discrepancies identified 
during our review of specific section 390 categorical exclusion 
decision documents did not appear to be systematic and do not affect 
the overall accuracy of the summary data presented in this report. 

To determine the benefits of using section 390 categorical exclusions, 
we conducted semi-structured interviews with the 11 BLM field offices 
that processed the most APDs during fiscal years 2006 through 2008. For 
these interviews, we spoke with a natural resource specialist--a BLM 
official typically leading the team analyzing proposed oil and gas 
projects--from each field office. We used a standardized interview 
protocol, in which respondents were asked a standard set of open-ended 
questions. We asked these officials to identify factors that contribute 
to, and factors that hinder, their ability to use section 390 
categorical exclusions to expedite processing of APDs and sundry 
notices for oil and gas projects, as well as how much time, if any, is 
saved by using section 390 categorical exclusions instead of 
environmental assessments or determinations of NEPA adequacy. To find 
concrete examples of the factors contributing or hindering the use of 
section 390 categorical exclusions, we also discussed specific cases in 
which field offices used section 390 categorical exclusions. 

In addition to these interviews, we also analyzed data on processing 
time and environmental inspections, in an attempt to determine whether 
processing times decreased or inspection frequencies increased as a 
result of using section 390 categorical exclusions. Adequate data were 
not available to support any conclusions, however. We analyzed data 
from BLM's Automated Fluid Minerals Support System database but found 
that the database's available data elements were not sufficient to 
isolate changes in processing times resulting from the use of section 
390 categorical exclusions, primarily because this database does not 
identify whether an APD was approved with a section 390 categorical 
exclusion or other NEPA compliance document, such as an environmental 
assessment or determination of NEPA adequacy. This analysis was also 
hampered because field offices used different protocols for entering 
information into certain data fields, making it infeasible to compare 
changes in APD processing times. With data on environmental 
inspections, we attempted to determine whether use of section 390 
categorical exclusions correlated with increased environmental 
inspections, while accounting for change in full-time staff. But BLM 
was unable to supply us with personnel data showing the number of full- 
time equivalent employees working at each field office from fiscal year 
2006 through fiscal year 2008. Therefore, although we were able to 
determine the number of environmental inspections and the number of 
hours spent on environmental inspections at each BLM field office, we 
were not able to isolate the contribution of time saved using section 
390 categorical exclusions to any increase in environmental 
inspections. 

To determine the extent to which BLM's use of section 390 categorical 
exclusions was in compliance with the Energy Policy Act of 2005 and 
internal BLM guidance, we reviewed a nongeneralizable random sample of 
section 390 categorical exclusion decisions documents. In order to 
obtain a balanced assessment of the extent of any violations, we 
selected these decision documents at random from each of the 26 BLM 
field offices that used section 390 categorical exclusions during 
fiscal years 2006 through 2008. While we did not design our sample to 
be generalizable, and therefore our results cannot be used to estimate 
the overall number of such violations, we reviewed at least a small 
sample of each type of section 390 categorical exclusion decision 
documents from each office that used them. Specifically, we drew our 
sample as follows: (1) if a field office used fewer than 10 of a 
particular section 390 categorical exclusion in fiscal years 2006 
through 2008, we randomly chose two decision documents; (2) if a field 
office used 11 through 100 of a particular section 390 categorical 
exclusion, we randomly chose 3 decision documents; and (3) if a field 
office used more than 100 of a particular section 390 categorical 
exclusion, we randomly chose 5 decision documents. For a variety of 
reasons--some field offices were unable to locate decision documents, 
some had mislabeled decision documents, and some were unable to provide 
them within the time frame necessary for our analysis--we were not able 
to obtain all of the decision documents from this initial request. 
However, to ensure that our sample covered, to the greatest extent 
possible, each field office's uses of section 390 categorical 
exclusions, we supplemented the initial sample by requesting additional 
decision documents from select offices. In total, we analyzed 215 
section 390 categorical exclusion decision documents from the 26 BLM 
field offices that used them from fiscal year 2006 through fiscal year 
2008. The sample was not designed to project an overall compliance rate 
for all uses of section 390 categorical exclusions during the time 
period, but rather to provide a general sense of whether there were any 
decisions that violated the law or were not in compliance with BLM 
guidance on implementing section 390 categorical exclusions and, if so, 
to identify the types of such violations or noncompliance. To ensure we 
analyzed each document consistently, we used a standardized data 
collection instrument to review these decision documents and any 
associated conditions of approval or other material supplied by BLM 
field offices as part of their justifications for using each section 
390 categorical exclusion. In cases where we found actual or apparent 
violations or noncompliance, we followed up with individual field 
offices to ascertain if such instances were isolated or systemic. This 
follow-up included conversations with field office officials, requests 
for and review of clarifying documentation on particular issues such as 
conditions of approval, as well as requests for additional section 390 
categorical exclusion decision documents beyond those originally 
included as part of the sample of 215. In total, we reviewed more than 
300 section 390 categorical exclusion decision documents. We 
categorized and summarized violations of and noncompliance with BLM 
guidance on the basis of this review. 

Table 6: Sample Size of Section 390 Categorical Exclusions from BLM 
Field Offices: 

BLM Field office: Buffalo, Wyoming; 
Total APDs (number sampled): Section 390 CX1: 183 (5); 
Total APDs (number sampled): Section 390 CX2: 226 (5); 
Total APDs (number sampled): Section 390 CX3: 156 (5); 
Total APDs (number sampled): Section 390 CX4: 24 (5); 
Total APDs (number sampled): Section 390 CX5: 49 (5); 
Total APDs (number sampled): Total: 638 (25). 

BLM Field office: Rawlins, Wyoming; 
Total APDs (number sampled): Section 390 CX1: 174 (5); 
Total APDs (number sampled): Section 390 CX2: 24 (3); 
Total APDs (number sampled): Section 390 CX3: 24 (4); 
Total APDs (number sampled): Section 390 CX4: 23 (3); 
Total APDs (number sampled): Section 390 CX5: 14 (3); 
Total APDs (number sampled): Total: 259 (18). 

BLM Field office: Pinedale, Wyoming; 
Total APDs (number sampled): Section 390 CX1: 88 (3); 
Total APDs (number sampled): Section 390 CX2: 672 (4); 
Total APDs (number sampled): Section 390 CX3: 749 (6); 
Total APDs (number sampled): Section 390 CX4: 5 (2); 
Total APDs (number sampled): Section 390 CX5: 8 (2); 
Total APDs (number sampled): Total: 1,522 (17). 

BLM Field office: Glenwood Springs. Colorado; 
Total APDs (number sampled): Section 390 CX1: 211 (4); 
Total APDs (number sampled): Section 390 CX2: 207 (4); 
Total APDs (number sampled): Section 390 CX3: 38 (5); 
Total APDs (number sampled): Section 390 CX4: 17 (3); 
Total APDs (number sampled): Section 390 CX5: 1 (1); 
Total APDs (number sampled): Total: 474 (17). 

BLM Field office: Carlsbad/Hobbs, New Mexico; 
Total APDs (number sampled): Section 390 CX1: 4 (0); 
Total APDs (number sampled): Section 390 CX2: 14 (6); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 50 (6); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 68 (12). 

BLM Field office: White River, Colorado; 
Total APDs (number sampled): Section 390 CX1: 18 (2); 
Total APDs (number sampled): Section 390 CX2: 37 (3); 
Total APDs (number sampled): Section 390 CX3: 18 (1); 
Total APDs (number sampled): Section 390 CX4: 6 (2); 
Total APDs (number sampled): Section 390 CX5: 3 (2); 
Total APDs (number sampled): Total: 82 (10). 

BLM Field office: Vernal, Utah; 
Total APDs (number sampled): Section 390 CX1: 70 (4); 
Total APDs (number sampled): Section 390 CX2: 22 (1); 
Total APDs (number sampled): Section 390 CX3: 1,076 (2); 
Total APDs (number sampled): Section 390 CX4: 21 (2); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 1,189 (9). 

BLM Field office: Casper, Wyoming; 
Total APDs (number sampled): Section 390 CX1: 51 (2); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 269 (5); 
Total APDs (number sampled): Section 390 CX4: 2 (1); 
Total APDs (number sampled): Section 390 CX5: 56 (1); 
Total APDs (number sampled): Total: 378 (9). 

BLM Field office: Bakersfield, California; 
Total APDs (number sampled): Section 390 CX1: 61 (4); 
Total APDs (number sampled): Section 390 CX2: 27 (0); 
Total APDs (number sampled): Section 390 CX3: 199 (3); 
Total APDs (number sampled): Section 390 CX4: 2 (2); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 289 (9). 

BLM Field office: Price/Moab, Utah; 
Total APDs (number sampled): Section 390 CX1: 45 (3); 
Total APDs (number sampled): Section 390 CX2: 57 (3); 
Total APDs (number sampled): Section 390 CX3: 20 (3); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 122 (9). 

BLM Field office: Worland/Cody, Wyoming; 
Total APDs (number sampled): Section 390 CX1: 36 (3); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 46 (3); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 33 (3); 
Total APDs (number sampled): Total: 115 (9). 

BLM Field office: Lander, Wyoming; 
Total APDs (number sampled): Section 390 CX1: 22 (2); 
Total APDs (number sampled): Section 390 CX2: 5 (2); 
Total APDs (number sampled): Section 390 CX3: 2 (2); 
Total APDs (number sampled): Section 390 CX4: 7 (2); 
Total APDs (number sampled): Section 390 CX5: 1 (1); 
Total APDs (number sampled): Total: 37 (9). 

BLM Field office: Grand Junction, Colorado; 
Total APDs (number sampled): Section 390 CX1: 5 (2); 
Total APDs (number sampled): Section 390 CX2: 26 (2); 
Total APDs (number sampled): Section 390 CX3: 19 (2); 
Total APDs (number sampled): Section 390 CX4: 6 (2); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 56 (8). 

BLM Field office: Jackson, Mississippi; 
Total APDs (number sampled): Section 390 CX1: 52 (4); 
Total APDs (number sampled): Section 390 CX2: 5 (1); 
Total APDs (number sampled): Section 390 CX3: 6 (2); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 63 (7). 

BLM Field office: Anchorage, Alaska; 
Total APDs (number sampled): Section 390 CX1: 3 (2); 
Total APDs (number sampled): Section 390 CX2: 10 (2); 
Total APDs (number sampled): Section 390 CX3: 1 (1); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 2 (2); 
Total APDs (number sampled): Total: 16 (7). 

BLM Field office: Kemmerer, Wyoming; 
Total APDs (number sampled): Section 390 CX1: 33 (3); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 1 (1); 
Total APDs (number sampled): Section 390 CX5: 4 (2); 
Total APDs (number sampled): Total: 38 (6). 

BLM Field office: Little Snake, Colorado; 
Total APDs (number sampled): Section 390 CX1: 8 (2); 
Total APDs (number sampled): Section 390 CX2: 5 (2); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 3 (2); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 16 (6). 

BLM Field office: Farmington, New Mexico; 
Total APDs (number sampled): Section 390 CX1: 0 (0); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 1,221 (5); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 1,221 (5). 

BLM Field office: Reno, Nevada; 
Total APDs (number sampled): Section 390 CX1: 2 (2); 
Total APDs (number sampled): Section 390 CX2: 5 (3); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 7 (5). 

BLM Field office: Salt Lake, Utah; 
Total APDs (number sampled): Section 390 CX1: 4 (2); 
Total APDs (number sampled): Section 390 CX2: 3 (2); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 7 (4). 

BLM Field office: Dickinson, North Dakota; 
Total APDs (number sampled): Section 390 CX1: 0 (0); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 29 (3); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 29 (3). 

BLM Field office: Tulsa, Oklahoma; 
Total APDs (number sampled): Section 390 CX1: 0 (0); 
Total APDs (number sampled): Section 390 CX2: 25 (3); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 25 (3). 

BLM Field office: Milwaukee, Wisconsin; 
Total APDs (number sampled): Section 390 CX1: 0 (0); 
Total APDs (number sampled): Section 390 CX2: 1 (1); 
Total APDs (number sampled): Section 390 CX3: 3 (2); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 4 (3). 

BLM Field office: San Juan Public Lands Center, Colorado; 
Total APDs (number sampled): Section 390 CX1: 0 (0); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 7 (2); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 7 (2). 

BLM Field office: Cañon City, Colorado; 
Total APDs (number sampled): Section 390 CX1: 2 (2); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 2 (2). 

BLM Field office: Great Falls, Montana; 
Total APDs (number sampled): Section 390 CX1: 1 (1); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 1 (1). 

BLM Field office: Roswell, New Mexico; 
Total APDs (number sampled): Section 390 CX1: 0 (0); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 0 (0). 

BLM Field office: Rock Springs, Wyoming; 
Total APDs (number sampled): Section 390 CX1: 0 (0); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 0 (0). 

BLM Field office: Miles City, Montana; 
Total APDs (number sampled): Section 390 CX1: 0 (0); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 0 (0). 

BLM Field office: Newcastle, Wyoming; 
Total APDs (number sampled): Section 390 CX1: 0 (0); 
Total APDs (number sampled): Section 390 CX2: 0 (0); 
Total APDs (number sampled): Section 390 CX3: 0 (0); 
Total APDs (number sampled): Section 390 CX4: 0 (0); 
Total APDs (number sampled): Section 390 CX5: 0 (0); 
Total APDs (number sampled): Total: 0 (0). 

BLM Field office: Total; 
Total APDs (number sampled): Section 390 CX1: 1,073 (57); 
Total APDs (number sampled): Section 390 CX2: 1,371 (47); 
Total APDs (number sampled): Section 390 CX3: 3,883 (56); 
Total APDs (number sampled): Section 390 CX4: 167 (33); 
Total APDs (number sampled): Section 390 CX5: 171 (22); 
Total APDs (number sampled): Total: 6,665 (215). 

Source: GAO. 

Note: Based on initial discussions with BLM officials, we did not 
include section 390 categorical exclusion decision documents approved 
by the U.S. Forest Service in our sample. After we had analyzed our 
sample, however, BLM changed its position and told us that section 390 
categorical exclusions approved by the Forest Service should have been 
included. As such, we included these in tables 1, 2, and 3, which 
present the overall number of categorical exclusions used in fiscal 
years 2006 through 2008, but not in this table, which presents the 
totals in each office from which we drew our sample. 

[End of table] 

To determine the key concerns, if any, associated with section 390 
categorical exclusions, we reviewed relevant land-use planning 
documents, including resource management plans and environmental impact 
statements. We interviewed BLM headquarters, state, and field office 
officials; industry representatives; environmental groups; citizens' 
groups; historic-preservation groups; and officials from state 
government and federal regulatory agencies involved in oil and gas 
development on federal land. We synthesized the information gathered 
during these interviews to identify the kind of concerns raised by 
these parties.[Footnote 43] To ascertain and understand the legal 
interpretations of section 390 of the Energy Policy Act of 2005, we 
also spoke with officials from Interior's Office of General Counsel. 

We conducted this performance audit from September 2008 through 
September 2009, in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: List of Extraordinary Circumstances for Administrative 
Categorical Exclusions: 

BLM's NEPA handbook,[Footnote 44] appendix 5, contains the follow list 
of extraordinary circumstances that apply to administrative categorical 
exclusions. 

"Before any non-Energy Act [categorical exclusion] is used, you must 
conduct sufficient review to determine if any of the following 
extraordinary circumstances apply (516 DM 2, Appendix 2). If any of the 
extraordinary circumstances are applicable to the action being 
considered, either an environmental assessment or an environmental 
impact statement must be prepared for the action. Part 516 of the 
Departmental Manual (516 DM 2, Appendix 2) states that extraordinary 
circumstances exist for individual actions within [categorical 
exclusions] which may: 

2.1 Have significant impacts on public health or safety. 

2.2 Have significant impacts on such natural resources and unique 
geographic characteristics as historic or cultural resources; park, 
recreation or refuge lands; wilderness areas; wild or scenic rivers; 
national natural landmarks; sole or principal drinking water aquifers; 
prime farmlands; wetlands (Executive Order 11990); floodplains 
(Executive Order 11988); national monuments; migratory birds; and other 
ecologically significant or critical areas. 

2.3 Have highly controversial environmental effects or involve 
unresolved conflicts concerning alternative uses of available resources 
[NEPA Section 102(2)(E)]. 

2.4 Have highly uncertain and potentially significant environmental 
effects or involve unique or unknown environmental risks. 

2.5 Establish a precedent for future action or represent a decision in 
principle about future actions with potentially significant 
environmental effects. 

2.6 Have a direct relationship to other actions with individually 
insignificant but cumulatively significant environmental effects. 

2.7 Have significant impacts on properties listed, or eligible for 
listing, on the National Register of Historic Places as determined by 
either the bureau or office. 

2.8 Have significant impacts on species listed, or proposed to be 
listed, on the List of Endangered or Threatened Species, or have 
significant impacts on designated Critical Habitat for these species. 

2.9 Violate a Federal law, or a State, local, or tribal law or 
requirement imposed for the protection of the environment. 

2.10 Have a disproportionately high and adverse effect on low income or 
minority populations (Executive Order 12898). 

2.11 Limit access to and ceremonial use of Indian sacred sites on 
Federal lands by Indian religious practitioners or significantly 
adversely affect the physical integrity of such sacred sites (Executive 
Order 13007). 

2.12 Contribute to the introduction, continued existence, or spread of 
noxious weeds or nonnative invasive species known to occur in the area 
or actions that may promote the introduction, growth, or expansion of 
the range of such species (Federal Noxious Weed Control Act and 
Executive Order 13112)." 

[End of section] 

Appendix III: of BLM Field Office Confusion between Section 390 
Categorical Exclusions and Onshore Oil and Gas Order No. 1: 

We found confusion at three BLM field offices over how long an APD 
approved using section 390 CX2 and CX3 remains valid. A new well 
approved using a section 390 CX2 may be drilled anytime within 5 years 
after a previously approved drilling activity has occurred on the same 
site. In contrast, BLM's Onshore Oil and Gas Order No.1., issued on 
October 21, 1983, and revised on March 7, 2007, states that an APD 
approval is generally valid for 2 years from the date that it is 
approved. If the operator submits a written request before the original 
approval expires, BLM may extend the APD's validity for up to 2 
additional years Thus, the APD approved with section 390 CX2 is valid 
until whichever of these dates comes first. We found two BLM field 
offices, however--Bakersfield, California and Glenwood Springs, 
Colorado--that interpreted Section 390 CX2 as requiring that the APD be 
approved within 5 years of the last drilling activity on the same site. 
In both offices, officials told us that they set the expiration date 2 
years from the date of that APD approval with a possible 2-year 
extension, in accordance with Onshore Oil and Gas Order No. 1, 
regardless of whether the 5 years for the section 390 categorical 
exclusion had elapsed. If a field office applied this erroneous 
interpretation of the law and BLM guidance, it could allow drilling of 
a new well up to 9 years after the last drilling activity, and up to 4 
years after such new drilling ceased to be legal under section 390 CX2 
of the Energy Policy Act. A similar misinterpretation of the time 
frames associated with section 390 CX3 is also possible (see figure 6). 
In this case, the expiration of the section 390 CX3 is tied to the 
approval date of the NEPA document underlying the APD approval. We 
found one BLM field office--White River, Colorado--that interpreted 
section 390 CX3 in this way. 

Although we did not find examples where misinterpretation of the law 
and BLM guidance for section 390 CX2 or CX3 resulted in the drilling of 
new wells after the 5-year time frames associated with the law expired, 
we did find that these three field offices approved section 390 
decision documents including erroneous expiration dates resulting from 
this misinterpretation. 

Figure 6: Depiction of the Confusion Surrounding the 5-Year Time Frames 
for Section 390 CX2 and CX3: 

[Refer to PDF for image: illustration] 

Section 390 categorical exclusion correctly used: 
Date of last drilling activity on well pad or date underlying NEPA 
document was approved: start of Year 1; 
Drilling allowed: Year 1 through Year 5; 
APD for new well approved; permit expires 5 years after last drilling 
activity or 5 years after approval of underlying NEPA document: Year 4; 
New well is legally drilled: Year 5; 
Drilling not allowed: Year 6 through Year 9. 

Section 390 categorical exclusion and Onshore Oil and Gas Order No. 1 
erroneously interpreted: 
Date of last drilling activity on well pad or date underlying NEPA 
document was approved: start of Year 1; 
Drilling allowed: Year 1 through Year 5; 
APD for new well approved; permit expires in 2 years: end of Year 5; 
Drilling not allowed: Year 6 through Year 9; 
2-year permit extension granted: end of Year 7; 
New well is drilled 9 years after last drilling activity at same site; 
4 years after last legal drilling date: end of Year 9. 

Source: GAO. 

[End of figure] 

[End of section] 

Appendix IV: Comments from the Department of the Interior: 

United States Department of the Interior: 
Office Of The Secretary: 
Washington, DC 20240: 

September 18, 2009: 

Ms. Robin M. Nazzaro: 
Director, Natural Resources and Environment: 
Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548-0001: 

Dear Ms. Nazzaro: 

Thank you for the opportunity to review and comment on the Government 
Accountability Office draft report entitled, "Energy Policy Act of 2005 
Greater Clarity Needed to Address Concerns with Section 390 Categorical 
Exclusions for Oil and Gas Development," (GAO-09872). 

The Department of the Interior appreciates GAO's recognition of the 
Bureau of Land Management's role in contributing to a secure and 
domestic source of energy. We also appreciate your understanding of the 
difficulty presented in implementing a law without a precedent that 
would provide a context to guide the BLM in executing the requirements 
of section 390 of the Energy Policy Act of 2005. 

We concur with the GAO's recommendations. However, we found technical 
errors and incomplete statements within the report related to BLM's 
overall National Environmental Policy Act (NEPA) compliance process for 
oil and gas development. The Department of the Interior and the BLM 
will take immediate steps to ensure that the use of the section 390 
categorical exclusions is consistent with the law and BLM policy. The 
enclosure provides technical and specific comments related to the draft 
report. We hope these comments will assist you in preparing the final 
report. 

If you have any questions or concerns regarding this response, please 
contact Steve Salzman, Chief, Division of Fluid Minerals, at (202) 912-
7143 or LaVanna Stevenson-Harris, BLM Audit Liaison Officer, at (202) 
912-7077. 

Sincerely, 

Signed by: 

Wilma A. Lewis: 

Assistant Secretary:
Land and Minerals Management: 

Enclosure: 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Robin M. Nazzaro, (202) 512-3841 or nazzaror@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Jeffery D. Malcolm, Assistant 
Director; Mark A. Braza; Ellen W. Chu; Heather E. Dowey; Richard P. 
Johnson; Michael L. Krafve; and Tama R. Weinberg made key contributions 
to this report. Also contributing to the report were Armetha Liles and 
Kyle M. Stetler. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 91-190, 83 Stat. 852 (1970). 

[2] Pub. L. No. 109-58, 119 Stat. 594 (2005). 

[3] See, for example, Robertson v. Methow Valley Citizens Council, 490 
U.S. 332, 349 (1989). 

[4] See, for example, Department of Transportation v. Public Citizen, 
541 U.S. 752, 756 (2004). 

[5] Throughout this report, we refer to categorical exclusions 
developed under the NEPA regulations as administrative categorical 
exclusions. 

[6] Pub. L. No. 109-58, § 390, 119 Stat. 747 (2005), codified at 42 
U.S.C. § 15942. 

[7] BLM, Instruction Memorandum No. 2005-247: National Environmental 
Policy Act (NEPA) Compliance for Oil, Gas, and Geothermal Development, 
attachment 2 (Sept. 30, 2005); and BLM, National Environmental Policy 
Act Handbook H-1790-1 (Washington, D.C.: 2008). We refer in this report 
to the second document as BLM's NEPA handbook. 

[8] Nine Mile Canyon Coalition v. Stiewig, Civ. No. 08-586, D. Utah 
(filed Aug. 6, 2008). 

[9] Pub. L. No. 94-579, 90 Stat. 2743 (1976), codified as amended at 43 
U.S.C. § 1701 et seq. 

[10] Revisions to resource management plans are necessary if monitoring 
and evaluation findings, new data, new or revised policy, or changes in 
circumstances indicate that decisions for an entire plan or a major 
portion of a plan no longer serve as a useful guide for resource 
management. BLM, Land Use Planning Handbook H-1601-1, p. 46 (2005). 

[11] 43 C.F.R. § 3101.1-3. 

[12] 43 C.F.R § 3162.3-1(c). 

[13] Companies may also be required to submit a right-of-way 
application for related activities, such as adding pipelines, that take 
place on land for which they do not own a lease. See 43 C.F.R. § 
2881.7. 

[14] A determination of NEPA adequacy is a NEPA compliance document 
stating that the environmental impacts of the current project have been 
assessed under previously prepared NEPA documentation. 

[15] 40 C.F.R. § 1506.6. 

[16] 40 C.F.R. § 1508.4. 

[17] According to BLM officials, before 1989, administrative 
categorical exclusions existed that covered APDs, sundry notices, and 
oil and gas rights-of-way, although these are no longer in effect. 

[18] Pub. L. No. 109-58, § 390(a), 119 Stat. 747 (2005), codified at 42 
U.S.C. § 15942(a). Although the Energy Policy Act of 2005 authorizes 
both BLM and the Department of Agriculture's U.S. Forest Service to use 
section 390 categorical exclusions, this report examines only BLM's use 
of section 390 categorical exclusions. The exact meaning of the phrase 
"shall be subject to a rebuttable presumption that the use of a 
categorical exclusion under the National Environmental Policy Act of 
1969 (NEPA) would apply" is in dispute in a lawsuit pending in federal 
court. Nine Mile Canyon Coalition v. Stiewig, Civ. No. 08-586, D. Utah 
(filed August 6, 2008). We accordingly do not attempt to interpret this 
language in our report. 

[19] BLM's NEPA handbook includes several additional appendices, such 
as a list of administrative categorical exclusions, a list of 
extraordinary circumstances used to screen the use of administrative 
categorical exclusions, and templates for documenting NEPA compliance 
and the use of administrative categorical exclusions. 

[20] The presentation was first created in late 2007 and continuously 
updated until September 2008 by BLM officials to reflect evolving 
policies and questions about using section 390 categorical exclusions. 
BLM also developed another presentation in 2006, titled NEPA for Fluid 
Minerals, which also addressed how to use section 390 categorical 
exclusions. 

[21] BLM has issued two other pieces of supplemental guidance: (1) a 
brochure titled "Energy Policy Act of 2005 Section 390 Categorical 
Exclusions: Environmental Protections and Process Improvements," which 
summarizes the five section 390 categorical exclusions and BLM's 
related policy procedures and was issued in 2007 for BLM staff-- 
specifically NEPA coordinators--other federal agencies, and external 
stakeholders (such as environmental organizations), and (2) question- 
and-answer guides prepared by BLM headquarters to further synthesize 
information on what conditions need to be present to use a section 390 
categorical exclusion and how to document the rationale for using one 
of the exclusions. 

[22] The Forest Service is separately responsible for authorizing 
activities affecting the above-ground use of their lands. However, BLM 
independently evaluates the approval of the above-ground use, including 
section 390 categorical exclusions, and is ultimately responsible for 
approving the overall project proposal, including the below-ground 
activities. 

[23] Regulations issued by the Council on Environmental Quality require 
all federal agencies to make diligent efforts to involve the public in 
implementing the agencies' NEPA procedures. 40 C.F.R. § 1506.6(a). The 
regulations also direct agencies to provide public notice of NEPA- 
related hearings, public meetings, and the availability of 
environmental documents so as to inform those persons and agencies who 
may be interested or affected. 40 C.F.R. § 1506.6(b). While the 
regulations specifically require agencies to respond to public comments 
on environmental impact statements, 40 C.F.R. § 1503.4(a), they contain 
no similar requirement for responding to comments on environmental 
assessments. Nevertheless, some BLM officials indicated that they do 
respond to such comments. 

[24] According to some BLM officials, however, conducting cumulative 
impacts analyses for environmental assessments is redundant, given that 
the agency carries out cumulative impacts analyses at the programmatic 
level, such as an environmental impact statement associated with a 
resource management plan or an oil and gas field development plan. As 
such, some BLM officials believe that the use of section 390 
categorical exclusions do not result in the loss of important 
environmental impact information. 

[25] Pub. L. No. 109-58, §365, 119 Stat. 723 (2005). 

[26] The Farmington, New Mexico, field office used mostly section 390 
CX3s in fiscal years 2006 through 2008. 

[27] These templates are found in BLM's NEPA handbook, appendixes 9, 8, 
and 6, respectively. 

[28] See 40 C.F.R. § 1508.4. 

[29] During our review, we found two instances in which, according to 
BLM documents, the White River, Colorado, field office approved an APD 
using a section 390 categorical exclusion in which the analysis 
required under section 106 of the National Historic Preservation Act 
appears to be erroneous or improperly conducted. 

[30] Nine Mile Canyon Coalition v. Stiewig, Civ. No. 08-586, D. Utah 
(filed Aug. 6, 2008). 

[31] During Senate floor debates on the conference version of the bill, 
which ultimately became law, one of the bill's supporters stated that 
the bill "does not include categorical waivers for NEPA for oil and gas 
developments." 151 Cong. Rec. S9340 (daily ed. July 29, 2005) 
(statement of Senator Akaka). 

[32] This prohibition is a statewide policy of BLM's New Mexico state 
office. Areas of critical environmental concern are areas within the 
public lands where special management attention is required to protect 
and prevent irreparable damage to important historic, cultural, or 
scenic values; fish and wildlife resources; or other natural systems or 
processes or to protect life and safety from natural hazards. 43 C.F.R. 
§ 1601.0-5(a). 

[33] Pub. L. No. 109-58, § 390(a), 119 Stat. 747 (2005), codified at 42 
U.S.C. § 15942(a). 

[34] Proposed activities must also be conducted pursuant to the Mineral 
Leasing Act and meet the conditions for one or more of the five types 
of section 390 categorical exclusions. 

[35] 43 C.F.R. § 3162.3-1(g). 

[36] Because of concerns over inappropriate release of confidential 
information and overburdening of field office staff, Utah and Wyoming 
state offices both require that the public submit requests under the 
Freedom of Information Act to obtain information related to an APD 
besides what is available in the public book during an initial 30-day 
posting. 

[37] 43 C.F.R. § 3165.3(b). 

[38] The deferred site-specific NEPA analysis and documentation are 
typically associated with environmental assessments, according to BLM. 

[39] These presentations further show that this one-to-one ratio of 
section 390 categorical exclusion decisions to APDs applies to all five 
types of section 390 categorical exclusions. Each section 390 
categorical exclusion applies to a single APD. Moreover, each well 
requires its own APD. BLM regulations state that "the operator shall 
submit to the authorized officer for approval an Application for Permit 
to Drill for each well." 43 C.F.R. § 3162.3-1(c) [emphasis added]. 

[40] The guidance also requires any associated surface disturbance or 
expansion of the well pad be connected to the original well pad or 
location and excludes new well sites that are simply in the vicinity. 

[41] For example, H.R. 2828, § 1714(h), introduced on June 11, 2009, 
would strike the rebuttable presumption language, so that the law would 
state that the relevant activities "shall be subject to a categorical 
exclusion" under NEPA. A bill introduced in the previous Congress, H.R. 
2337, § 106(c), would have required BLM and the U.S. Forest Service to 
adhere to Council on Environmental Quality regulations, specifically 
those involving extraordinary circumstances, in administering section 
390. 

[42] We did not include these U.S. Forest Service section 390 
categorical exclusions in our sample of reviewed decision documents 
because BLM initially indicated to us that Forest Service section 390 
categorical exclusions should not be counted as a BLM action. After we 
drew our sample and conducted our file reviews, BLM reversed itself and 
decided that the Forest Service section 390 categorical exclusions 
should be counted as a BLM action. 

[43] During the course of our review, we also received two allegations 
of inappropriate activities related to oil and gas development which we 
referred to Interior's Office of Inspector General for further 
investigation. The first involved the Farmington, New Mexico field 
office's oil and gas activities in general and the second involved the 
White River, Colorado field office's compliance with section 106 of the 
National Historic Preservation Act in general. 

[44] BLM, National Environmental Policy Act Handbook H-1790-1 
(Washington, D.C.: 2008). 

[End of section] 

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