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National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling

THE NATIONAL ENVIRONMENTAL POLICY ACT AND OUTER CONTINENTAL SHELF OIL AND 

GAS ACTIVITIES

Staff Working Paper No. 12

Staff working papers are written by the staff of the National Commission on the BP Deepwater 

Horizon Oil Spill and Offshore Drilling for the use of members of the Commission. They do not 

necessarily reflect the views of the Commission or any of its members. In addition, they may be 

based in part on confidential interviews with government and non-government personnel.

This staff working paper focuses on the National Environmental Policy Act of 1969

(NEPA) and its application to offshore oil and gas activities. The paper is divided into three 

sections. The first section is a general discussion of NEPA as it applies to Federal agencies. The 

second section addresses the Department of the Interior’s (DOI) NEPA regulations and portions 

of its Departmental Manual that relate to the implementation of those rules for oil and gas 

activities. The third section focuses on NEPA questions specific to the Deepwater Horizon oil 

spill. 

I. Operation of NEPA

A. Procedural Nature of NEPA 

NEPA establishes a process by which federal agencies are obligated to review the

environmental effects of their proposed agency actions during the decision-making process. 

While NEPA’s underlying purpose is to reduce environmental degradation, the nature of the 

obligation that the statute imposes on agencies to review the impacts of their decisions is 

essentially procedural. The statute is designed to require federal agencies to prepare formal

“statements” in which proposed agency actions are analyzed in a way that promotes informed 

decision-making rather than a substantive result. Thus, NEPA’s goal is not to prevent federal 

approval of actions that might have environmental consequences, but instead to ensure that 

agency actions are undertaken knowingly and made in consideration of potential environmental 

consequences. 

The Supreme Court articulated this statutory purpose in the early decades of NEPA’s 

implementation, in the context of its review of NEPA-compelled agency statements. The Court 

made clear that NEPA is designed to “insure a fully informed and well-considered decision.”1

 

The statute requires agencies to take a “hard look” at environmental effects of a major federal 

action,

2 but it does not require agencies “to elevate environmental concerns over other 

appropriate considerations.”3 NEPA does not bar environmentally-destructive actions,

4

 1 Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 558 (1978).

but seeks 

2 Kleppe v. Sierra Club, 427 U.S. 390, 410 n.21 (1976).

3

Baltimore Gas & Electric Co. v. Natural Resources Defense Council, Inc., 462 U.S. 87, 97 (1983). 

4

Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350-51 (1989).
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to promote environmental protection by ensuring rigorous and timely consideration of 

environmental consequences: 

NEPA does not work by mandating that agencies achieve particular substantive 

environmental results. Rather, NEPA promotes its sweeping commitment to 

“prevent or eliminate damage to the environment and biosphere” by focusing 

Government and public attention on the environmental effects of proposed agency 

action.5

 By so focusing agency attention, NEPA ensures that the agency will not 

act on incomplete information, only to regret its decision after it is too late to 

correct.6

The Court also clarified that NEPA is about process and informed decision-making:

NEPA does not mandate particular results, but simply prescribes the necessary 

process. . . . If the adverse environmental effects of the proposed action are 

adequately identified and evaluated, the agency is not constrained by NEPA from 

deciding that other values may outweigh environmental costs. . . . Other statutes 

may impose substantive environmental obligations on Federal agencies, but 

NEPA merely prohibits uninformed—rather than unwise—agency action.7

B. NEPA’s Action-Forcing Requirement—a Detailed Statement 

Section 102(2) is the operative provision with respect to NEPA documents.8 Subsection 

(A) directs agencies to “utilize a systematic, interdisciplinary approach which will insure the 

integrated use of the natural and social sciences and the environmental design arts in planning 

and in decisionmaking which may have an impact on man’s environment.” The directive for 

preparation of NEPA documents in association with agency action appears in subsection (C), 

which requires a “detailed statement by the responsible official.” Specifically, subsection (C) 

requires an agency to consider potential environmental impacts of a proposed action if that action 

is a “major Federal action[] significantly affecting the quality of the human environment.”9 The 

agency must adequately discuss not only the environmental impact of the proposed action, but 

also its unavoidable adverse impacts, alternatives to it, the relationship between short-term uses 

of the environment and long-term productivity, and any irreversible commitments of resources 

resulting from the proposed action.10 In addition, subsection (E) requires the agency to “study, 

develop, and describe appropriate alternatives to recommended courses of action in any proposal 

which involve[] unresolved conflicts concerning alternative uses of available resources.”11

Non-federal action is not subject to NEPA, but can fall under the statute’s purview if an 

agency approves some aspect of the action. Actions that do not have the potential for significant

environmental effects are, however, not subject to NEPA’s requirement that a federal agency 

 5 42 U.S.C. § 4321.

6

See Robertson, 490 U.S. at 349. 7

Id. at 350-51 (citations, footnote omitted); Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 371 (1989). 88 42 U.S.C. § 4332(2). 9 42 U.S.C. § 4332(2)(C).

10 42 U.S.C. § 4332(2)(C)(i)-(v). 11 42 U.S.C. § 4332(2)(E).
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prepare a detailed statement that considers the environmental impacts of the agency’s proposed 

action.

12 

C. CEQ Regulations

Title II of NEPA established the Council on Environmental Quality (CEQ) within the 

Executive Office of the President. By Executive Order 11991(May 24, 1977), President Jimmy 

Carter directed CEQ to “[i]ssue regulations to Federal agencies for the implementation of the 

procedural provisions” of NEPA. The resulting regulations, first promulgated on November 28, 

1978, and later amended, set forth the manner by which agencies implement NEPA section 

102(2).13 The regulations, which are binding “except where compliance would be inconsistent 

with other statutory requirements,”14 require agencies to establish their own procedures to 

implement NEPA in consultation with CEQ.15 

D. NEPA Documents 

Under NEPA section 102(2)(C), any agency action that has a potential to significantly 

affect the quality of the human environment must be accompanied by NEPA review. CEQ 

regulations employ two documents that outline environmental impacts: an environmental impact 

statement (EIS) and an environmental assessment (EA).16 The EIS is the “detailed statement” 

identified in NEPA to address a major Federal action that has significant impacts on the human 

environment.17 By contrast, an EA is a “concise public document” that serves to (1) briefly 

provide sufficient evidence and analysis for determining whether to prepare an EIS; (2) aid an 

agency’s compliance with NEPA when no EIS is necessary; and (3) facilitate preparation of an 

EIS when one is necessary.18

The point of an EA is to document whether an EIS is required for a proposed action. If 

an agency knows that an action will generate significant environmental effects, an EIS is 

required and there is no basis for preparing an EA. But if the agency is unsure, or if the proposed 

action is of the sort that does not always require an EIS,19 the agency may prepare an EA. If, as 

a result of an EA, the agency determines that no significant impact will likely result from the 

proposed action, the agency issues a “finding of no significant impact” (FONSI).20 A FONSI 

may include the discussion underlying its conclusion, or may attach an EA.21 If an agency issues 

a FONSI, NEPA compliance is complete because, as a statutory matter, the proposed action will

not significantly affect the human environment, and thus a detailed EIS is unnecessary.22

 12 See, e.g., Sabine River Authority v. U.S. Department of the Interior, 951 F.2d 669, 675 (5th Cir. 1992), citing

Metropolitan Edison Co. v. People Against Nuclear Energy, 460 U.S. 766 (1983) (NEPA is triggered by “physical

change in the environment”).

 By 

13 40 C.F.R. § 1500 et seq. 14 40 C.F.R. § 1500.3. 15 40 C.F.R. § 1500.2(b); 1507.3(a). 16 40 C.F.R. § 1501.3; 1501.4. 17 40 C.F.R. § 1508.11. 18 40 C.F.R. § 1508.9. 

19 See 40 C.F.R. § 1507.3(b). 20 40 C.F.R. § 1508.13. 21 Id. 22 Id.
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contrast, if the analysis in an EA projects a significant impact, an agency cannot issue a FONSI. 

If an agency wishes to move forward with a proposed action, it must choose an alternative that

mitigates impacts such that a FONSI is warranted,23 or it must prepare a full EIS.24 

The EIS, EA, and FONSI, are three of four “environmental documents” which effectuate 

NEPA’s mandatory review.25 The fourth is a Notice of Intent, which is a public notice that an 

EIS will be prepared.26 No other NEPA documents exist in the CEQ rules to accomplish the 

NEPA review required in section 102(2).

E. When and How to Prepare an EIS or an EA 

An agency can always choose to prepare an EIS, and must do so if the action is one 

“normally requiring” an EIS.

27 The scope and format of the EIS is controlled by regulations that 

require a summary, a section describing the purpose and need for the proposed action, 

alternatives to it, the affected environment, environmental consequences from the action, and a 

list of preparers.28 The EIS generally must be circulated to other agencies and is subject to 

consultation with relevant members of the public and governmental entities.29 An EA is less 

detailed, more concise, and prepared for actions that might have no significant impacts, or ones 

that can be reduced to a level of “not significant” with mitigation. Considerably less of an 

investment than an EIS, EAs include “brief discussions of the need for the proposal, of 

alternatives as required by section 102(2)(E), of the environmental impacts of the proposed 

action and alternatives, and a listing of agencies and persons consulted.” 30

The distinctions between an EA and an EIS give rise to common misconceptions about 

them. One misconception is that when an agency prepares a full EIS, its work is devoted to 

preventing all significant impacts. However, by its nature, although an EIS considers significant 

impacts, it is not a prescription for avoiding them.31 An agency prepares an EIS because 

significant impacts are anticipated.32 Therefore, the fact that an EIS identifies adverse impacts is 

not tantamount to a failure of NEPA compliance. Indeed, in Robertson v. Methow Valley 

Citizens Council, the Supreme Court rejected the idea that an EIS can only be sustained if it 

provides for detailed mitigation of all potential impacts:

There is a fundamental distinction, however, between a requirement that 

mitigation be discussed in sufficient detail to ensure that environmental 

consequences have been fairly evaluated, on the one hand, and a substantive 

requirement that a complete mitigation plan be actually formulated and adopted, 

on the other. . . . [I]t would be inconsistent with NEPA’s reliance on procedural 

 23 See 40 C.F.R. § 1508.20. 24 40 C.F.R. § 1508.9(a)(3). 25 40 C.F.R. § 1508.10. 26 40 C.F.R. § 1508.22. 27 40 C.F.R. § 1501.4(a)(2). 28 40 C.F.R. § 1502. 

29 Id. C.F.R. § 1502.19 and 1502.25. 30 40 C.F.R. § 1508.9(b). 31 42 U.S.C. § 4332(2)(C) (EIS required when significant impacts are found). 32 40 C.F.R. § 1502.16 (EIS includes discussion of “adverse environmental effects which cannot be avoided”). 
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mechanisms—as opposed to substantive, result-based standards—to demand the 

presence of a fully developed plan that will mitigate environmental harm before 

an agency can act.33

Another misconception is that if an EA is prepared, a FONSI necessarily must result

because the EA/FONSI together identify any significant impacts from the proposed action. 

However, an EA can never constitute final NEPA compliance if it is the vehicle for identifying 

significant impacts that cannot be mitigated. While it is enough that significant impacts have 

been fully vetted in an EIS, they must be reduced to a level of “not significant” in an EA for a 

FONSI to result. An EA is sufficient to conclude NEPA compliance and to lead to a FONSI only 

if it justifies a conclusion that no significant impacts will occur as incremental effects of the 

proposed action. If this is not the result then further NEPA documentation is required.

The sufficiency of NEPA documentation is determined ultimately by the federal courts in 

challenges to agency action under the Administrative Procedure Act.

34 A party challenging a 

NEPA document must demonstrate with objective proof that the agency failed to adequately 

consider a substantial environmental question of material significance to the proposed action, or 

otherwise failed to abide by section 102(2) of NEPA. Proof of arbitrary or inconsistent 

conclusions, or a failure to consider relevant information, demonstrates a lack of compliance 

with NEPA because it proves an “arbitrary and capricious” action under the Administrative 

Procedure Act.

35 

An EIS is judged by whether it constitutes a “detailed statement” that takes a “hard look” 

at all of the potential significant environmental consequences of the proposed action and 

reasonable alternatives thereto, considering all relevant matters of environmental concern.36 The 

question is whether the EIS contains a “reasonably thorough discussion of the significant aspects 

of the probable environmental consequences” of the proposed action and alternatives.37 

Significant impacts do not defeat an EIS under the Administrative Procedure Act.

By contrast, if an EA projects significant effects, a FONSI cannot be sustained and a 

challenge under the Administrative Procedure Act38

will prevail. An EA for which a FONSI has 

been issued will be affirmed when the record demonstrates that the agency has considered 

relevant matters of environmental concern, taken a “hard look” at potential environmental 

impacts, and made a convincing case that no significant impact will result or that any impact will 

be reduced to insignificance by the adoption of appropriate mitigation measures.39

 33 490 U.S. at 352-53 (footnote and citation omitted). 34 5 U.S.C. §§ 704-06. 35 Marsh, 490 U.S. 360; see also 40 C.F.R. § 1502.24 (agencies must “insure the professional integrity, including 

scientific integrity” of analyses in EISs). 36 42 U.S.C. § 4332(2)(C), (E); 40 C.F.R. § 1502.1; Kleppe, 427 U.S. at 410 n.21; Natural Resources Defense 

Council, Inc. v. Hodel, 819 F.2d 927, 929 (9th Cir. 1987).

37 State of California v. Block, 690 F.2d 753, 761 (9th Cir. 1982), quoting Trout Unlimited v. Morton, 509 F.2d 

1276, 1283 (9th Cir. 1974); Scientists’ Institute for Public Information v. Atomic Energy Commission, 481 F.2d 

1079, 1092 (D.C. Cir. 1973).

38 5 U.S.C. § 706.

39 Cabinet Mountains Wilderness v. Peterson, 685 F.2d 678, 681-82 (D.C. Cir. 1982); Maryland-National Capitol 

Park & Planning Commission v. U.S. Postal Service, 487 F.2d 1029, 1040 (D.C. Cir. 1973).
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F. Categorical Exclusions—Agency Actions Exempt from the Action-Forcing 

Requirements of NEPA 

Preparation of an EA or EIS that analyzes the effects of a proposed action and its 

reasonable alternatives is a procedural line an agency must cross before it can move forward with 

an action. CEQ has only included the EIS, EA, resulting FONSI (EA), and Notice of Intent (of 

an EIS) on its list of NEPA documents.40 CEQ understood, however, that NEPA does not, and 

should not, compel unnecessary paperwork.

41 Therefore, CEQ identified “categorical 

exclusions” (CE)—sets of agency actions that do not generate environmental effects and thus are 

exempt from the case by case application of section 102(2). CEQ allows each agency to 

establish exceptions from the NEPA process for entire categories of actions, “which do not 

individually or cumulatively have a significant effect on the human environment and which are 

therefore exempt.”42 CEQ defines a CE as that “category of actions which do not . . . 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 the regulations43and for which, 

therefore, neither an [EA] nor an [EIS] is required. . . . Any procedures under this section shall 

provide for extraordinary circumstances in which a normally excluded action may have a 

significant environmental effect.”44 A CE is thus not a level of NEPA review, but rather a 

defined category of agency action that does not require NEPA review apart from the 

development of the CE itself.. 

CEs represent the common sense notion that agencies routinely “act” in ways that do not 

create environmental effects requiring a “hard look.” For example, employee performance 

evaluations or organizational changes do not generate impacts on the physical world and thus are 

not subject to NEPA. In Sabine River Authority v. Department of the Interior,

45 the Fifth Circuit 

held that “the acquisition of a negative easement which by its terms prohibits any change in the 

status quo does not amount to ‘major Federal action[] significantly affecting the quality of the 

human environment.’” Although, in this case, the court did not specifically define an agencyasserted CE, it did define a subset of actions exempt from NEPA as actions that do not change 

the physical world. The fact that an agency must examine a proposed action to determine 

whether it may properly be within a defined CE is an activity occasioned by NEPA, but the 

examination itself is not NEPA review in a NEPA document as defined by CEQ.

Agencies must establish a list of their own CEs, which are defined to be “categories of 

actions which do not individually or cumulatively have a significant impact on the human 

environment and are therefore exempt” from NEPA.46

 40 40 C.F.R. § 1508.10.

 Environmental documentation in the 

form of an EIS or EA is required unless an agency has established a procedure that includes 

41 40 C.F.R. § 1500.4 (“Reducing paperwork”). 42 40 C.F.R. § 1500.4(p) (citing40 C.F.R. § 1508.4). 43 40 C.F.R. §1507.3. 44 40 C.F.R. § 1508.4. 45 951 F.2d at 679. 46 40 C.F.R. § 1500.4(p). 
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identification of “typical classes of action . . . [w]hich normally do not require either an [EIS] or 

an [EA].”47

G. Effects/Impacts 

In addressing the environmental consequences of a proposed action in an EIS, an agency 

must discuss both its direct and indirect effects as well as alternatives to the proposed action in 

order to offer meaningful comparisons to other actions that may also be implemented.

48 Among 

the effects to be addressed are cumulative impacts49 and ways to mitigate effects.50 Similarly, 

EAs must include brief statements of “environmental impacts” of a proposed action.51 

“Effects and impacts as used in these regulations are synonymous” and include “direct,” 

“indirect,” and “cumulative” effects.52 Direct effects are “caused by the action and occur at the 

same time and place.”53 Indirect effects are “caused by the action and are later in time or further 

removed in distance, but are still reasonably foreseeable. Indirect effects may include growth 

inducing effects and other effects related to induced changes in the pattern of land use, 

population density or growth rate, and related effects on air and water and other natural systems, 

including ecosystems.”54 A “reasonably close causal relationship” between the Federal action 

and the effects at issue is critical; where the chain of causation is unduly remote, an effect will 

not be deemed to be an indirect effect of a proposed action.55 A cumulative impact is the impact 

on the environment that results from the incremental impact of the action when added to other 

past, present, and reasonably foreseeable future actions, regardless of what agency or person 

undertakes such other actions.56 Cumulative impacts can result from individually minor but 

collectively significant actions taking place over time.57

When certain impacts are to be analyzed depends on whether they may be reasonably 

foreseeable.

H. Worst Case Analysis 

There is general confusion about whether agencies are required to consider a “worst case 

scenario” in their NEPA documents. At one time, regulations did require EISs to include worst 

case scenario analyses in certain circumstances. But CEQ eliminated this requirement in 1986

by revising its NEPA regulations. Worst case scenarios are not currently required in the NEPA 

regulations. 

 47 40 C.F.R. § 1507.3(b)(2)(ii). 48 40 C.F.R. § 1502.16; 1502.14. 

49 40 C.F.R. § 1508.7. 50 40 C.F.R. § 1502.16(h). 51 40 C.F.R. § 1508.9(b). 52 40 C.F.R. § 1508.8; 1508.25(c). 53 40 C.F.R. § 1508.8(a). 54 40 C.F.R. § 1508.8(b). 55 Metropolitan Edison, 460 U.S. at 774-75. 56 40 C.F.R. § 1508.7. 57 Id. 
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The worst case analysis requirement first arose in the 1978 CEQ regulations. CEQ was 

attempting to resolve how an agency should handle situations in which the impacts of an action 

were uncertain or unknown. It instructed federal agencies to obtain additional data when 

addressing “scientific uncertainty” or “gaps in relevant information” regarding significant 

adverse environmental effects that were “essential to a reasoned choice among alternatives” or 

“important to the decision.” 58 The problem was that some such data was usually not available at 

all, or if available, unreasonably costly to obtain. Accordingly, if additional and necessary 

scientific information could not be acquired because the “overall costs of obtaining it were 

exorbitant,” or “the means for obtaining it were beyond the state of the art,” the agency was 

required to “include a worst case analysis and an indication of the probability or improbability of 

its occurrence.”59 

CEQ amended the regulation in 1986. The change was controversial and generated

considerable public comment. CEQ responded by explaining that it believed the 1978 regulation 

was “flawed” and that it needed to provide “better and more logical” requirements for agencies 

to deal with situations involving incomplete information.60 CEQ disagreed with the view 

expressed by certain commenters that removing the worst case scenario requirement would 

weaken NEPA compliance, instead stating that a “less sensational” and “more careful and 

professional approach” was a “better” way of dealing with incomplete and unavailable 

information in an EIS.61 

In Robertson v. Methow Valley Citizens Council, the Supreme Court reversed a circuit 

court that had insisted the 1978 regulation’s demand for a worst case analysis be followed even 

after amendment of that regulation. The Supreme Court gave “substantial deference” to the 1986

regulatory amendment, citing the fact that the 1978 regulation had been subject to considerable 

criticism. Citing the 1985 proposed rule that became the 1986 amendments, the Court stated:

CEQ explained that by requiring that an EIS focus on reasonably foreseeable 

impacts, the new regulation “will generate information and discussion on those 

consequences of greatest concern to the public and of greatest relevance to the 

agency’s decision,” 50 Fed. Reg. 32237 (1985), rather than distorting the 

decision-making process by overemphasizing highly speculative harms, 51 Fed. 

Reg. 15624-15625 (1986); 50 Fed. Reg. 32236 (1985). In light of this wellconsidered basis for the change, the new regulation is entitled to substantial 

deference. Accordingly, the Court of Appeals erred in concluding that the 

[relevant EIS] is inadequate because it failed to include a “worst case analysis.”62

The regulation in place today states that if “information relevant to reasonably 

foreseeable significant adverse impacts cannot be obtained” because it is too costly to get or 

unavailable, the agency must include a four-part statement regarding the information, including

“the agency’s evaluation of such impacts based on theoretical approaches or research methods 

 58 40 C.F.R. § 1502.22.

59 Id. 60 51 Fed. Reg. 15624. 61 Id. 62 490 U.S. at 356.
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generally accepted in the scientific community.”63 “Reasonably foreseeable” environmental 

effects include “impacts which have catastrophic consequences, even if their probability of 

occurrence is low, provided that the analysis of the impacts is supported by credible scientific 

evidence, is not based on pure conjecture, and is within the rule of reason.”64

I. Consultation 

CEQ regulations establish extensive requirements for including other agencies and the 

public in the EIS process. CEQ’s stated policy is to encourage and facilitate “public involvement 

in decisions which affect the quality of the human environment.”65 The rules “emphasize agency 

cooperation early in the NEPA process.”66 In addition, they require “diligent efforts to involve 

the public in preparing and implementing their NEPA procedures.”67

The requirements for public and agency review of a pending EIS are demanding. The 

lead agency responsible for the proposed action may request “any other Federal agency which 

has jurisdiction by law,” or any such agency “which has special expertise with respect to any 

environmental issue” to be addressed in the EIS, to be a “cooperating agency.”68 The 

cooperating agency’s involvement and participation should be solicited at the earliest possible 

time.69 The regulations call for “scoping,” which is the “early and open process for determining 

the scope of issues to be addressed and for identifying the significant issues related to a proposed 

action.”70 As soon as it decides to prepare an EIS, the agency must publish a “notice of intent” 

in the Federal Register, subject to limited exceptions.71 The notice of intent invites 

“participation of affected Federal, State, and local agencies, any affected Indian tribe, the 

proponent of the action, and other interested persons.”72

After the scoping process, the EIS is issued in two stages. A draft environmental impact 

statement (DEIS) will issue “in accordance with the scope decided upon in the scoping 

process.”73 The DEIS should discuss “all major points of view on the environmental impacts of 

the alternatives including the proposed action.”74 At this juncture, the agency must invite 

comments.75 With respect to “any Federal agency that has jurisdiction by law or special 

expertise with respect to any environmental impact involved, or which is authorized to develop 

and enforce environmental standards,” the lead agency shall obtain comments.”76

 63 40 C.F.R. § 1502.22(b)(1).

 It “shall 

request” comments of appropriate state and local agencies authorized to develop and enforce 

environmental standards; Indian tribes with a reservation that may suffer impacts; any agency 

64 Id. 65 40 C.F.R. § 1500.2(d). 66 40 C.F.R. § 1501.6. 67 40 C.F.R. § 1506.6(a). 68 40 C.F.R. § 1501.6. 69 40 C.F.R. § 1501.6(b). 70 40 C.F.R. § 1501.7. 71 Id. (see 1507.3(e) (notice may be issued closer to the time the EIS is prepared)). 72 40 C.F.R. § 1501.7(a). 73 40 C.F.R. § 1502.9(a). 74 Id. 75 40 C.F.R. § 1503.1. 76 40 C.F.R. § 1503.1(a)(1). 
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which has requested statements on actions of the kind proposed; any applicant; and the public.77

The agency must “affirmatively solicit[] comments from those persons or organizations who may 

be interested or affected.”78 

The agency then prepares the final environmental impact statement (FEIS). In doing so,

the agency must “assess and consider comments both individually and collectively, and shall 

respond in one or more” of the following ways: (1) modify alternatives including the proposed 

action; (2) develop and evaluate alternatives not previously considered; (3) supplement, improve, 

or modify analyses; (4) make factual corrections; or (5) give a reasoned explanation for why the 

comments do not warrant further response.79 

Several directives are clear from CEQ regulations regarding consultation with respect to 

an EIS. The agency is required to include federal, state, local, and tribal agencies, and the 

public, as well as to respond to commenters.80 The agency is not required to agree with the 

commenter, so long as the agency discloses an opposing point of view and reasonably responds 

to it. On the one hand, “disagreement among experts will not serve to invalidate an EIS.”81 On 

the other, a failure to disclose and respond to a commenter’s evidence and opinions directly 

challenging the scientific basis upon which the EIS rests will defeat it.82 The Ninth Circuit has 

explained that the NEPA requirement to address opposing viewpoints in an FEIS “reflects the 

paramount Congressional desire to internalize opposing viewpoints into the decision-making 

process to ensure that an agency is cognizant of all the environmental trade-offs that are implicit 

in a decision.”83 Once again, the NEPA burden is procedural: the agency must disclose and 

respond. The Administrative Procedure Act requires that the response must make sense; 

otherwise, the agency would reasonably be accused of acting in an arbitrary and capricious 

manner. Accordingly, a federal agency’s comments may be given extra weight over and above 

that of an ordinary citizen, depending on the agency’s expertise in the topic.

The obligations for public disclosure and comment with respect to an EA are entirely 

different. Unlike the rigid public/governmental comment requirements with respect to an EIS, 

agencies need only involve “environmental agencies, applicants, and the public” in preparing 

EAs “to the extent practicable.”84 Normally, the obligation of the agency in preparing a FONSI 

is to disseminate it to the affected public.85 In “certain limited circumstances,” however, the 

agency must make the FONSI “available for public review (including [through] State and 

areawide clearinghouses) for 30 days before the agency makes its final determination whether to 

prepare an [EIS] and before the action may begin.”86

 77 40 C.F.R. § 1503.1(a)(2)-(4). 

 There are two “limited circumstances”: 

78 40 C.F.R. § 1503.1(a)(4). 79 40 C.F.R. § 1503.4(a). 80 E.g., Center for Biological Diversity v. U.S. Forest Service, 349 F.3d 1157, 1168-69 (9th Cir. 2003). 81 Life of the Land v. Brinegar, 485 F.2d 460, 472 (9th Cir. 1973). 82 Center for Biological Diversity, 349 F.3d at 1169. 83 California v. Block, 690 F.2d 753, 771 (9th Cir. 1982). 84 40 C.F.R. § 1501.4(b). 85 40 C.F.R. § 1501.4(e)(1). 86 40 C.F.R. § 1501.4(e)(2). 
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where the proposed action “is, or is closely similar to, one which normally requires the 

preparation” of an EIS, or where its nature is “without precedent.”87

The federal courts have been inconsistent in their interpretations of the CEQ regulations 

with respect to public involvement in the EA process. On more than one occasion, the Ninth 

Circuit has held that a failure to involve the public constitutes a violation of the CEQ regulations. 

In Citizens for Better Forestry v. U.S. Department of Agriculture, the court stated: “Although we 

have not established a minimum level of public comment and participation required by the 

regulations governing the EA and FONSI process, we clearly have held that the regulations at 

issue must mean something. . . . It is evident, therefore, that a complete failure to involve or 

even inform the public about an agency’s preparation of an EA and a FONSI, as was the case 

here, violates these regulations.” 88 And in Anderson v. Evans, the Ninth Circuit held that “[t]he 

public must be given an opportunity to comment on draft EAs and EISs.” 89

By contrast, the First Circuit has held that CEQ’s public participation requirements are 

satisfied even when an agency has not offered a draft or final EA for public comment on grounds 

that “[n]othing in the CEQ regulations requires circulation of a draft EA for public comment, 

except under certain ‘limited circumstances.’”90 Similarly, the Tenth Circuit upheld an agency’s 

publication of an EA when the agency issued public notice of the proposed action and provided a 

comment period, even though the record did not clarify whether the EA was made available to 

the public before the agency issued its decision.91 And in Pogliani v. U.S. Army Corps of 

Engineers,

92 the Second Circuit found that the plaintiffs were unlikely to succeed on their claim 

that the Corps erred by failing to release a draft EA and FONSI for public comment prior to its 

issuance in final form.

The District of Columbia federal district courts have inconsistently interpreted CEQ 

regulations. In Fund for Animals v. Norton,93 the U.S. District Court for the District of 

Columbia struck down as inadequate the publication by the U.S. Fish and Wildlife Service of the 

notice of the availability of a draft EA in the Federal Register, which afforded the public a twoweek comment period followed two weeks later by finalization of the EA, and a week later by 

issuance of the FONSI. By contrast, the same court concluded that “an agency is not expressly 

required to circulate a draft EA for public comment before adopting its final decision, except in 

limited circumstances that do not apply here.”94 The court rejected the plaintiff’s argument that 

the agency was required to provide public opportunity to comment on a draft EA, noting that the 

CEQ regulation only required publication “to the extent practicable.”95

 87 Id. 

 Accordingly, the court 

focused on the factual inquiry as to what had been “practicable” for the agency to accomplish in 

the EA process.

88 341 F.3d 961, 970 (9th Cir. 2003).

89 314 F.3d 1006, 1016 (9th Cir. 2002).

90 Alliance to Protect Nantucket Sound, Inc. v. U.S. Department of Army, 398 F.3d 105, 115 (1st Cir. 2005). 

91 Greater Yellowstone Coalition v. Flowers, 359 F.3d 1257, 1279 (10th Cir. 2004).

92 306 F.3d 1235, 1238-39 (2d Cir. 2002)

93 281 F. Supp. 2d 209, 226-27 (D.D.C. 2003)

94 Biodiversity Conservation Alliance v. U.S. Bureau of Land Management, 404 F. Supp. 2d 212, 220 (D.D.C. 

2005).

95 404 F. Supp. at 220, citing 40 C.F.R. § 1501.4(b).
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J. Timing—Supplemental Statements and Tiering 

Generally, the appropriate time for preparing a NEPA document is prior to a decision, 

when the decision-maker has the widest range of options.96 When the decision results in an 

“irreversible and irretrievable commitment of resources,” NEPA review is required.97 One of the 

most difficult NEPA compliance questions presented to an agency is how to approach agency 

action that is ongoing, repetitive, or takes place in stages. Arguably, the largest federal programs 

with impacts on the physical world are always ongoing. The CEQ regulations address the 

process of considering impacts in consecutive NEPA document as “supplementing” NEPA 

review or “tiering” one NEPA document to another. In such cases, an earlier NEPA document is 

incorporated into a latter one.

Agencies must prepare “supplements to either draft or final [EISs]” if the agency “makes 

changes in the proposed action that are relevant to environmental concerns” or if “[t]here are 

significant new circumstances or information relevant to environmental concerns and bearing on 

the proposed action or its impacts.”98 The supplementing process is further described as follows:

[A]n agency need not supplement an EIS every time new information comes to 

light after the EIS is finalized. To require otherwise would render agency 

decision-making intractable, always awaiting updated information only to find the 

new information outdated by the time a decision is made. On the other hand, and 

as the petitioners concede, NEPA does require that agencies take a “hard look” at 

the environmental effects of their planned action, even after a proposal has 

received initial approval. . . . Application of the “rule of reason” thus turns on the 

value of the new information to the still pending decisionmaking process. In this 

respect the decision whether to prepare a supplemental EIS is similar to the 

decision whether to prepare an EIS in the first instance: If there remains “major 

Federal actio[n]” to occur, and if the new information is sufficient to show that 

the remaining action will “affec[t] the quality of the human environment” in a 

significant manner or to a significant extent not already considered, a 

supplemental EIS must be prepared.99

If information uncovered after a NEPA statement is sufficiently new and significant when 

compared to the information upon which the NEPA statement was based, a new NEPA statement 

is required.

The related concept of “tiering” addresses the sequencing of environmental statements 

generally from broad documents to narrower statements or analyses, or from a broad 

programmatic to a site-specific analysis. Tiering is defined in the CEQ regulations as “coverage 

of general matters in broader [EISs ] . . . with subsequent narrower statements or environmental 

 96 Environmental Defense Fund v. Andrus, 596 F.2d 848, 852-53 (9th Cir. 1979). 97 Mobil Oil Corp. v. FTC, 562 F.2d 170, 173 (2nd Cir. 1977); Sierra Club v. Peterson, 717 F.2d 1409, 1414-15 

(D.C. Cir. 1983). 

98 40 C.F.R. § 1502.9(c)(1). 99 Cf. 42 U.S.C. § 4332(2)(C).; Marsh v. Oregon Natural Resources Council, 490 U.S. at 373-74 (footnotes omitted). 
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analyses . . . incorporating by reference the general discussions and concentrating solely on the 

issues specific to the statement subsequently prepared.”100 The point of tiering is to allow an 

agency to avoid duplicating paper and effort. Assuming a broader NEPA document considers 

impacts, a narrower NEPA document can incorporate such consideration by reference. Impacts 

must be considered in some document, however, and if the agency does tier, the question is 

whether the analysis in the first NEPA document is sufficient to support tiering in the second 

one. In Kern v. Bureau of Land Management,

101 the Ninth Circuit held that an environmental 

impact, consideration of which is eschewed in an EA, must necessarily have been addressed 

adequately in a NEPA document to which the EA is tiered. 

As long as the necessary analysis of a particular action is undertaken at a relevant action 

point, supplementation and tiering are entirely accepted and common practices. In either case, a 

NEPA statement that is tiered to a final EIS, or which is supplemental to one, need not restate 

impacts analysis or alternatives that were already considered in the document it supplements or 

to which it is tiered. Nonetheless, a NEPA document may only be tiered under the CEQ 

regulations to a document that has itself been issued as a document under NEPA.102 Likewise, 

supplementation of NEPA documents can only occur in NEPA documents. 

Because broad Federal programs are ongoing, tiering and supplementation can often 

become the rule rather than the exception. Questions surrounding such programs include when 

to begin a new programmatic review, when a new NEPA review may be required, and what 

requirements are imposed when supplemental or new information arises. In simplistic terms, if 

significant new information comes to light, a supplemental review document is required that

could be tiered to a prior document. The staging of NEPA review cannot ultimately be 

employed to evade NEPA review of a particular impact or action. As sensible as these concepts 

may sound, the staging of NEPA review, and the avoidance of review that staging may 

unwittingly permit, are difficult questions for agencies to resolve.

K. Agency-Formulated Documents That Result From NEPA Compliance But Do 

Not Constitute NEPA Review

NEPA compliance in the context of ongoing agency actions has given rise to certain

practical problems for agencies attempting to determine whether they need to supplement NEPA 

analysis when NEPA documents already exist. If an agency undertakes actions that have already 

been subject to NEPA review and therefore do not require further NEPA analysis, the agency 

may nonetheless be challenged for moving forward without preparing any NEPA document. For 

this reason, agencies have established procedures outside the scope of the CEQ regulations to 

determine whether NEPA analysis already undertaken is sufficient such that no further review is 

required. Federal courts have upheld such agency procedures. In Pennaco Energy v. U.S. 

Department of the Interior,

103

 100 40 C.F.R. § 1508.28.

the Tenth Circuit addressed such a document—in this case, a 

Documentation of NEPA Adequacy—that had been prepared by DOI’s Bureau of Land 

Management (BLM) to determine what NEPA analysis existed, and whether more NEPA review 

101 284 F.3d 1062, 1074 (9th Cir. 2002). 102 Kern, 284 F.2d at 1074. 103 377 F.3d 1147, 1162 (10th Cir. 2004).
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should be undertaken to supplement it. While noting that “[Documentation of NEPA 

Adequacy], unlike EAs and FONSIs, are not mentioned in the NEPA or in the regulations 

implementing the NEPA,” the court upheld BLM’s use of “non-NEPA procedures to determine 

whether new NEPA documentation is required.”104 Though such documents cannot supplement 

previous EAs or EISs or address site-specific effects not previously considered in them, they 

identify for the decision-maker the location of existing NEPA analysis, and allow the decisionmaker to determine whether more is needed.

Other agencies employ different terms for procedures to assess NEPA analysis.

105 The 

critical point to note about these approaches is that, although they are legal means to assess the 

sufficiency of existing NEPA review; these procedures and documents are not NEPA documents 

and do not constitute NEPA review. Whether NEPA review is sufficient, preparation of a 

Documentation of NEPA Adequacy-type document depends on whether NEPA supplementation 

is required.

II. DOI’s Implementation of NEPA Procedures

Consistent with CEQ’s directives, DOI has promulgated regulations and guidance to 

ensure proper application of NEPA and CEQ’s binding rules. The regulations appear at 43 

C.F.R. § 46, and generally reproduce and supplement CEQ’s directions. In addition, DOI has 

prepared a Departmental Manual that establishes guidance, direction, and requirements for, inter 

alia, the proper application of NEPA requirements to Departmental action. In addition to general 

Departmental guidance, the Departmental Manual gives specific direction to each bureau within 

the Department, including the former Minerals Management Service (MMS), which has been 

succeeded since the Macondo well blowout last spring by the Bureau of Ocean Energy 

Management and Regulatory Enforcement (BOEMRE).

106 The regulations and Manual 

provisions are detailed and lengthy. To avoid repeating the above analysis of NEPA, the 

following section mentions only provisions of note or interest to the Commission’s work.

A. DOI NEPA Rules

The regulations at 43 C.F.R. § 46 (“Implementation of [NEPA]”) generally repeat the 

requirements outlined in the CEQ rules. The Departmental rules make clear that use of preexisting NEPA documentation, when further NEPA review would merely duplicate prior 

statements, should be a priority.107 The regulations address “incorporation of NEPA documents” 

and “tiered documents.”108

 104 Id. 

 They also identify a document not mentioned in the CEQ 

regulations—a Finding of No New Significant Impacts (FONNSI). This document must follow 

105 The U.S. Forest Service uses a “validation and verification” procedure. 106 On June 18, 2010, Secretary of the Interior Ken Salazar ordered that the Minerals Management Service be 

officially renamed the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE). For 

consistency, throughout this paper, we will refer to the agency as the Minerals Management Service. As of the 

writing of this paper, the Departmental Manual has not been changed to acknowledge the BOEMRE. 107 43 C.F.R. § 46.120(d) (“Responsible Officials should make the best use of existing NEPA documents by 

supplementing, tiering to, incorporating by reference, or adopting previous NEPA environmental analyses to avoid 

redundancy and unnecessary paperwork.”)

108 43 C.F.R. § 46.135; 46.140.
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the preparation of an EA and is distinguished from a FONSI in that it signifies the EA is tiered to 

a prior NEPA document (specifically an EIS), and the EA process has revealed that all 

significant environmental impacts were studied and any new impacts identified are not 

significant. The full text of this regulation is as follows:

An environmental assessment prepared in support of an individual proposed action 

can be tiered to a programmatic or other broader-scope environmental impact 

statement. An environmental assessment may be prepared, and a finding of no 

significant impact reached, for a proposed action with significant effects, whether 

direct, indirect, or cumulative, if the environmental assessment is tiered to a broader

environmental impact statement which fully analyzed those significant effects. 

Tiering to the programmatic or broader-scope environmental impact statement would 

allow the preparation of an environmental assessment and a finding of no significant 

impact for the individual proposed action, so long as any previously unanalyzed 

effects are not significant. A finding of no significant impact other than those already 

disclosed and analyzed in the environmental impact statement to which the 

environmental assessment is tiered may also be called a “finding of no new 

significant impact.”109

In its entirety, the regulation is accurate, but the italicized portion could be read as 

inconsistent with the CEQ regulations if taken out of context. It is not accurate to say that a 

FONSI can be reached for a proposed action with significant effects, even though it is true that a 

FONSI can be reached if all effects from the proposed action are addressed in a document to 

which the EA is tiered. By contrast, if incremental effects specifically caused only by the 

proposed action addressed in the EA are significant, and are not directly addressed in the EIS, a 

FONSI cannot be issued. The regulation’s creation of a new type of document (FONNSI) may 

confuse the proper application of NEPA in the case of tiering or supplementation for the public 

and for agency employees obligated to implement NEPA. Whether an effect of the action 

studied in the second NEPA document is fully addressed in the first NEPA document may be 

subject to debate. 

The DOI’s rules also address “[c]onsultation, coordination, and cooperation with the 

agencies.”110 They appear to expand the consultation requirement established in the CEQ rules 

by directing consultation “whenever possible” for all NEPA documentation, not just EISs:

The Responsible Official must whenever possible consult, coordinate, and cooperate 

with relevant State, local, and tribal governments and other bureaus and Federal 

agencies concerning the environmental effects of any Federal action within the 

jurisdictions or related to the interests of these entities.111

The DOI NEPA rules provide specific requirements for consultation and notification in 

association with a Notice of Intent, the precursor to the EIS.112

 109 40 C.F.R. § 46.140(c) (first italics added; second in original). 

Nonetheless, regulations 

110 43 C.F.R. § 46.155. 111 Id. 112 43 C.F.R. § 46.435. 
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specifically addressing EAs avoid any suggestion that these rules expand the CEQ consultation 

requirements for EAs. Instead, 43 C.F.R. § 46.305 repeats CEQ’s requirement that consultation 

is necessary only “to the extent practicable”; specifies that doing so is at the discretion of the 

Responsible Official113; ensures that the Department is not required to issue draft EAs and may 

do so only if the Official believes it to be “appropriate”; and permits the decision-maker to 

consult with Cooperating Agencies. The only mandatory requirements in the rules are to 

consider comments given, even if not solicited, and to “notify” the public of the final EA and 

FONSI. Comments on a FONSI generally do not need to be solicited, except as required by 40 

C.F.R. § 1501.4(e)(2), a CEQ regulation that requires a 30-day notice for a FONSI to be 

published in “limited circumstances” defined by individual agencies.

114

DOI’s rules detail the preparation of EAs and EISs in ways more extensive than the CEQ 

rules. Subpart D addresses EAs.115 Subpart E addresses EISs.116 

The regulations also address CEs. Like the CEQ regulations, the Department defines a 

CE as “a category or kind of action that has no significant individual or cumulative effect on the 

quality of the human environment.”117 The rule goes on to note that “[e]xcept as provided in 

paragraph (c) of this section, if an action is covered by a Departmental CE, the bureau is not 

required to prepare” an EA or EIS.118 The reference to paragraph (c) is to the “extraordinary 

circumstances under which actions otherwise covered by a categorical exclusion require analyses 

under NEPA,” which are identified at 43 C.F.R. § 46.215. “Any action that is normally 

categorically excluded must be evaluated to determine whether it meets any of the extraordinary 

circumstances in section 46.215; if it does, further analysis and environmental documents must 

be prepared for the action.”119 Section 46.210 lists actions that constitute “Department-wide” 

CEs. Though the list is extensive, and includes personnel decisions and organizational changes, 

no items on the list pertain to management of oil and gas resources by any bureau.

The Departmental regulations establish the extraordinary circumstances that make an

action otherwise a potential CE subject to NEPA review. “Extraordinary circumstances” exist 

for actions that:

(a) Have significant impacts on public health or safety.

(b) Have significant impacts on such natural resources and unique geographic 

characteristics as historic or cultural resources; park, recreation or refuge lands; . . . 

wetlands (EO 11990); floodplains (EO 11988); . . . migratory birds; and other 

ecologically significant or critical areas.

(c) Have highly controversial environmental effects . . . 

(d) Have highly uncertain and potentially significant environmental effects or involve 

unique or unknown environmental risks.

 113 Id. 114 43 C.F.R. § 46.305(c). 115 43 C.F.R. § 46.310; 46.315; 46.320; 46.325. 116 43 C.F.R. § 46.400; 46.405; 46.415; 46,420; 46.425. 117 43 C.F.R. § 46.205. 118 43 C.F.R. § 46.205(a). 119 43 C.F.R. § 46.205(c)(1).
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(e) Establish a precedent for future action or represent a decision in principle about 

future actions with potentially significant environmental effects.

(f) Have a direct relationship to other actions with individually insignificant but 

cumulatively significant environmental effects.

(h) 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.120

Notably, the Department’s regulations add a category of exclusions from NEPA review 

not found in the CEQ rules—actions excluded by statute. “Congress may establish categorical 

exclusions by legislation, in which case the terms of the legislation determine how to apply those 

categorical exclusions.”121 

B. Departmental Manual

For decades, DOI has issued “instructions, policies, and procedures that have general 

and continuing applicability to Departmental activities, or that are important to the 

management of the Department” in a Departmental Manual.

122 The Departmental Manual

describes the organizations and functions of the Department’s bureaus and offices, 

delegations of the Secretary’s authority, and the policies and general procedures for 

administrative activities and the operations of specific programs. It is used to communicate 

the instructions of the Office of the Secretary throughout the Department, to provide 

guidance to the bureaus and offices in their administrative and program operations, and to 

serve as the primary source of information on organization structure, authority to function, 

and policy as well as general procedures. Bureaus and offices must comply with the 

provisions of the Departmental Manual, except to the extent that the provisions are 

superseded by appropriate authority (e.g., a change in statute, regulation, an executive order; 

a secretary’s order, or a court decision).

123

i. NEPA Procedures at Part 516 of the Departmental Manual 

The Department first proposed draft procedures to implement NEPA and the CEQ 

regulations on July 10, 1979.124 The first procedures were adopted as Part 516 of the 

Departmental Manual on March 18, 1980, to provide “policy and procedural directions to all 

elements of the Department for complying with the mandate of NEPA and the CEQ 

regulations.”125 The Department adopted a broad list of “Departmental Categorical Exclusions” 

in the Departmental Manual, but explained that “[i]nstructions specific to bureaus will be issued 

[subsequently] as appendices to these procedures.” 126

 120 43 C.F.R. § 46.215. 

 Adopting the language from the 

121 43 C.F.R. §. 46.205(d). 122 11 Departmental Manual 1.1. 123 11 Departmental Manual 1.2. 124 44 Fed. Reg. 40436. 125 45 Fed. Reg. 27541. 126 45 Fed. Reg. 27542.
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procedures proposed in 1979, the Department established criteria “to determine actions to be 

categorically excluded from the NEPA process.”127 The criteria are as follows:

(a) The action or group of actions would have no significant effect on the quality of 

the human environment.

(b) The action or group of actions would not involve unresolved conflicts concerning 

alternative uses of available resources.128

The Departmental Manual goes on to note:

Based on the above criteria, the classes of actions listed in Appendix 1 to this Chapter 

are categorically excluded Department-wide from the NEPA process, Bureaus shall 

list categorical exclusions specific to their programs in the Bureau Appendix to 

Chapter 6.129

In Chapter 6, the Departmental Manual directs “heads of Bureaus and offices to “propose 

categorical exclusions.”130 As described below, these provisions remained in place until 2009, 

when Chapters 1-6 of the Departmental Manual were amended and all references to CEs and

exceptions to their use were removed.

ii. Departmental Manual Offshore CEs

From the first Departmental oil and gas NEPA compliance review, the United States 

Geological Survey (USGS) defined certain key approvals in the Western and Central Gulf of 

Mexico as categorically excluded from NEPA review, including: applications for permits to drill

(APD); exploration plans (EP); and development and production plans (DPP); and then, as 

amended later, development operations and coordination documents defined by MMS.131 

The USGS’s decision to treat Gulf of Mexico planning documents and the drilling of 

wells in this region as exempt from NEPA review appears to have stemmed from statutory 

provisions in, and congressional commentary associated with, passage of the Outer Continental 

Shelf Lands Act (OCSLA) amendments of 1978. Although USGS has never explained its 

decision to treat EPs as categorically excluded, USGS may have believed that DPPs were 

statutory CEs, which could not be subject to regulatory exception. USGS also treated APDs in 

the Western Gulf region the same as it treated other applications for the Outer Continental 

Shelf—categorically excluded as effectively “tiered” to approved planning documents. This 

conclusion was a questionable application of the CE, as defined by CEQ, for the entire Outer 

Continental Shelf, but improper in the Western Gulf because no tiering to a CE (a non-NEPA 

document) is allowed. MMS later came to believe that planning documents in the Western Gulf 

were categorically excluded from NEPA review because they met the CEQ definition of a CE, 

 127 516 Departmental Manual 2.3.A(1) (1980). 44 Fed. Reg. 40439 (July 10, 1979) (copied in final at 45 Fed. Reg. 

27544 (Apr. 23, 1980)).

128 516 Departmental Manual 2.3.A(1) (1980). 129 Id. at 2.3A(2). 130 Id. at 6.4.A(3). 131Ultimately, MMS created three Gulf of Mexico areas: Western, Central, and Eastern. For purposes of NEPA, 

MMS grouped the Western and Central areas together. 
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even though MMS regulations acknowledged that such planning document approvals did have 

significant impacts on the human environment in other Outer Continental Shelf regions. MMS 

squared neither its understanding of how the USGS CEs came into being nor its contradictory 

description of the effects on the human environment of approvals of the same planning 

documents, as occurring or not occurring depending on a geographic boundary. 

By the time the relevant approvals were given for the Macondo well, all of these 

problems undercut the use of CEs. Even if the categorical exceptions, as applied to APDs and 

planning documents in the Western Gulf, could be squared today, it is questionable whether 

MMS properly applied these exceptions to the circumstances presented by deepwater wells.

The convoluted history of defined CEs for offshore oil and gas development stems from a 

statute, is developed through the Departmental Manual, and coincides with regulations enacted 

by relevant bureaus. The basis for the Department’s determination that the APDs, EPs, DPPs, 

and DOCDs in the Western Gulf are categorically excluded from NEPA review seems to have 

been poorly understood by the MMS. In particular, Notices to Lessees changed the application 

of the rules in critical ways.132 Provisions of regulations cited in the Departmental Manual have 

been superseded, compounding problems with interpreting what does and does not apply 

offshore. The following discussion attempts to extract the story of the creation and maintenance 

of the CEs by examining the text and legislative history of the OSCLA 1978 amendments, the 

pertinent parts of the Departmental Manual, and the Departmental regulations. The discussion

reveals seeming inconsistencies with the discussion of NEPA in Part 1 of this paper. 

Accordingly, the following points must be kept in mind:

(1) Other than citing to the 1978 amendments to OCSLA and regulations implementing 

that statute, how the Department derived CEs for DPPs (or DOCDs) in the Western Gulf 

region was not articulated when they were created.

(2) Staff research has not determined why the USGS concluded that approval of EPs for 

the Western Gulf of Mexico region should constitute a CE.

(3) To the extent the Department defined Western Gulf EPs and DPPs as CEs based on its 

reading of the OCSLA amendments of 1978, this was not a result of a statutory mandate 

by Congress.

(4) If MMS believed that relevant CEs were in place because of a statutory mandate, it 

would be inappropriate for it to undertake to review whether exception to the CE should 

occur because of extraordinary circumstances, because the exception could not override a 

statutory provision.

(5) Approval of the planning documents defined to be CEs has not been specifically 

identified by any Departmental bureau not causing impacts on the environment, and 

therefore fitting within the CEQ definition of a CE.

 132This paper does not separately document the extensive Notices to Lessees that have applied to CEs.
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(6) If the Department believed the relevant CEs were in place because they met the CE

definition in the CEQ rules or Departmental regulations, then any approval (APD, EP, 

DPP, DOCD) would have to be reviewed to ensure that a particular action is not an 

unusual circumstance calling for NEPA review before being categorized as a CE.

(7) APDs are categorically excluded from NEPA review if the subject wells are identified 

in an approved plan (EP, DPP, DOCD) that, outside the Western Gulf region, would be 

subject to NEPA review. In the Western Gulf region, the plans to which an APD is 

“tiered” are not subject to NEPA review because they are identified as CEs. Such 

“tiering” to non-NEPA documents is improper.

C. The Source of the Western Gulf of Mexico Offshore Categorical Exclusions—

OCSLA Amendments of 1978

In 1978, Congress enacted Public Law 95-372 to amend OCSLA. A single provision, 

section 25, is the source of the CEs in the Departmental Manual. Section 25 (codified at 43 

U.S.C. § 1351), which addresses “oil and gas development and production,” is particularly 

relevant for two mains reasons. First, it adds a requirement that OCS lessees must submit a 

detailed DPP for approval by DOI, which, at least once in an area or region, shall be considered a 

“major Federal action significantly affecting the quality of the human environment” and thus 

require an EIS.133 Section 25 establishes extensive consultation requirements for these plans and 

terms for coordination with coastal zone management provisions. Second, section 25 explicitly 

excepts the Gulf of Mexico region from its terms. In an exception to that exception, Congress 

added a final subsection (l) that permits the Secretary of the Interior to apply section 25 to leases 

in the Eastern Gulf of Mexico.134 The end result is that the OCSLA, as written today, requires 

Outer Continental Shelf lessees to submit DPPs, and requires that at least once for each area such 

a plan must be subject to an EIS, except in the Western Gulf of Mexico, where these 

requirements do not apply. 

The legislative history surrounding the OCLSA 1978 amendments shows that competing 

factors produced these amendments. High energy prices in the late 1970s combined with

America’s increasing dependency on foreign oil prompted a call for increased development in 

undeveloped Outer Continental Shelf areas, and for a quick turnaround on actual production once 

the leases were issued. As the legislative history explained:

Until December 1975, the OCS leasing program was confined almost exclusively to 

the Gulf of Mexico. The only exception was a small area leased off southern 

California in the Santa Barbara Channel. [...] If we are to increase our OCS oil and 

gas development, leasing must take place in new or “frontier” areas. 135

The history of the amendments further describes “steps already taken in that direction,” 

including President Carter’s directive that CEQ study environmental impacts of oil and gas 

 133 See Public Law 95-372, section 25 at subsections(a)(1), (b), and (e). 134 Id. at section 25(l). 135 Report No. 95-284, the Subcommittee on Energy and Natural Resources Report to Accompany S. 9 (June 21, 

1977) at 50. 
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production on the Atlantic and Gulf of Alaska Outer Continental Shelf, an acceleration in leasing 

from 1 million acres in 1973 to 10 million acres in 1975, and a DOI Federal Register request for 

comment on 17 potential Outer Continental Shelf oil and gas leasing areas.136 Concern also 

stemmed from the 1969 Santa Barbara oil spill. Congress wanted to ensure increased oversight 

of development and production, through the plans identified in section 25, with concomitant 

environmental protection, state and local consultation provisions, and coordination with Coastal 

Zone Management Act requirements. This was “one of the most important provisions.”137 Each 

lessee was required to submit a DPP with “information about the nature and extent of the 

proposed development, including . . . environmental safeguards and safety standards to be 

implemented.”138 The DPP was subject to consultation with the governors, local officials, and 

the public.139

The industry expressed concerns about additional environmental review, stating that it 

was a “constraint[] to expanded production.”140 The Government Accounting Office reported 

that industry representatives demanded “timely, efficient, and effective methods for 

environmental assessment and realistic assessment of tradeoff[s] between energy needs and 

environmental hazards.”141 Indeed, the American Petroleum Institute suggested that the 

additional NEPA and consultation requirements could add three to six years to the time between 

leasing and production.142 

Section 25 manifested something of a compromise. In the OCSLA 1978 amendments, 

DPPs subject to NEPA and consultation requirements were compulsory in frontier areas, but not 

in the Gulf of Mexico or the Santa Barbara Channel, where development was well-established.143

The legislative history includes correspondence illustrating a debate about these issues among 

Congress, Federal agencies, the Secretary of the Interior, and the industry. In a letter to the 

Senate Subcommittee on Energy and Natural Resources Chief Counsel dated May 10, 1977, the 

Secretary of the Interior explained the reasoning behind the exception for lessees in the Gulf and 

Santa Barbara Channel, but expressed concerns about this exception. He proposed alternative 

language that would permit DOI to make case-by-case determinations as to whether a DPP might 

be advisable even in the excepted regions: 

One of the most significant changes in S. 9 and H.R. 1614 of existing practice is the 

detailed review and state participation required prior to approval of development and 

productions plans. Approval of these plans will in many cases require preparation of 

an [EIS]. An EIS would be required, for example, at least once prior to major 

development in any area or region of the OCS. These are addressed in section 25 of 

the bills. Section 25, however, excludes the Santa Barbara Channel and the Gulf of 

Mexico from its requirements. We believe the Secretary should have the option, 

where necessary, of applying the provisions of section 25 in these two areas. The 

 136 Id. 137 Id. at 82. 138 Id. at 83. 

139 Id. at 82. 140 Id. at 62. 141 Id. 142 Id. at 144-45. 143 Id. at 83. 
- 22 -

Santa Barbara Channel and the Gulf of Mexico have been well developed within 

recent years and the purpose for the general exclusion in section 25 is understandable. 

There may be, however, more areas of the Channel or the Gulf where application of 

these provisions is advisable. Therefore, we recommend addition of the following 

language as section 25(k) . . . .

“An oil and gas lease issued or maintained under this Act which is located in the 

Gulf of Mexico or the Santa Barbara Channel shall be subject to the provisions of 

this section if the Secretary determines, pursuant to regulations prescribed by 

[him], that the likely environmental or onshore impacts of the development and 

production of such lease make the application of the provisions of this section in 

the public interest.”144

The Secretary of the Interior’s suggested provision was not adopted. In the final version 

of the OCSLA amendments of 1978, the Santa Barbara exception was removed, and the final 

subsection (l), ensuring that Department could apply section 25 in the Eastern Gulf of Mexico, 

was added. The Western Gulf, however, remained an exception to any requirement of a DPP, 

which in section 25 was “at least once” the subject of an EIS. As the August 10, 1978, 

Conference Report explained:

The House amendment requires a development and production plan to be submitted 

for all future leases in a frontier area. The Senate bill provides for a development and 

production plan to be submitted for all future leases anywhere. The conference report 

requires a plan to be submitted for all future leases except in the Gulf of Mexico.

The House amendment also requires a plan to be submitted for existing leases in frontier 

areas, where no oil or gas has been yet discovered. The Senate bill similarly requires a 

plan to be submitted for existing leases where there has not yet been a discovery, but 

exempts the Gulf of Mexico. The conference report adopts the Senate language. Thus, 

the mandate and specific procedures of this bill that the Secretary of Interior must secure 

submission, and then review, approve, or disapprove a development and production plan 

applies to new leases or existing leases where there has not yet been a discovery and 

does not apply to leases, old or new, in the Gulf of Mexico.

The requirements of this new section are specifically made inapplicable to the Gulf of 

Mexico. However, there are areas in the eastern gulf that have never been developed. . . 

. The conferees therefore adopted a provision that gives the Secretary of the Interior the 

discretion to require submission of plan[s]–in accordance with this section–for 

development and production activities in this area which is defined as being adjacent to 

the State of Florida.145

The statute, as amended by section 25 of the OCSLA amendments of 1978, remains in 

effect. Subsection (b) prohibits development of a lease anywhere on the OCS “other than the 

 144 Id. at 154-55. 145 Id. at 115-16. 
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Gulf of Mexico” without a DPP.146 Subsection (e)(1) requires a DPP everywhere else to be 

subject to an “at least once” EIS: “At least once the Secretary shall declare the approval of a 

development and production plan in any area or region (as defined by the Secretary) of the outer 

Continental Shelf, other than the Gulf of Mexico, to be a major Federal action.”147 Likewise, the 

exception from the exception appears in subsection (l): “The Secretary may require the 

provisions of this section to apply to an oil and gas lease issued or maintained under this 

subchapter, which is located in that area of the Gulf of Mexico which is adjacent to the State of 

Florida.”148

Whatever the legislative history may reflect about Congress’s intentions with respect to 

additional NEPA review in the Western Gulf, the statutory language controls the proper 

interpretation of the OCSLA 1978 amendments. The statutory language was precise about what 

must happen outside the Western Gulf OCS region—mandatory DPPs for all leases and an EIS 

at least once rules the Department can now or could then have imposed in the Western Gulf were

less obvious. But the statute did not prohibit NEPA review of Federal action there; it made the 

requirements of section 25 inapplicable there. 

The statute also addresses EPs. The provisions codified at 43 U.S.C. § 1340(c) require 

lessees to submit EPs and require the Secretary to approve such plans within 30 days of 

submission. The statute does not address whether the plans qualify as major Federal actions

significantly affecting the human environment, nor does it except or address the Gulf of 

Mexico.149 In addition, the statute permits the Secretary to require lessees to submit an APD for 

a permit to drill in accordance with an approved EP.150 

D. Departmental Manual Offshore Categorical Exclusions 

At the time of the first publication of the Departmental Manual, responsibility for 

addressing Outer Continental Shelf activity fell to the USGS. The USGS proposed its NEPA 

compliance procedures, and also its first Departmental Manual CEs, in 1980.151 From these first 

proposals, USGS identified all APDs as categorically excluded so long as they were described in 

an approved EP or DPP. 

In the Western Gulf of Mexico, however, USGS also excluded the EP or DPP from the 

NEPA process.152

 146 43 U.S.C. § 1351(b). 

 The only explanation for this was a citation to USGS offshore rules 

implementing the OCSLA amendments of1978. Without articulating its logic, USGS thus 

suggested that the statute itself prohibited NEPA review of both DPPs and EPs in the Western 

Gulf of Mexico. At a minimum, USGS may have believed that construing section 25’s 

exception for DPPs in that region in any other manner would provoke a controversy. USGS 

gave no reason for concluding that Western Gulf EPs would be categorically excluded. It

proposed the following CEs:

147 43 U.S.C. § 1351(e)(1). 148 43 U.S.C. § 1351(l). 

149 Id. 150 43 U.S.C. § 1340(d). 151 45 Fed. Reg. 75336 (Nov. 14, 1980). 152 See 516 Departmental Manual 2.4.A(2) (1980). 
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(24) Approval of an Application for Permit to Drill (APD) an OCS oil and gas 

exploration or development well when said well is described in an approved 

exploration plan, development plan, or production plan. . . . .

(36) Approval of OCS exploration plans in the Western Gulf of Mexico (30 C.F.R. §

250.2). . . .

(37) Approval of OCS development/production plans in the Western Gulf of Mexico 

(30 C.F.R. § 250.2).153

Proposed CEs 27-30 addressed onshore APDs as CEs. Acknowledging that DPPs likely 

addressed action that would cause (according to Congress, at least) significant impacts, USGS 

noted that elsewhere such plans would likely require an EIS. USGS listed as “major actions 

normally requiring an EIS”:

Approval of an OCS oil and gas development and production plan in a frontier area, 

when the plan is declared to be a major Federal action in accordance with Section 25 

of the OCS Lands Act Amendments of 1978 (30 C.F.R. § 250.34-4).154

The proposed USGS Departmental Manual provisions were approved as a final appendix 

to the Department’s NEPA procedures on January 19, 1981, and published in the Federal 

Register on January 23, 1981.155 Without further examining differences between the Western 

Gulf and other areas of the Outer Continental Shelf, USGS cited the OCSLA amendments of

1978 and 30 C.F.R. § 250. It did, however, reinforce the distinctions in response to comments. 

One commenter requested a change requiring EISs for all DPPs except in the Gulf of Mexico. 

USGS disagreed and stated that it would “follow the environmental review process established in 

30 C.F.R. § 250.34.”156 USGS explained: “We will, in any area or region of the OCS, except in 

the Western Gulf of Mexico, prepare at least one development/production plan EIS pursuant to 

subsection 25(e) of the OCS Land[s] Act Amendments of 1978.”157 

The final appendix revised the order of CEs and separated onshore oil and gas CEs from 

offshore ones.158 But in concept the offshore CEs were unchanged. The final CEs appeared in 

Part 2.4 of the USGS appendix to Chapter 6 of the Departmental Manual. The offshore CEs 

were as follows:

(b) Approval of an OCS exploration or development/production plan in the Western 

Gulf of Mexico (30 C.F.R. § 250.2) which does not require an environmental report 

from an operator pursuant to item 3 of [Notice to Lessee] 80-6. . . . 

 153 45 Fed. Reg. 75336-37 (CEs listed in the Chapter 6, draft USGS appendix Part 2.4). 154 Draft USGS appendix Part 2.3, 45 Fed. Reg. 75336 (Nov. 14, 1980). 155 46 Fed. Reg. 7485. 156 Id. 157 Id. (emphasis added). 158 Part 2.4.B(2)(a)-(h), at 46 Fed. Reg. 7487 (Jan. 23, 1981) (onshore CEs). Congress subsequently created a 

“rebuttable presumption” that certain onshore APDs are categorically excluded from NEPA review in section 390 of 

the Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594. 42 U.S.C. § 15942(a) and (b). The presumption 

exists generally if the wells are foreseeable in a NEPA document prepared in the previous five years.
- 25 -

(d) Approval of an APD for an oil and gas exploration or development well when 

said well and appropriate mitigation measures are described in an approved 

exploration plan, development plan, or production plan.159

The Departmental Manual was amended in 1986, after the establishment of and transfer 

of oil and gas responsibilities to MMS. MMS addressed oil and gas development in Appendix 

10 to Chapter 6, which was approved August 12, 1986. The Departmental Manual was 

reorganized again on May 27, 2004. Appendices produced by individual bureaus within the 

Department were assigned chapter numbers, and MMS’s CEs were placed in Chapter 15. The

critical elements of the original USGS CEs, however, never changed: An APD for any offshore 

well is categorically excluded from NEPA review so long as it is described in an approved plan 

for exploration, development, production, or operations; and, in the Western Gulf, such plans are 

themselves categorically excluded from the NEPA process. Other changes were significant, 

however. MMS separated the Western from the Central Gulf regions but defined plans 

submitted for offshore leases within both to be CEs. MMS added the newly created DOCD—the 

counterpart to the DPP required to be submitted by Gulf lessees—as a CE. And MMS revised 

the CEs for planning documents to ensure that exceptions were available in particular 

environmental situations. As currently written, the offshore CEs are as follows: 

(10) Approval of an offshore lease or unit exploration[,] development/production plan 

or a Development Operation Coordination Document in the central or western Gulf of 

Mexico (30 C.F.R. § 250.2) except those proposing facilities: (1) In areas of high 

seismic risk or seismicity, relatively untested deep water, or remote areas; or (2) 

within the boundary of a proposed or established marine sanctuary, and/or within or 

near the boundary of a proposed or established wildlife refuge or areas of high 

biological sensitivity; or (3) in areas of hazardous natural bottom conditions; or (4) 

utilizing new or unusual technology. . . .

(12) Approval of an Application for Permit to Drill (APD) an offshore oil and gas 

exploration or development well, when said well and appropriate mitigation measures 

are described in an approved exploration plan, development plan, production plan, or 

Development Operations Coordination Document.160

The language italicized above is important. The addition of exceptions to the CEs for 

particular circumstances where environmental damage could be severe only makes sense if MMS 

necessarily recognizes that the basis for the CE is not a statutory mandate but rather the CEQ 

definition of a CE—an action not normally causing an effect on the quality of the human 

environment. If the reason for the CE is a mandatory statutory exclusion from NEPA, the statute 

cannot be overridden by a regulatory exception.161 Previously, USGS had never suggested that 

approval of an EP or DPP met the definition of a CE. To the contrary, Congress defined 

approval of a DPP as something normally causing significant impacts that required an EIS at 

least once. This significant change in the language raises questions about the basis for the CEs.

 159 Appendix 5 at 2.4.B(3) (1981), published at 46 Fed. Reg. 7487 (Jan. 23, 1981). 160 516 Departmental Manual 15.4.C (2004 and 2010). 161 See 43 C.F.R. § 46.205(d). 
- 26 -

It remains true that approval of plans outside portions of the Gulf of Mexico “normally” 

require an EIS. The OCSLA 1978 amendments continue to be the source of that Departmental 

Manual provision.162 Nonetheless, the fact that MMS came to believe the CEs were founded in 

the CEQ and Departmental definitions was also reinforced elsewhere in the 2004 Departmental 

Manual, which specifies, consistent with the CEQ regulations and with 43 C.F.R. § 46, that a CE

cannot apply to a proposed action if one of the exceptions to the application of CEs pertains. 

The MMS CEs, reorganized in 2004, state that “the following MMS actions are designated 

categorical exclusions unless the action qualifies as an exception under Appendix 2 of 516 

[Departmental Manual] 2.”163 

This statement is decidedly problematic. First, the statement would not be true, if (as 

USGS originally suggested) the CE was mandated by law.164 Second, Chapters 1-6 of the 

Departmental Manual was revised in 2009 and condensed into four chapters. Nothing in the 

2009 version of Chapters 1-4 defines a CE or specifies the exceptions to the application of CEs 

that were present in Chapter 2 in 2004 when MMS’s Chapter 15 was created. 

It is important to note that the remainder of the Departmental Manual, as amended, does 

properly refer back, as it must, to the superior application of the CEQ regulations and 

Departmental regulations at 43 C.F.R. § 46. Chapter 1 states that it “supplements the CEQ and 

DOI regulations and must be read in conjunction with both.”165 Elsewhere Chapter 1 specifies 

that in case of any discrepancies among Departmental guidance, “Departmental regulations at 43 

CFR 46 and 516 Departmental Manual 1-4 shall govern.”166 MMS’s Chapter 15, however, 

became more and more attenuated from its original purpose, MMS regulations, and the 

Departmental Manual itself. If, in fact, Department regulations govern in the case of a 

discrepancy between MMS regulations and the Departmental Manual, and the statute is not the 

source of the CEs for EPs, DPPs, and DOCDs, then it is questionable whether the CEs are valid 

in the absence of some reasonable determination showing that approval of such plans is “a 

category or kind of action that has no significant individual or cumulative effect on the quality of 

the human environment.”167

 162 516 Departmental Manual 15.4 (2004 and 2010) (“Major Actions Normally Requiring an EIS”).

 

163 Emphasis added. 164 43 C.F.R. § 46.205(d). 165 516 Departmental Manual 1.1 (2010) (Purpose). 166 516 Departmental Manual 1.8.C (2010) (Mandate). 167 43 C.F.R. § 46.205.
- 27 -

E. Departmental Rules Implementing OCSLA Amendments of 1978

USGS promulgated rules applicable to offshore oil and gas operations that exempted 

lessees in the Western Gulf region from the requirement to prepare a DPP. In regulations

incorporated into the CEs adopted by USGS and later MMS, codified at 30 C.F.R. § 250, the 

Department defined the Western Gulf of Mexico and addressed “compliance with [NEPA].”168

In this latter regulation, which otherwise addressed NEPA review in association with EPs and 

DPPs, the Department made clear that USGS must “declare the approval of a development and 

production plan” in “the OCS, except in the western Gulf of Mexico, to be a major federal action 

at least once pursuant to subsection 25(e) of the Act.”169 This regulation was promulgated on 

September 14, 1979.170 USGS’s final 1981 CEs cross-referenced these rules. 

Later, on several occasions, MMS redesignated and amended these regulations to 

incorporate extensive and specific requirements for the submission of EPs and DPPs.171 These 

changes amended Part 250, which addresses whether the OCSLA amendments of 1978 prohibit

the Department from requiring DPPs in the Western Gulf; accordingly. MMS created a 

“development operations coordination document,” or DOCD, which was a substitute document 

required only in the Western Gulf region: 

Development and Production Plans are not required for leases in the western GOM. 

For these leases, the lessee shall submit to the Regional Supervisor for approval a 

Development Operations Coordination Document with all information necessary to 

assure conformance with the Act, other laws, applicable regulations, lease provisions, 

or as otherwise needed to carry out the functions and responsibilities of the Regional 

Supervisor.172

References to DPPs include these Gulf of Mexico DOCDs.173 These regulations specified, as in 

the OCSLA 1978 amendments, that the Department would evaluate the environmental impacts 

of a DPP at least once in an EIS, except in the Western Gulf of Mexico. 174

In 2005, MMS again revised Part 250. Though MMS outlined several of its changes, it 

explained that the purpose of the amendments was to codify directives to lessees already in place 

in Notices to Lessees.175 This rulemaking contained particular requirements for the contents of 

EPs, DPPS, and also DOCDs: consultation, environmental review, addressing of direct and 

cumulative effects on onshore and offshore environments resulting from implementation of EPs, 

DPPs, and DOCDs.176 

 168 30 C.F.R. § 250.34-4. 169 30 C.F.R. § 250.34-4(d). 170 44 Fed. Reg. 53700. 171 See 63 Fed. Reg. 29479, 29485 (May 29, 1998). 172 30 C.F.R. § 250.204(d)(1) (2000). 173 43 C.F.R. § 250.200. 174 43 C.F.R. § 250.204(j). 175 70 Fed. Reg. 51478 (Aug. 30, 2005). 176 E.g., 30 C.F.R. § 250.227 (EPs).
- 28 -

In the preamble to this rulemaking, MMS addressed its NEPA processes, including the 

CEs, in a way indicating that MMS was unaware USGS had established the CEs by citing the 

OCSLA 1978 amendments; of the fact that DPPs must, at some point, be subject to an EIS; or of 

the fact that a CE is excepted from the NEPA review process rather than a part of it. MMS 

correctly explained that it “must comply with” NEPA, and relevant regulations.177 But it went 

on to state, “According to NEPA requirements, MMS must prepare an [(EA)] in connection with 

its review of plans for activities on the OCS . . . . The appropriate MMS Region prepares these 

analyses for every plan received.” However, the NEPA regulations (40 C.F.R. § 1508.4) do 

allow agencies to exclude categories of actions from the preparation of an EA or an EIS when 

agency procedures have demonstrated that these actions—individually or cumulatively—do not 

have a significant impact on the environment.

MMS follows the procedures outlined in the Departmental Manual178 to categorically 

exclude routine OCS lease or unit plans in the Western and Central Gulf of Mexico areas unless 

certain exceptions are present. Some exceptions pertain to the nature of the proposed activity, 

and others to the nature of potential environmental impacts that may result from the activity. 

When MMS processes plans using a Categorical Exclusion Review, the agency reviews the 

proposed activity and the potential environmental impacts at the proposed site. These actions do 

not require MMS to prepare an EA, and MMS may limit the information that the lessee/operator 

is required to submit unless the information is required for compliance with other Federal laws. 

MMS prepares an EA in its review of plans that meet the criteria of the specified exceptions to 

the CE criteria or will prepare an EIS. Whether MMS reviews plans through the Categorical 

Exclusion Review or EA process, the agency requires that environmental impacts be avoided or 

diminished to an acceptable level through plan amendments or conditions MMS imposes during

the plan approval process.

179

Thus, by 2005, MMS was asserting that DOCDs submitted for portions of the Gulf are 

categorically excluded from NEPA review because they are “routine” and, by definition, not the

sort of action that will have an impact on the quality of the human environment. At the same 

time, MMS believed that elsewhere planning documents normally require EAs (instead of the 

“at-least-once” EIS). In addition, MMS regulations at 43 C.F.R. § 250 addressed environmental 

requirements with respect to DOCDs, and treated them as the same as DPPs. For all planning 

documents, the regulations compelled submission of documents for purposes of NEPA review, 

reflecting the view that environmental impacts could result from the approvals. These positions 

about the nature of effects resulting from approval of planning documents cannot be squared.180

 177 70 Fed. Reg. 51478 (Aug. 30, 2005). 178 516 Departmental Manual 15 (2010). 179 Id. (emphasis added). 180The Congressional Research Service’s June 4, 2010 Report on the Deepwater Horizon Oil Spill quotes MMS as 

stating that CEs are available when “the impacts from the common operations are expected to be negligible to nonexistent based upon general information gathered during past environmental analysis.” Congressional Research 

Service, The 2010 Oil Spill: The Minerals Management Service (MMS) and the National Environmental Policy Act 

(NEPA) at 12 (June 4, 2010). The source of the cited MMS document at CRS’s Appendix C is unclear. To the 

extent the quote is from an MMS paper or statement, it reflects some confusion about the proper definition of a CE. 

If, in fact, MMS found during regular NEPA document review that a particular type of agency action routinely had 

“negligible/non-existent” impacts, it would have been necessary for MMS to officially define such action as a CE 

based on the CEQ definition as a direct result of such experience with NEPA review, or else continue to perform 

NEPA review, which presumably would result in FONSIs. But no such event occurred. The CEs for DPPs and EPs 
- 29 -

III. NEPA Issues Surrounding the Macondo Well

A. Question 1—Categorical Exclusions 

MMS concluded that actions in approving the Exploration Plan and APD for the 

Macondo well fell within CEs, and therefore were not subject to NEPA. By CEQ’s definition, 

these actions were therefore in a “category of actions which do not 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 the regulations (§ 1507.3) and for which, therefore, 

neither an [EA] nor an [EIS] is required. . . . .”181 Because the idea that drilling a deepwater well 

on the Outer Continental Shelf is the sort of action that “does not have a significant effect on the 

human environment” appears, with hindsight, to be inherently illogical, the question arises 

whether BLM properly applied the CE procedures.

DOI’s precise stance on these topics is unclear. Soon after enactment of the OCSLA

1978 amendments and the 1978 CEQ regulations, USGS created CEs in the Western Gulf. It 

categorically excluded from NEPA review all exploration, development, and production plans, 

and applications for permits to drill (so long as they were addressed in an approved plan). In 

doing so, USGS never identified such plans as actions, as defined by the CEQ or DOI, that are 

within the category of actions not having a significant impact on the human environment. 

Instead, by citing the OCSLA 1978 amendments, USGS implied that the law compelled CEs. 

That this happened in 1980-81 (as the Departmental Manual provisions moved from draft to 

final) is not surprising given the legislative history of the OCSLA 1978 amendments. Section 25 

of the OCSLA1978 amendments, however, addressed DPPs but excepted the Western Gulf 

region from its application. This is not the same thing as saying that Federal action in that region 

would be exempt by law from NEPA review. 

By regulation, MMS later created a new planning document for approval in the Gulf—a 

DOCD—thus seemingly acknowledging that section 25 of the OCSLA 1978 amendments did not 

define the Gulf as excluded from the regulation requiring planning documents. If that is the case, 

by analogy it seems unlikely that NEPA exemption for the region is compelled by section 25. 

As the years passed, MMS appeared to lose sight of how the CEs came into being. 

Without questioning whether they were properly defined as CEs, MMS presumed that they were 

properly defined, and applied exceptions to the CEs in locations where particular types of 

environmental effects might be felt. Thus, MMS came to act as if the CEQ and Departmental 

definitions of an action, which do not normally have an effect on the human environment,

properly applied to approvals of EPs, DPPs, and DOCDs in the relevant Gulf regions, while 

enforcing regulations that made clear that the same approvals in other regions could not meet 

that definition and required EAs and EISs.182

 were put in place for the Western Gulf region almost 30 years ago, when the first NEPA Departmental Manual was 

established. 

 It seems difficult to sustain such competing views 

181 40 C.F.R. § 1508.4. 182 30 C.F.R. § 250. See also MMS , Oil and Gas Leasing, Exploration & Development Process, Figure 1 (depicting 

EAs and EISs for EPs and DPPs). 
- 30 -

of the environmental impacts of the same planning documents based solely on lines drawn on a 

map. MMS has never precisely addressed the justification for its employment of CEs. By 

employing terms such as “Categorical Exclusions Review” for the process to decide whether an 

agency action should fall within a CE found in the Departmental Manual, the inference could be 

drawn (and may have been intended by MMS) that the Categorical Exclusion Review was a third 

level of NEPA review rather than a plain exemption from NEPA review—the quintessential 

definition of a CE in CEQ’s regulations.183 

With respect to the Macondo well, MMS conducted NEPA review at the lease planning 

stage and the lease sale stage. Relevant to the use of CEs, however, MMS considered an EP for 

Lease 206 (the lease on which the Macondo well was drilled), an amended EP, and four APDs. 

In every case, MMS applied CEs.184 There are several problems with these decisions by MMS.

First, it is not clear why, 29 years into the consistent agency declaration of CEs, these 

leases were defined as CEs in the first place. The rationale behind the CE for the exploration 

plans was not explained. While it has been suggested that USGS categorically excluded EPs in 

the Gulf because of the 30-day approval requirement of the OCSLA,185 this time frame applies 

throughout the Outer Continent Shelf under that statute. Yet, EPs in other regions are subject to 

NEPA under 43 C.F.R. § 250, as discussed by MMS in the preamble to its 2005 rules. The 

finding that the Gulf region EPs are exempt from NEPA review seems to be inexplicable. 

Second, to the extent that the agency came to believe the OCSLA 1978 amendments did 

not compel the CEs, there seems to be no basis for the implicit conclusion that approvals of EPS, 

DPPs, or DOCDs in the Gulf region are actions that do not have an impact on the human 

environment. The same planning documents were found to require NEPA review in agency 

rules at 30 C.F.R. § 250, and, therefore, without a sensible explanation for the difference, the 

continued employment of CEs in the Gulf region on this basis is suspect. 

Third, the APDs are subject to CEs when the well to which they pertain is subject to an 

approved planning document. While it does not constitute NEPA review, a CE is a product of 

NEPA and CEQ regulations. The fact that an action is the subject of another NEPA document, 

and therefore does not require duplicate NEPA review, is an effect of tiering. Defining APDs as 

categorically excluded from NEPA (except in the context of Energy Policy Act CEs, which are 

identified by law) is a questionable extension of the tiering concept. Further, to the extent that 

defining approval of APDs as categorically excluded derives from the notion that it is 

unnecessary to do another NEPA review because one was already done for the planning 

document, this logic does not and cannot apply when the planning document was not subject to 

NEPA in the first place. No NEPA review can be tiered to a non-NEPA document, and a CE is 

not a NEPA document. Accordingly, application of the CEs for APDs to any geographical place, 

though long-standing, has inherent logical flaws; application in the Western Gulf of Mexico 

 183 40 C.F.R. § 1500.4(p). 184 See Council on Environmental Quality, Report Regarding the Minerals Management Service’s

National Environmental Policy Act Policies, Practices, and Procedures as They Relate to Outer Continental Shelf 

Oil and Gas Exploration and Development CEQ, Figure 2 (Aug. 16, 2010) [hereinafter CEQ Report]. 185 43 U.S.C. § 1340.
- 31 -

where the planning documents were never subject to NEPA review at all would seem

unsustainable.

Fourth, even assuming that the planning documents were properly defined as 

categorically excluded from NEPA review, and the CEQ and Departmental regulations were the 

source for their designation as CEs, it follows that MMS was obligated by regulation to question 

whether any of the exceptions applied based on extraordinary circumstances.186 Without 

reproducing the list of exceptions, it does not seem clear that MMS seriously undertook the task 

of examining this list carefully. The notion that the largest oil spill in American history resulted 

from a blowout on a well that had been defined by the agency as exempt from NEPA because it 

is an action “which do[es] not have a significant effect on the human environment”187 indicates 

that the application of the CEQ definition was off-kilter and the exceptions were not sufficiently 

examined. The concern goes beyond after-the-fact logic. The exceptions to the application of a 

CE include actions which “[h]ave highly uncertain and potentially significant environmental 

effects or involve unique or unknown environmental risks.”188 The May 2000 Gulf of Mexico 

Deepwater Operations and Activities EA expressly discussed the potential for a deepwater spill 

and the length of time needed to control one (60-120 days); it concluded that “further 

investigation is needed” to evaluation the consequences of a deepwater blowout.189 Given the 

actual events after the blowout took place, it is clear that such investigation was never 

completed. How a deepwater EP escaped NEPA review under the exception to CEs is difficult 

to understand. 

B. Question 2—Consultation 

Since the blowout, much has been made of the fact that MMS did not fully appreciate or 

address comments of sister or local agencies in the NEPA process. Although MMS was not 

obligated to agree with other agencies’ comments, MMS was obligated to respond in the EISs to 

which the Macondo well approvals ultimately were tiered, and to “assess and consider comments 

. . . and respond” in one of the manners required in 40 C.F.R. § 1503.4. The question of whether 

MMS properly considered agency and public comments with respect to the lease sale EA should

be answered on a case-by-case basis to determine whether MMS considered comments to the 

extent practicable.190 In both cases, to the extent MMS addressed comments, its response was 

required to be well-reasoned, and could not be arbitrary. 

The basis for much of the concern regarding the adequacy of consultation and 

coordination stems, as with the concern for the adequacy of NEPA review at all, from the 

employment of CEs for the EPs and APDs for the Macondo well. MMS’s general regulations 

regarding planning documents are nonspecific as to the kind of NEPA review anticipated and do 

not clarify how consultation will occur, instead leaving that question of compliance with the 

CEQ and Departmental NEPA rules. In addition, the regulations call for documents in 

 186 43 C.F.R. § 46.205; 46.210; 46.215. 187 40 C.F.R. § 1508.4 188 43 C.F.R. § 46.215(d). Though MMS employed CEs for the EP, MMS’s operational regulations defined 

deepwater development as “non-conventional.” 30 C.F.R. § 250.286.

189 CEQ Report at Chapter II, pages 16-17. 

190 40 C.F.R. § 1501.4(b). 
- 32 -

association with DPPs and DOCDs that are not, by rule, provided to the public, and so, even with 

NEPA compliance, it is unclear what the public or local agencies may see in the context of 

NEPA review. It does seem, however, that, to the extent the agency considered the action to be 

categorically excluded from NEPA review, no NEPA compliance would take place at all that 

would effectuate consultation. Accordingly, the question of MMS’s compliance with 

consultation requirements in the context of CEs is strictly derivative. If the use of the CE was 

appropriate, then consultation in association with NEPA review is not at issue because there was 

no NEPA review. 

MMS regulations governing the planning documents presume the applicability of all 

relevant laws, including NEPA, and do not address the CEs for planning documents in the Gulf. 

They do not precisely duplicate NEPA regulations, either those prepared by CEQ or DOI. For 

example, with respect to environmental compliance, the regulations require the lessee to submit 

an environment impact analysis (EIA),191 for purposes of allowing MMS to “comply[] with the 

National Environmental Policy Act (NEPA) of 1969 and other relevant Federal laws.”192 With 

respect to consultation, the regulations address the lessee’s obligation to inform MMS of the 

lessee’s consulting history: “Your EIA must include a list of agencies and persons with whom 

you consulted, or with whom you will be consulting, regarding potential impacts associated with 

your proposed exploration activities.”193 The requirements for DPPs and DOCDs are the same. 

The lessee must submit an EIA for these planning documents,194 for purposes of allowing MMS 

to comply with, inter alia, NEPA.195 And, as with EPs, the regulations specify that the lessee 

must describe its own consultation activities with respect to DPPs or DOCDs.196 In addition, 

deepwater operators must submit a “deepwater operations plan” that “provides sufficient 

information for MMS to review a deepwater development project, and any other project that uses 

non-conventional production or completion technology.”197 The deepwater operations plan must 

be accompanied by a “Conceptual Plan” for the project.198 The regulations at 30 C.F.R. §

250.286 through 250.295 detail the requirements for these documents, but contain no 

requirements pertaining to notification of the public, consultation with local agencies, or 

compliance with NEPA. The deepwater operations plan and Conceptual Plan do not substitute 

for but do supplement the DPP or DOCD. Similarly, the lessee submitting a DPP or DOCD 

must also submit a conservation information document.

199 Once again, these regulations do not 

describe NEPA or consultation.

From these regulations, one must surmise that MMS, when preparing appropriate NEPA 

reviews for EPs and DPPs or DOCDs, will conduct appropriate consultation. Much information, 

however, is submitted in association with DPPs and DOCDs—with the deepwater operations 

plans and conservation information documents—that is not, by rule, publicized to interested 

parties, and thus would only be publicly available if provided in association with a properly-

 191 30 C.F.R. § 250.227.

192 30 C.F.R. § 250.227(a)(3). 

193 30 C.F.R. § 250.261(d). 194 30 C.F.R. § 250.261.

195 30 C.F.R. § 250.261(a)(3). 

196 30 C.F.R. § 250.261(d). 

197 30 C.F.R. § 250.286(a). 

198 30 C.F.R. § 250.286(b).

199 30 C.F.R. § 250.296-250.299. 
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prepared NEPA review document. If the DPP or DOCD is only considered as an EA, such 

information would be provided “to the extent practicable.” By contrast, material that is a part of 

the DPP or DOCD is subject to specific review and consultation provisions of the MMS 

operations rules.

This discussion of rules relating to planning documents, and associated NEPA review, is 

only of tangential interest in the Western Gulf, where the agency employs CEs for their approval. 

The MMS operations regulations are silent about CEs, or how their use affects MMS’s decisions 

with respect to consultation. In the preamble to the 2005 rulemaking, MMS explained that it 

might choose to limit the material the lessee would otherwise be required to submit if MMS 

decided that a plan approval is categorically excluded. In the case of a CE, “MMS may limit the 

information that the lessee/operator is required to submit unless the information is required for 

compliance with other Federal laws.”200 Accordingly, in the case of a CE, it is not entirely clear 

that MMS would even demand compliance with requirements of the operations rules related only 

to NEPA.

In conclusion, because consultation with respect to an EA or EIS is governed by NEPA 

rules promulgated by CEQ and the DOI, and is only necessary “to the extent practicable” for 

EAs, it is not at all clear what information is normally available to the public or to appropriate 

local agencies, how it is disseminated, or whether there is an opportunity to consult or comment 

in association with an EA prepared for a planning document. But in the Western Gulf of 

Mexico, where planning documents are categorically excluded by Departmental Manual, as 

indicated in Notices to Lessees, no NEPA consultation would take place at all, and MMS may, 

by Notice to Lessees, limit the information required to be submitted by the lessee.

C. Question 3—Reasonably Foreseeable Impacts 

The NEPA documents that sought to examine the risk of an oil spill considered the 

possibility of a blowout the size of the 2010 event to be so unforeseeable that these documents

did not address it. Although MMS did not examine a type of blowout of the nature that occurred 

as a “worst case scenario” in the relevant NEPA documents, BP apparently did look at a worst 

case discharge for the purpose of its Oil Spill Response Plan, which is an appendix to the EP.201 

In this document, BP addressed a potential spill of up to 300,000 barrels per day. Possibly 

because the EP to which the Oil Spill Response Plan was appended was identified as a CE, this 

projection was never included in any NEPA study by MMS. As a purely NEPA question, then, 

this paper asks whether sufficient information was available to justify a more detailed analysis by 

MMS of a large-scale oil spill in relevant NEPA analyses on grounds that such an impact was 

reasonably foreseeable.

 200 70 Fed. Reg. 51478 (Aug. 30, 2005). 201 See 30 C.F.R. § 250.213. This rule requires a lessee to append the following to its EP: “Blowout scenario. A 

scenario for the potential blowout of the proposed well in your EP that you expect will have the highest volume of 

liquid hydrocarbons. Include the estimated flow rate, total volume, and maximum duration of the potential blowout. 

Also, discuss the potential for the well to bridge over, the likelihood for surface intervention to stop the blowout, the 

availability of a rig to drill a relief well, and rig package constraints. Estimate the time it would take to drill a relief 

well.”
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Several factors undercut MMS’s decision to address potential spills in its NEPA 

documents (Programmatic EIS, Multi-Sale EIS, and Lease Sale 206 EA), all the while eschewing 

any discussion of a blowout of a significant nature before the blowout took place. To the extent 

such a discussion would be found to be legally required, the location of the discussion would 

have been in an EIS to which subsequent documents are tiered. Conversely, a FONSI for an EA, 

such as the Lease Sale 206 EA, may have been unwarranted if a spill of the size projected in the 

Oil Spill Response Plan had been addressed in an EA. If a blowout of this magnitude was 

reasonably foreseeable for purposes of the Oil Spill Response Plan, it is hard to imagine how 

such a spill would not be a reasonably foreseeable impact to be examined under NEPA.

202 MMS 

appears to have relied on geographic boundaries (in this case a geopolitical boundary) for 

classifying the foreseeability of impacts of the Ixtoc spill off the coast of Mexico in 1979. 

Whether a repeat event was reasonably foreseeable would depend on an explanation why what 

happened in 1979 could not happen again, or why it was too “speculative” or unduly remote.203 

This question is now academic. Whatever was true about what was reasonably 

foreseeable to consider by way of effects before the Macondo blowout, it would be arbitrary 

hereafter for MMS to undertake NEPA review without considering the sort of effects that 

resulted from the Macondo well blowout as reasonably foreseeable. The question of what is 

reasonably foreseeable has two components. What must the agency consider? And does it 

compel an EIS?204

 202 40 C.F.R. § 1508.8(b).

While it can be debated whether the likelihood of another blowout of the 

magnitude of the Deepwater Horizon spill is so small that an EIS is unnecessary, this might be a 

hard sell absent the inclusion of specific mitigation measures capable of reducing the risk below 

that necessary to trigger an EIS. Absent such mitigation, MMS will likely be required at some 

stage of its decision-making process to prepare an EIS of some nature that considers such effects, 

to which other NEPA documents may be tiered.

203 40 C.F.R. § 1502.22; Metropolitan Edison, 460 U.S. at 774-75. 204 Inland Empire Public Lands Council v. Schultz, 992 F.2d 977, 981 (9th Cir. 1988) (“Both connected actions and 

unrelated but reasonably foreseeable future actions may result in cumulative impacts that can trigger an EIS.”); Save 

the Yaak Comm. v. Block, 840 F.2d 714, 721 (9th Cir. 1988).