Impact of Regulations--After Federal Leasing--On Outer Continental Shelf Oil and Gas Development

EMD-81-48: Published: Feb 27, 1981. Publicly Released: Feb 27, 1981.

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After industry acquires outer continental shelf (OCS) lands, several federal and state permits or approvals are needed before any drilling activity may begin. With the Outer Continental Oil Shelf Lands Act Amendments of 1978, Congress sought to interject a balance between development of oil and gas resources and preservation of other coastal water resources. GAO evaluated the effects of requirements stemming from the amendments and other legislation on industry efforts to explore and develop oil and gas resources after leases are awarded.

The real impact of the amendments is still largely unknown because new rules and regulations have not been fully tested in any of the OCS areas. Before any activity can take place on leases on the OCS, the Geological Survey must approve industry's plans for exploration and development. Regulations instituted by the Survey significantly increased the time required for approval in the Gulf of Mexico region. Revised regulations implemented to meet the mandated timeframes specified in the amendments have improved the Survey's responsiveness, but processing times will probably never return to pre-1978 lengths. Four federal agencies primarily are involved in issuing permits before exploration or development activities can proceed. A delay by one can hold up the entire process. The most serious delays have been caused by agencies where timeframes to issue permits are not legislatively mandated. The Environmental Protection Agency (EPA) drilling discharge permits are the most time consuming and have had perhaps the greatest effect on OCS operations. Agencies generally have not actively monitored, enforced, or evaluated the effectiveness of regulatory requirements. The increased role of state and local governments does not have to delay operations, but that potential exists. Despite the regulatory process, GAO found a credible record by industry in pursuing offshore oil and gas.

Matter for Congressional Consideration

  1. Status:

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should enact legislation to establish a standard, reasonable time within which all federal agencies, particularly the Department of the Interior, Environmental Protection Agency and the Corps of Engineers, are required to complete approvals and issue permits. A maximum 90-day turnaround time should be the general rule, including the time for state consistency reviews.

Recommendations for Executive Action

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    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Commerce, working through the Coastal Zone Management Program and the Steering Committee, should encourage and assist other coastal States in developing legislation and administrative procedures similar to California for making local permitting and review processes more uniform, timely and coordinated. The Secretary of the Interior should complement that undertaking by requiring the Department to encourage states in developing cooperative programs and to seek greater participation in joint review processes.

    Agency Affected: Department of Commerce

  2. Status:

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of the Interior should also establish within the Department a permit assistance office, patterned after the California example, and charge it with such tasks as helping applicants understand the permitting process; working with other permitting agencies; helping to mediate disputes; coordinating joint evaluation programs; consolidating public hearings; monitoring decision time limits; and feeding back information to the newly created Steering Committee.

    Agency Affected: Department of the Interior


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