Lack of Transparency in Oil and Gas Oversight Still a Major Problem

6/29/2010

The Department of the Interior's management of oil and natural gas resources suffers from a lack of public access to information, according to government investigators and numerous public interest groups. This lack of openness takes a significant toll on the public's ability to challenge Interior's decisions and impedes accountability. Reforms to the Interior Department's oil and gas management policies announced in recent months have not made transparency a key element, casting doubt on their potential to bring about stronger oversight.

In recent testimony before a House subcommittee, an official from the Government Accountability Office (GAO) criticized the Department of the Interior's (DOI) oversight of oil and gas production for weaknesses in the disclosure of information. GAO investigators "found that stakeholders, including industry groups and nongovernmental organizations representing environmental, recreational, and hunting interests, expressed frustration with the transparency and timeliness" of certain types of information on oil and gas management. In addition to the transparency problems, GAO identified weaknesses in four other key areas: technical expertise; ability to conduct inspections; enforcement authority; and independence.

Over the course of several investigations into the management and oversight of oil and natural gas resources, combined with its work to strengthen oversight of nuclear safety, the GAO has identified several key elements it considers valuable to sound independent oversight. One such element, public access, states that the agency "should provide public access to its reports so that those most affected by operations can get information."

DOI's oil and gas oversight is conducted primarily by the Bureau of Land Management (BLM) and the former Minerals Management Service (MMS). On June 18, the MMS was renamed the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) as part of a set of reforms announced in the aftermath of the BP Deepwater Horizon catastrophe. The Interior secretary's decision to change the name of the troubled MMS may evoke the name changes of other disgraced organizations such as AIG and Blackwater, but it does little to improve transparency.

BOEMRE (Née MMS)

Reforms of offshore oil and gas oversight announced by Interior Department Secretary Ken Salazar in May fail to highlight the role of the public or the need to increase transparency at MMS. In a report recommending new safety measures for offshore drilling, the Interior secretary does, however, scatter a few mentions of transparency. For example, the document committed the agency to develop "new means of improving transparency and providing public access to the results of inspections and routine reporting" regarding oil rig safety equipment, including the misleadingly named blowout preventers. Additionally, MMS recently conducted inspections of all deepwater drilling rigs in federal waters of the Gulf of Mexico. The inspection results were made available to the public.

Still, public interest watchdogs have called for much greater transparency at MMS/BOEMRE, including narrower application of trade secrets protections and greater disclosure of key data, such as detailed production figures, royalty and tax payments, and environmental and safety inspection reports. According to one industry watchdog, "The way to clean up the mess in Interior and in our waters is to shine enough light to make dealings between industry and government transparent to all of us." Yet, DOI's reforms of the former MMS do not prioritize improving the transparency of the agency or greater public access to information. This neglect could threaten the efficacy of the reforms. Danielle Brian of the Project on Government Oversight (POGO) recently testified before the House Subcommittee on Energy and Mineral Resources, stating, "No matter what reforms are put in place, they can only be effective with increased transparency about MMS's operations.

BLM: The Other Troubled Bureau

The BLM oversees federal onshore oil and natural gas projects and is supposed to ensure projects adhere to all applicable environmental laws and regulations, including the National Environmental Policy Act (NEPA). NEPA requires certain projects to undergo environmental reviews that also consider alternative actions. Such reviews are waived if the project qualifies for what is known as a categorical exclusion. The GAO has found that "Interior has been providing inconsistent and limited information with respect to its use of categorical exclusions in approving onshore oil and gas activities."

Under the Energy Policy Act of 2005, section 390 authorized DOI to grant categorical exclusion status and skip environmental reviews for certain oil and gas drilling projects. Many projects excluded from the environmental review process under section 390 are frequently not publicly disclosed. The GAO found that "BLM field offices had different degrees and methods of disclosing information related to decisions on section 390 categorical exclusions." The ease of access to information depends on which regional office the public seeks information from.

In September 2009, the GAO found that "BLM's use of section 390 categorical exclusions has frequently been out of compliance with both the law and BLM's guidance." The agency's abysmal implementation of the Energy Policy Act and of NEPA "may have thwarted NEPA's twin aims of ensuring that BLM and the public are fully informed of the environmental consequences of BLM's actions."

In addition to BLM, MMS also was criticized for poor implementation of NEPA. In a report released in March, the GAO found that MMS's failure to share information "has hindered [regional staff's] ability to complete sound environmental analyses under NEPA," and that the agency has failed to provide a required guidance handbook for implementing NEPA. NEPA's environmental reviews allow the public to review and comment on proposed oil and gas activities. Without sound, transparent reviews, the public is effectively shut out of a key part of government decision making.

Little Transparency in Lease Sales

According to GAO's recent testimony before the House subcommittee, the preliminary results of an ongoing GAO investigation show that "BLM state offices provide limited and varying amounts of information to the public on their leasing decisions." Despite the criticisms by the GAO regarding DOI's transparency and involvement of the public, the BLM has not made improving the transparency of the oil and gas leasing process a priority. Proposed reforms of BLM's lease sales make few references to transparency. There is only sporadic mention of public access, such as one assertion that "field offices will ensure greater public involvement." Such sparse and vague mentions of "greater public involvement" provide little substantive direction to staff and little hope for progress.

Websites Missing Key Documents

According to the GAO, another recent reform requires state BLM offices to post online their responses to protests against decisions to offer specific parcels for oil and gas drilling. At least one state office, Wyoming, posted the protest letters for leases sold in February and May 2010, but no response letters were posted. The websites for the Colorado office and the New Mexico office had neither protest letters nor agency responses posted online for sales going back to 2005. The Montana office does provide a webpage with the protest letters and responses for leases sold in 2009 and 2010 only.

Notably, the BLM's website provides substantial information on how to lease federal land for oil and gas drilling. A review of the website failed to identify any instructions for protesting leasing decisions.

DOI's Open Government Plan

Unfortunately for open government advocates, DOI's Open Government Plan, released in April, does little to address the problems of transparency and public engagement in oil and gas management.

As part of an evaluation of all agency Open Government Plans by a coalition of public interest groups, a reviewer noted that DOI's plan "suffers from a lack of specific details for implementation of those [transparency] projects and dearth of 'game-changing' ideas that would put the President's open government ideals into meaningful action."

In her House testimony, POGO’s Brian criticized DOI's implementation of the Obama administration's transparency initiatives. "It is important to note that Interior has not released information about oil and gas leases, despite being given several opportunities to do so by measures outlined in the Open Government Directive. Interior's willingness to increase its openness in the wake of the Gulf disaster should be considered a real acid test as to how committed the Administration is to the kind of transparency measures that will help citizens hold the federal government and industry accountable."