99–006 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 112–108 

JOBS AND ENERGY PERMITTING ACT OF 2011 

JUNE 16, 2011.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. UPTON, from the Committee on Energy and Commerce, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 2021] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 2021) to amend the Clean Air Act regarding air pollution from Outer Continental Shelf activities, having considered the 

same, report favorably thereon without amendment and recommend that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for Legislation .................................................................... 2 

Hearings ................................................................................................................... 4 

Committee Consideration ........................................................................................ 4 

Committee Votes ...................................................................................................... 5 

Committee Oversight Findings ............................................................................... 12 

Statement of General Performance Goals and Objectives .................................... 12 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 12 

Earmarks .................................................................................................................. 12 

Committee Cost Estimate ....................................................................................... 12 

Congressional Budget Office Estimate ................................................................... 12 

Federal Mandates Statement ................................................................................. 13 

Advisory Committee Statement .............................................................................. 13 

Applicability to Legislative Branch ........................................................................ 13 

Section-by-Section Analysis of Legislation ............................................................ 13 

Changes in Existing Law Made by the Bill, as Reported ..................................... 14 

Dissenting Views ..................................................................................................... 17 


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PURPOSE AND SUMMARY

H.R. 2021, the ‘‘Jobs and Energy Permitting Act of 2011,’’ was introduced by Rep. Cory Gardner (together with Reps. Burgess, 

Green, Griffith, Kinzinger, McMorris Rogers, Olson, Pitts, Pompeo, 

Scalise, Shimkus, and Terry) on May 26, 2011. The legislation prevents lengthy and unnecessary air permitting delays of energy exploration in the Outer Continental Shelf (OCS). It achieves this by 

clarifying and modifying the relevant Clean Air Act (CAA) provisions as currently implemented by the Environmental Protection 

Agency (EPA). Key provisions of this bill: • Clarify that the air permitting provisions were designed to 

focus on air quality impacts onshore, and not at an offshore site. • Clarify when drilling equipment and vessels are to be regulated as stationary sources, and when they are regulated as mobile 

sources. • Create a deadline for final agency action by the EPA and clarify judicial review. 

BACKGROUND AND NEED FOR LEGISLATION

The nation faces high petroleum and motor fuels prices, continued instability and anti-American hostility among several oil exporting countries, unemployment in excess of nine percent, and a 

rapidly growing budget deficit. Increased domestic oil production 

could help address all of these concerns, but only if the federal government were to allow it. America’s untapped oil potential—in the 

Gulf of Mexico, the Pacific, the Atlantic, and numerous onshore locations—is substantial. Access to some of this oil is restricted outright, but even energy not explicitly off-limits is frequently subjected to onerous regulatory provisions that effectively make it so. 

Nowhere is the potential to expand American oil production—and 

the cost of not doing so—any greater than in the waters off Alaska’s North Slope. 

Congress has enacted numerous statutes designed to ensure that 

energy exploration and production is conducted in a manner protective of public health and the environment. However, in many instances reasonable laws have been interpreted unreasonably by 

federal agencies or environmental extremists so as to block the expansion of domestic drilling. This is especially the case with regard 

to the EPA in its implementation of air permitting provisions 

under section 328 of the CAA as applied to the Alaska OCS. 

EPA’S NARROWLY DEFINED ROLE IN THE OCS

Energy exploration in the OCS is extensively regulated by the 

Department of the Interior (DOI), other federal agencies, and 

impacted state and local governments. Congress added section 328 

to the CAA for the specific purpose of ensuring that attainment 

and maintenance of National Ambient Air Quality Standards 

(NAAQS)—the key public health standards in the law—are not affected by these activities. The CAA was never intended to empower 

EPA or environmental extremists to impose a backdoor drilling ban 

by precluding energy exploration that had already been approved 

by DOI and other agencies. 

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ed that ‘‘[i]n implementing, enforcing, and revising this rule and in 

delegating authority hereunder, the Administrator will ensure that 

there is a rational relationship to the attainment and maintenance 

of Federal and State ambient air quality standards and that requirements of Part C of Title I (the PSD program), and that the 

rule is not used for the purpose of preventing exploration and development of the OCS.’’ 

AN AGENCY OFF-COURSE FROM STATUTORY INTENT

Unfortunately, EPA and environmental extremists have strayed 

from the narrow public health intent of the law. For example, in 

deciding whether to grant an air permit, the agency has chosen to 

focus on offshore emissions rather than the onshore impact. However, it is onshore where the public resides (any on-site occupational concerns are addressed by other agencies such as OSHA) and 

thus is where compliance with the NAAQS is measured. In addition, environmental extremists have attempted to apply the 

lengthier stationary source requirements to the ships that come 

and go from the drilling ship. From a public health standpoint, 

there is little to be gained in doing so, as these vessels are already 

regulated as mobile sources. In both of these instances, the process 

is being complicated, and for reasons divorced from the legitimate 

public health purpose embodied in section 328. 

EPA has also increased permitting delays by creating additional 

layers of bureaucracy within the agency, namely through its Environmental Appeals Board (EAB). Although the EAB is part of EPA, 

the agency asserts that it is not responsible for EAB delays in 

granting usable permits that would allow exploration to proceed. 

Such intra-agency delays were never intended under section 328. 

The fact that section 328 is now being used to prevent exploration is clearly seen in the years-long history of Shell’s leases in 

the Alaska OCS. Unlike other parts of the OCS that are statutorily 

closed to leasing, DOI has issued leases to Shell Oil for the Beaufort and Chukchi Seas. Some of these leases date back to 2005, and 

Shell has complied with the many requirements imposed by DOI 

and others, including 35 permits. Yet, Shell has failed to obtain the 

necessary air permit from EPA, after five years of trying, and the 

project has been brought to a halt as a result. 

EPA’s heightened concern about Alaska’s air quality is out of 

place. The state has some of the nation’s most pristine air and is 

in attainment, by a wide margin, with all of the CAA’s NAAQS. In 

the context of the vast onshore and offshore expanses in the northern part of the state, where there are very few inhabitants and 

sources of emissions, it is not plausible to argue that transient 

emissions from offshore drilling activities pose so serious a threat 

that the requirements of section 328 still cannot be met. It should 

be noted that Alaska’s entire Congressional delegation, as well as 

its state government, testified in favor of granting the air permits 

and allowing Alaska OCS exploration to proceed. 

THE BENEFITS OF EXPLORING THE ALASKA OCS

Alaska’s OCS is estimated to contain 27 billion barrels of recoverable oil. According to testimony of Oliver Goldsmith of the University of Alaska Anchorage, pursuit of this energy could create an 

average of 35,000 permanent jobs in Alaska as well as 28,500 jobs 


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elsewhere. The potential royalty and tax revenues that would accrue to the federal government could reach well into the hundreds 

of billions of dollars. The state of Alaska’s share could be $17 billion over 50 years. 

HEARINGS

The Subcommittee on Energy and Power on April 13, 2011 held 

a legislative hearing on a discussion draft of the ‘‘Energy and Jobs 

Permitting Act of 2011’’ and received testimony from: 

• The Honorable Lisa Murkowski, U.S. Senator, Ranking 

Member, Committee on Energy and Natural Resources 

• The Honorable Mark Begich, U.S. Senator 

• The Honorable Don Young, Member of Congress 

• The Honorable Dan Sullivan, Commissioner, Alaska Department of Natural Resources 

• Dr. Scott Goldsmith, Ph.D., Professor, Institute for Social 

and Economic Studies, University of Alaska Anchorage 

• Mr. Richard Glenn, Executive Vice President, Arctic Slope 

Regional Corporation 

• Mr. David Lawrence, Executive Vice President, Exploration and Commercial, Shell 

• Mr. Robert Meyers, Senior Counsel, Crowell & Moring, 

LLP 

• Ms. Rosemary Ahtuangaruak, Former Mayor, Nuiqsut, 

Alaska and 

• Mr. Erik Grafe, Staff Attorney, Earthjustice 

The Subcommittee on Energy and Power on May 13, 2011 held 

a second legislative hearing on the discussion draft of the ‘‘Energy 

and Jobs Permitting Act of 2011’’ and received testimony from: 

• Ms. Gina McCarthy, Assistant Administrator, Office of Air 

and Radiation, U.S. Environmental Protection Agency 

• Mr. Lynn Westfall, Executive Vice President, Turner, 

Mason & Company 

• Mr. Ali Mirzakhalili, Director, Division of Air Quality, 

Delaware Department of Natural Resources and Environmental Control 

• Mr. Brian T. Turner, Assistant Executive Officer for Federal Climate Policy, California Air Resources Board, and 

• Mr. Robert Meyers, Senior Counsel, Crowell & Moring, 

LLP. 

COMMITTEE CONSIDERATION

On April 6, 2011, Representative Gardner released a discussion 

draft of the ‘‘Jobs and Energy Permitting Act of 2011’’ (‘‘JEPA’’). 

On May 24, 2011, the Subcommittee on Energy and Power reported JEPA and favorably recommended it to the full committee 

by a voice vote. During the markup, three amendments were offered, of which none were adopted. 

On May 26, 2011, Mr. Gardner and Mr. Green, together with 

other members, introduced JEPA, with amendment, as H.R. 2021. 

On June 1, 2011 and June 2, 2011, the Committee on Energy 

and Commerce met in open markup session. During the markup, 

five amendments were offered, of which none were adopted. On 


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June 2, 2011, the Committee ordered H.R. 2021 favorably reported 

to the House. 

COMMITTEE VOTES

Clause 3(b) of rule XII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A motion by Mr. 

Upton to order H.R. 2021 reported to the House, as amended, was 

agreed to by a record vote of 34 yeas and 14 nays. The following 

reflects the recorded votes taken during the Committee consideration, including the names of those Members voting for and 

against. 


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COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee made findings that are reflected 

in this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

H.R. 2021 amends the Clean Air Act regarding air pollution from 

Outer Continental Shelf activities. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H.R. 2021, the 

Jobs and Energy Permitting Act of 2011, would result in no new 

or increased budget authority, entitlement authority, or tax expenditures or revenues. 

EARMARKS

In compliance with clause 9(e), 9(f), and 9(g) of rule XXI, the 

Committee finds that H.R. 2021, the Jobs and Energy Permitting 

Act of 2011, contains no earmarks, limited tax benefits, or limited 

tariff benefits. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

JUNE 8, 2011. 

Hon. FRED UPTON, 

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 2021, the Jobs and Energy Permitting Act of 2011. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susanne S. Mehlman. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

H.R. 2021—Jobs and Energy Permitting Act of 2011 

H.R. 2021 would make several amendments to the Clean Air Act 

related to air pollution stemming from oil exploration in the Outer 

Continental Shelf (OCS). Those amendments include specifying 

that air emission impacts are to be measured onshore and clariVerDate Mar 15 2010 05:19 Jun 17, 2011 Jkt 099006 PO 00000 Frm 00012 Fmt 6659 Sfmt 6602 E:\HR\OC\HR108.XXX HR108

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fying that any drilling vessel must be regulated as a stationary 

source once drilling starts. (A stationary source is a fixed-site producer of air pollution that is regulated by the Clean Air Act.) In 

addition, H.R. 2021 would clarify that the Environmental Appeals 

Board of the Environmental Protection Agency (EPA) does not have 

the authority to consider permits for OCS exploration; rather, 

under the bill EPA would be required to take final action related 

to granting or denying a permit within six months after a completed application is filed. 

Based on information from EPA, CBO expects that implementing 

this legislation would have no significant impact on the federal 

budget. Pay-as-you-go procedures do not apply because the bill 

would not affect direct spending or revenues. 

H.R. 2021 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 

The CBO staff contact for this estimate is Susanne S. Mehlman. 

This estimate was approved by Theresa Gullo, Deputy Assistant 

Director for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF LEGISLATION

Section 1: Short title 

Section 1 provides the short title for the legislation, the ‘‘Jobs 

and Energy Permitting Act of 2011.’’ 

Section 2: Air Quality Measurement 

Section 2 amends section 328(a)(1) of the Clean Air Act (‘‘CAA’’) 

to clarify that the air quality impacts of any Outer Continental 

Shelf source (‘‘OCS Source’’) are to be measured solely with respect 

to the impacts in the corresponding onshore area. 

Section 3: OCS Source 

Section 3 amends section 328(a)(4)(C) of the CAA to clarify that 

while the emissions from any vessel servicing or associated with an 

OCS Source are to be considered direct emissions from such source, 

such vessels are not subject to emissions control requirements 

under the CAA’s Prevention of Significant Deterioration of Air 

Quality Program. Also, section 3 makes clear that an OCS Source 


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is established at the time when drilling commences and ceases to 

exist when drilling activity ends. 

Section 4: Permits 

Section 4 amends section 328 of the CAA by adding a new subsection that requires final agency action be taken on platform or 

drill ship exploration OCS Source permits no later than 6 months 

after a completed application is filed, with no administrative stay 

of the permit after such time period. In addition, the new subsection states expressly that the Environmental Appeals Board of 

the Environmental Protection Agency does not have authority to 

consider platform or drill ship exploration OCS Source permits. 

Final agency action is to be considered nationally applicable under 

section 307(b) of the CAA without additional administrative review 

except for reconsideration filed by the applicant under section 

307(d)(7)(B) of the CAA. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

CLEAN AIR ACT 

* * * * * * * 

TITLE III—GENERAL 

* * * * * * * 

SEC. 328. AIR POLLUTION FROM OUTER CONTINENTAL SHELF ACTIVITIES. 

(a)(1) APPLICABLE REQUIREMENTS FOR CERTAIN AREAS.—Not 

later than 12 months after the enactment of the Clean Air Act 

Amendments of 1990, following consultation with the Secretary of 

the Interior and the Commandant of the United States Coast 

Guard, the Administrator, by rule, shall establish requirements to 

control air pollution from Outer Continental Shelf sources located 

offshore of the States along the Pacific, Arctic and Atlantic Coasts, 

and along the United States Gulf Coast off the State of Florida 

eastward of longitude 87 degrees and 30 minutes (‘‘OCS sources’’) 

to attain and maintain Federal and State ambient air quality 

standards and to comply with the provisions of part C of title I. For 

such sources located within 25 miles of the seaward boundary of 

such States, such requirements shall be the same as would be applicable if the source were located in the corresponding onshore 

area, and shall include, but not be limited to, State and local requirements for emission controls, emission limitations, offsets, permitting, monitoring, testing, and reporting, except that any air 

quality impact of any OCS source shall be measured or modeled, as 

appropriate, and determined solely with respect to the impacts in 

the corresponding onshore area. New OCS sources shall comply 

with such requirements on the date of promulgation and existing 

OCS sources shall comply on the date 24 months thereafter. The 

Administrator shall update such requirements as necessary to 


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maintain consistency with onshore regulations. The authority of 

this subsection shall supersede section 5(a)(8) of the Outer Continental Shelf Lands Act but shall not repeal or modify any other 

Federal, State, or local authorities with respect to air quality. Each 

requirement established under this section shall be treated, for 

purposes of sections 113, 114, 116, 120, and 304, as a standard 

under section 111 and a violation of any such requirement shall be 

considered a violation of section 111(e). 

* * * * * * * 

(4) DEFINITIONS.—øFor purposes of subsections (a) and (b)¿ For 

purposes of subsections (a), (b), and (d)— 

(A) * * * 

* * * * * * * 

(C) OUTER CONTINENTAL SHELF SOURCE.—The terms ‘‘Outer 

Continental Shelf source’’ and ‘‘OCS source’’ include any equipment, activity, or facility which— 

(i) * * * 

* * * * * * * 

Such activities include, but are not limited to, platform and 

drill ship exploration, construction, development, production, 

processing, and transportation. For purposes of this subsection, 

emissions from any vessel servicing or associated with an OCS 

source, including emissions while at the OCS source or en 

route to or from the OCS source within 25 miles of the OCS 

source, øshall be considered direct emissions from the OCS 

source¿ shall be considered direct emissions from the OCS 

source but shall not be subject to any emission control requirement applicable to the source under subpart 1 of part C of title 

I of this Act. For platform or drill ship exploration, an OCS 

source is established at the point in time when drilling commences at a location and ceases to exist when drilling activity 

ends at such location or is temporarily interrupted because the 

platform or drill ship relocates for weather or other reasons. 

* * * * * * * 

(d) PERMIT APPLICATION.—In the case of a completed application 

for a permit under this Act for platform or drill ship exploration for 

an OCS source— 

(1) final agency action (including any reconsideration of the 

issuance or denial of such permit) shall be taken not later than 

6 months after the date of filing such completed application; 

(2) the Environmental Appeals Board of the Environmental 

Protection Agency shall have no authority to consider any matter regarding the consideration, issuance, or denial of such permit; 

(3) no administrative stay of the effectiveness of such permit 

may extend beyond the date that is 6 months after the date of 

filing such completed application; 

(4) such final agency action shall be considered to be nationally applicable under section 307(b); and 


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(5) judicial review of such final agency action shall be available only in accordance with such section 307(b) without additional administrative review or adjudication. 

* * * * * * * 


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1Testimony of Brian Turner, California Air Resources Board, before the Subcommittee on Energy and Power, Committee on Energy and Commerce, Hearing on the American Energy Initiative: Discussion Draft of H.R. ll, the Jobs and Energy Permitting Act of 2011, 112th Cong. 

(May 13, 2011) (hereinafter ‘‘CARB Testimony’’). 2Testimony of Ali Mirzakhalili, Director, Office of Air Quality, Delaware Department of Natural Resources and Environmental Control, before the Subcommittee on Energy and Power, 

Committee on Energy and Commerce, Hearing on the American Energy Initiative: Discussion 

Draft of H.R. ll, the Jobs and Energy Permitting Act of 2011, 112th Cong. (May 13, 2011) 

(hereinafter ‘‘Delaware Testimony’’). 3See, e.g., Committee on Energy and Commerce, Subcommittee on Energy and Power, The 

American Energy Initiative: H.R. ll, the Jobs and Energy Permitting Act of 2011, 112th Cong. 

(May 13, 2011). 

DISSENTING VIEWS ON H.R. 2021 

Under Section 328 of the Clean Air Act, companies that want to 

conduct new exploratory drilling operations in the U.S. Outer Continental Shelf (OCS) must obtain permits under the Clean Air Act 

prevention of significant deterioration (PSD) program if the operations will emit more than 250 tons of an air pollutant. The ‘‘Jobs 

and Energy Permitting Act of 2011,’’ as reported by the Committee 

on Energy and Commerce, would make several changes to how 

EPA and state authorities operating delegated programs can issue 

PSD permits for offshore exploratory drilling operations and restrict how concerned stakeholders can challenge those permits. 

This bill was drafted to facilitate the permitting process for Shell 

in the Arctic waters off the coast of Alaska. The bill, however, 

would affect the regulatory structure relating to more than 20 

states and territories and could affect air quality in coastal states 

other than Alaska. Representatives of the states of California and 

Delaware testified to their concerns about the potential impact of 

this bill within their borders. Brian Turner from the California Air 

Resources Board testified that the bill ‘‘could have far-reaching unintended consequences on existing effective protections for public 

health in California.’’ 1 Ali Mirzakhalili from the Delaware Department of Natural Resources and Environmental Control’s Office of 

Air Quality stated that the ‘‘proposed constraints placed on states’’ 

rights and authorities will adversely affect our state’s ability to 

protect public health and welfare from harmful effects of air pollution.’’ 2

I. PURPOSE OF H.R. 2021 

This bill’s supporters have stated that Shell has tried for five 

years to obtain the necessary air permits from EPA for its proposed 

Arctic drilling operation. Congressman Gardner, the bill’s lead 

sponsor, and others have cited this five-year delay as a justification 

for the proposed legislation.3

However, on May 13, 2011, EPA Assistant Administrator Gina 

McCarthy testified before the Subcommittee on Energy and Power 

about the legislation. She noted in response to questions that 

‘‘every time Shell has applied for a permit, a permit has been 


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4Testimony of Regina McCarthy, Assistant Administrator for Air and Radiation, U.S. Environmental Protection Agency, before the Subcommittee on Energy and Power, Committee on Energy and Commerce, 112th Cong. (May 13, 2011) (hereinafter ‘‘McCarthy Testimony’’). 5Letter from Assistant Administrator Gina McCarthy, U.S. EPA, to Ranking Member Henry 

A. Waxman (June 1, 2011). 

issued by the agency within 3 to 6 months of that permit application being complete.’’ She also noted that Shell ‘‘has consistently revised the request, changed the project, changed what sea they want 

to drill in.’’ 4

Hearing that testimony, Ranking Member Waxman and Ranking 

Member Rush wrote to Assistant Administrator McCarthy and 

asked her to document the timeline surrounding Shell’s application 

for a Clean Air Act permit in the Arctic. Her response demonstrates the following and casts doubt on the need for this legislation: 5

• EPA has finalized Shell’s permits quickly. The two Shell permits at issue—major source permits for the Discoverer drillship in 

the Chukchi and Beaufort Seas—were proposed and finalized within 3–4 months of receiving completed applications. Both went from 

submission of a completed application to a decision by the Environmental Appeals Board within approximately one year. 

• Shell pulled its application to drill with the Discoverer in the 

Beaufort Sea for two years. Shell first proposed drilling with the 

Discoverer in the Beaufort Sea in December 2006 but decided to 

defer action on this application in late 2007. Shell did not file a 

new permit application to use this drillship in the Beaufort Sea 

until January 18, 2010. EPA finalized this permit shortly thereafter on April 9, 2010. 

• Shell delayed final agency action on a permit for the Discoverer 

in the Chukchi Sea by submitting insufficient permit applications. 

Shell initially filed a permit application for the Discoverer in the 

Chukchi Sea in December 2008 but had to re-file the application 

in September 2009 when data showed that the operation would violate air quality standards for fine particles. This new permit application was both incomplete and requested substantial changes to 

the company’s operations. Shell did not provide all necessary information until the end of December 2009. EPA finalized the permit 

shortly thereafter on March 31, 2010. 

For these and other reasons outlined in EPA’s response, it is misleading to suggest that Shell submitted an application to drill in 

the Beaufort and Chukchi Seas five years ago and has been waiting 

ever since. Rather, Shell has apparently pulled applications, modified its proposed operations, and changed its target drilling sites on 

numerous occasions in this time period. Every time Shell changed 

its plans, EPA had to adjust its assessment of the potential impacts 

on air quality and public health. 

These facts cast doubt on the stated purpose of and need for the 

proposed legislation. 

II. SECTION-BY-SECTION ANALYSIS

A. SECTION 2: AIR QUALITY MEASUREMENT

Section 2 amends section 328(a)(1) of the Clean Air Act to clarify 

that the air quality impacts of any Outer Continental Shelf source 


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6 CARB Testimony. 

7McCarthy Testimony. 

8 Ali Mirzakhalili, Director, Office of Air Quality, Delaware Department of Natural Resources 

and Environmental Control, responding to Ranking Member Henry Waxman’s Questions for the 

Record (June 15, 2011). 9 CARB Testimony. 

10Testimony of Regina McCarthy, Assistant Administrator for Air and Radiation, U.S. Environmental Protection Agency, before the Subcommittee on Energy and Power, Committee on Energy and Commerce, 112th Cong. (May 13, 2011). 

(‘‘OCS source’’) are to be measured solely with respect to the impacts in the corresponding onshore area. 

This new language would allow a drillship, for example, to emit 

pollution at relatively high levels, while the need for pollution controls would be determined based only on the diluted quantity of 

pollution assumed to reach the shore. This language removes air 

quality protections for near-shore areas that have extensive human 

activity. For example, in Alaska, native populations spend significant time offshore engaging in subsistence whaling and fishing, 

and the Santa Barbara Channel is full of recreational boaters and 

fishermen. As the California Air Resources Board stated in testimony before the Subcommittee, this ‘‘procedural change does not 

remove any of the pollution from actually reaching California and 

the associated decrement to our ambient air quality, but it does remove the Districts’ ability to protect recreational, fishing, and other 

ocean users from OCS emissions.’’ 6 EPA also noted in testimony 

that ‘‘not requiring compliance with health-based air quality standards at any point off the shore line . . . could result in significant 

human exposure to air pollution from OCS sources, including nitrogen dioxide, particles, sulfur dioxide, and pollution that causes 

ozone.’’ 7

In his response to questions for the record, Ali Mirzakhalili of the 

Delaware Department of Natural Resources noted that measuring 

impacts at the ‘‘corresponding onshore area’’ could be particularly 

confusing along the Atlantic coast, where numerous states lay in 

close proximity. He stated that an OCS source off the coast of Delaware could have the greatest air quality impact in New Jersey or 

Maryland, but, as written, the bill could prevent these affected 

states from requiring emissions controls.8

Section 2 also has the effect of applying more lenient standards 

to offshore sources than onshore sources. In issuing its permits to 

Shell, EPA Region 10 required Shell to show compliance with ambient air quality standards at the rail of the drillship. This is consistent with how EPA permits onshore facilities, which have to 

demonstrate compliance at the fenceline. The California Air Resources Board testified that when ‘‘the rules for OCS sources are 

more lenient that those within the State, California’s experience is 

that the tension between better-controlled onshore industry and 

stakeholders and the more lax federal OCS regulation will lead to 

increased disputes, project delays and expense, and permit denials.’’ 9 Similarly, EPA noted that if OCS sources are not required 

to use pollution controls, ‘‘any resulting degradation of air quality 

could result in the need for more stringent controls for onshore 

sources.’’ 10

EPA disagrees that the statute, legislative history, and rulemaking record establish that OCS sources only have to comply with 

the NAAQS and PSD increments onshore. EPA stated the following 


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11 ‘‘U.S. EPA, Region 10, Response to Comments for Outer Continental Shelf PSD Permit No. 

R10OCS/PSD–AK–09–01 (Mar. 31, 2010). 12 40 C.F.R. § 55.2. 13 CARB Testimony. 14Delaware Testimony. 

in response to an assertion that EPA erroneously required Shell to 

demonstrate the air quality impact of its operations at the rail of 

the drillship rather than solely onshore: 11

While EPA agrees that the legislative history evidences Congress’ concern for protection of onshore air quality, the actual 

enacted statutory language never uses the term ‘‘onshore’’ but 

rather simply requires EPA to promulgate regulations to attain 

and maintain ambient standards and comply with the provisions of Part C of Title I of the CAA (the provisions for prevention of significant deterioration of air quality). Nothing in the 

statute precludes or limits EPA’s discretion in how it structures the required regulations to comply with the statutory directive. EPA believes that it has the authority to adopt regulations, and has adopted regulations, that require compliance 

with the NAAQS and increments at all locations, both offshore 

and onshore. 

B. SECTION 3: OCS SOURCE

Section 3 makes two significant changes to how Clean Air Act 

Section 328 applies to offshore drilling operations. 

1. Definition of OCS Source 

Under current law, an ‘‘OCS source’’ includes vessels that are 

‘‘permanently or temporarily attached to the seabed and erected 

thereon and used for the purposes of exploring, developing or producing resources therefrom’’ or ‘‘physically attached to an OCS facility.’’ 12

Section 3 of the bill amends section 328 of the CAA to specify 

that an OCS source is established at the time when drilling commences and ceases to exist when drilling activity ends. The California Air Resources Board testified that changing the definition of 

OCS source could ‘‘artificially limit’’ the timeframe for considering 

emissions from a project and could ‘‘result in some entire projects 

falling beneath regulatory applicability thresholds, thus avoiding 

control requirements and significantly increasing air pollution.’’ 13

The Delaware Department of Natural Resources and Environmental Control testified that it is a ‘‘misconception that sources that 

operate for a short duration of time do not significantly affect air 

quality,’’ noting that ‘‘uncontrolled sources operating for a single 

day can cause or contribute to exceedances of health based air 

quality standards.’’ 14

2. Application of Emissions Controls to Support Vessels 

In addition, the bill specifies that vessels servicing or associated 

with a drillship or drilling platform, such as ice breakers and the 

oil spill response vessels, would not be subject to best available control technology (BACT) emission reduction requirements or other 

requirements adopted under the PSD program. The applicant 

would have to factor in the emissions from the associated vessels 


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15 U.S. EPA Region 10, Statement of Basis for Proposed Outer Continental Shelf Prevention 

of Significant Deterioration, Permit No. R10OCS/PSD–AK–09–01, Appendix A (Jan. 8, 2010). 16 U.S. EPA Region 10, Statement of Basis for Proposed Outer Continental Shelf Prevention 

of Significant Deterioration, Permit No. R10OCS/PSD–AK–2010–01, Appendix A (Feb. 17, 2010). 17See supra notes 15 and 16. 18 CARB Testimony. 19 Ali Mirzakhalili, Director, Office of Air Quality, Delaware Department of Natural Resources 

and Environmental Control, responding to Ranking Member Henry Waxman’s Questions for the 

Record (June 15, 2011). 20 California Air Resources Board, Regulations to Reduce Emissions from Diesel Engines on 

Commercial Harbor Craft Operated Within California Waters and 24 Nautical Miles of the California Baseline (Oct. 20, 2008) (online at www.arb.ca.gov/regact/2007/chc07/chc07.htm). 21 CARB Testimony. 

when determining whether the drilling operation is subject to the 

PSD program and if it meets state and national air quality standards. The permitting authority, however, could not require the applicant to apply BACT to reduce pollution from these vessels. 

These associated vessels often comprise the bulk of a drilling operation’s pollution. For example, Shell’s proposed Arctic operations 

include two ice breakers, an oil spill response fleet of four or five 

vessels, and a supply ship. Shell estimated that its Chukchi operations would emit 1,188 tons per year of nitrogen oxides; 15 Shell’s 

Beaufort operations would emit an estimated 1,371 tons per year 

of nitrogen oxides.16 The associated vessels would contribute 96% 

of the total emissions from these drilling operations.17

The California Air Resources Board is concerned that this language could exempt many non-motive engines from emissions controls. For example, crane engines on marine vessels are regulated 

as stationary engines under Santa Barbara County Air Pollution 

Control District Rule 333 and the CARB Stationary Internal Combustion Engine Air Toxics Control Measure. Such engines are subject to permit requirements under PSD and are therefore subject 

to BACT if their potential to emit exceeds certain thresholds.18

This bill could prevent states and localities from applying such 

emission control standards on vessels servicing a drilling operation. 

In his response to questions for the record, Ali Mirzakhalili of the 

Delaware Department of Natural Resources wrote that excluding 

these vessels from emissions controls ‘‘could force a state like Delaware to meet its air quality obligations by offsetting the vessel’s 

emissions on the backs of its already tightly regulated stationary 

sources. This will have an adverse and unfair economic impact on 

Delaware and other coastal states.’’ 19

This language also could bar the application of other rules adopted under subpart 1 of part C of Title I of the Clean Air Act. For 

example, the California Air Resources Board has promulgated a 

harbor craft rule that is designed to help coastal areas come into 

attainment with the ozone and particulate matter air quality 

standards.20 The bill could prevent California’s air quality districts 

from incorporating CARB’s statewide maritime rules, such as the 

commercial harbor craft and ocean-going vessel regulations, into 

PSD permits.21

The bill’s supporters have stated that Title II is adequate to control emissions from these sources. During Subcommittee hearings 

on this bill, one of the witnesses, Robert Meyers, noted that vessels 

servicing the OCS source—such as supply ships and ice breakers— 

are regulated under Title II of the Clean Air Act and therefore require no additional emissions controls as part of the OCS source. 


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22Letter from Assistant Administrator Gina McCarthy, U.S. EPA, to Ranking Member Henry 

A. Waxman (June 1, 2011). 

Ranking Member Waxman and Ranking Member Rush wrote to 

Assistant Administrator McCarthy and asked her to clarify how 

Title II applies to the permitting of OCS drilling activities. She 

stated the following in her written response: 22

While it is true that Title II regulations apply to certain vessels which may be used in OCS activities, it is not an accurate 

representation to say that, in the absence of the OCS permitting process, these vessels would still be regulated under the 

Clean Air Act. The OCS permitting process for Shell’s operations has resulted in permit requirements for the support and 

service vessels that are, in some instances, more protective of 

public health than EPA can require under Title II of the Clean 

Air Act. 

Shell’s operations include support and service vessels, such 

as icebreakers, that have not been regulated under Title II of 

the Clean Air Act. Many of the large vessels, such as icebreakers, are foreign-flagged vessels. Title II engine requirements/regulations do not apply to foreign-flagged vessels. Instead, as part of our comprehensive marine program, we have 

relied on similar MarPol Annex VI engine standards through 

the International Maritime Organization (IMO). Those standards, like our Title II CAA standards, apply primarily to new 

vessels. . . . 

Shell’s actions in response to the [Environmental Appeals 

Board’s] remand of the Discoverer permits are illustrative of 

the additional environmental protection provided by the OCS 

permit process compared to Title II. Since the remand, Shell 

has agreed to add controls to one icebreaker to reduce both 

NOX and PM2.5 emissions. These additional controls will reduce NOX emissions from the icebreaker by 96% and PM2.5 

emissions by 82%. Additional restrictions requested by Shell 

for emissions from the Discoverer and other support vessels 

will further reduce all emissions from the project (for example, 

total NOX emissions will be reduced by 72%). 

As a result of the OCS permitting process, Shell is using 

cleaner fuel than is required under Title II of the Clean Air Act 

or international law. When the Discoverer drill ship is an OCS 

source, the permit requires all of the engines on the Discoverer 

and all of the engines on the service and support vessels to use 

diesel fuel that contains no more than 15 ppm sulfur. Absent 

the OCS permit process, vessels in the Arctic using diesel fuel 

bought outside the United States legally could have fuel sulfur 

levels as high as 35,000 ppm until 2020 and 5,000 ppm thereafter under international law. Absent the OCS permit process, 

for vessels that buy diesel in the United States, the fuel could 

contain up to 500 ppm sulfur until 2014, at which time it can 

contain no more than 15 ppm. 

Essentially, Title II alone may not be adequate to achieve necessary emissions reductions from the vessels servicing and associated with offshore drilling operations. 


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23McCarthy Testimony. 24 Id. 25Delaware Testimony. 26 Briefing by the Santa Barbara County Air Pollution Control District and South Coast Air 

Quality Management District to Energy and Commerce Committee Democratic Staff (Apr. 11, 

2011). 

C. SECTION 4: PERMITS

Section 4 of the bill would make significant changes to the process for reviewing and permitting offshore exploratory drilling operations. 

1. Six Month Deadline for Final Agency Action 

Section 4 requires final agency action be taken on platform or 

drill ship exploration OCS source permits no later than six months 

after a completed application is filed, with no administrative stay 

of the permit after such time period. 

Responding to questions before the Subcommittee, Assistant Administrator Gina McCarthy stated that ‘‘it is not possible’’ for EPA 

to evaluate a permit application, set source-specific air pollution 

limits, allow for public comment, and provide for administrative review within a six-month timeframe.23 Given these time constraints, 

Ms. McCarthy stated that the agency could issue a permit without 

adequate support, thereby reducing the permit’s defensibility in 

court and increasing the likelihood that EPA and the applicant will 

have to ‘‘start again at square one.’’ 24 This short timeline also 

would limit public participation. Currently, EPA generally provides 

30 to 60 days for public comment on a proposed permit action, depending on the complexity of the issues and the degree of public 

interest. The timing required by the proposed legislation would effectively preclude providing any more than 30 days for public comments. 

While this provision does not bar review of state permit decisions 

by state or local hearing boards, the six-month deadline may effectively limit or eliminate such administrative appeals at the state 

level as well. In Delaware, the state generally issues stationary 

source permits within six months of filing of a complete application, but review times vary based on the complexity of the pollution 

source. According to the Delaware Department of Natural Resources and Environmental Control, this six-month timeframe does 

not guarantee adequate time for permit drafting, review with 

sources, public participation, and administrative review.25 Administrative appeals of California permits are brought to the local air 

pollution district’s hearing board, which typically hears and resolves appeals within 30 days or a few months, depending on the 

district and complexity of the application.26 In addition, for state 

authorities operating delegated programs, this timing may be too 

short to allow compliance with state mandates, such as the California Environmental Quality Act. 

2. Administrative and Judicial Review 

Since 1980, permit applicants and others have been allowed to 

appeal a permit decision administratively within EPA, prior to any 

judicial review. This promotes consistency across the national permitting program and provides a faster and more affordable alterVerDate Mar 15 2010 05:19 Jun 17, 2011 Jkt 099006 PO 00000 Frm 00023 Fmt 6604 Sfmt 6602 E:\HR\OC\HR108.XXX HR108

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27 U.S. EPA, Changes to Regulations to Reflect the Role of the New Environmental Appeals 

Board in Agency Adjudications: Final Rule, 57 Fed. Reg. 5320 (Feb. 13, 1992). 28McCarthy Testimony. 29 Id. 30 Id. 31 Id. 32 Id. 

native to litigation. In 1992, President George H.W. Bush Administration’s EPA established the Environmental Appeals Board (the 

Board) to hear all administrative appeals to EPA. This replaced the 

prior approach of making administrative appeals directly to the Administrator.27

Section 4 states expressly that the Environmental Appeals Board 

does not have authority to consider platform or drill ship exploration OCS source permits. This would prevent stakeholders with 

concerns about a Clean Air Act permit for an OCS source from 

raising those concerns before the Board, which has 20 years of experience in the highly technical area of PSD permitting. The Board 

also is more accessible to citizens than a court of law. Under current law, if a community of subsistence fisherman in Alaska wanted to appeal a permit decision before the Board, they could do so 

without hiring a lawyer, and they could attend oral arguments via 

video conference. 

During her testimony before the Subcommittee, Assistant Administrator Gina McCarthy described other benefits of the Environmental Appeals Board. She stated that the Board’s review process 

‘‘expedites the process of obtaining a final, valid permit by facilitating a process that is faster and more certain for the applicant 

in the event of an appeal.’’ 28 She clarified that rather than adding 

an extra step that prolongs the permit process, the Board ‘‘usually 

serves as a cheaper, faster, more expert substitute for judicial review.’’ 29 On average, the Board decides PSD appeals in just over 

five months from the filing of the appeal, much faster than judicial 

cases are resolved.30 Furthermore, according to Ms. McCarthy, in 

almost all cases, the ‘‘Board’s decision resolves the disputes and 

concludes litigation, avoiding protracted federal court review.’’ 31

Since 1992, only four of the Board’s PSD permit decisions have 

been reviewed by a federal court, and no Board PSD decision has 

ever been overturned.32

Section 4 also specifies that final agency action is to be considered nationally applicable under section 307(b) of the Clean Air 

Act. This would direct all permit challenges directly to the DC Circuit Court of Appeals, rather than following long-standing rules 

and practice on judicial venue, which direct litigation to the appropriate regional court of appeals. 

The shift of judicial venue from the appropriate regional court of 

appeals to the DC Circuit Court of Appeals would require stakeholders with concerns about the purely local air quality impacts of 

a permit decision to come to Washington, DC to raise those concerns. California state courts would no longer have jurisdiction over 

judicial appeals to air quality permits issued by local agencies. The 

California Air Resources Board testified that forcing ‘‘cash-strapped 

state and local governments to travel 3,000 miles to defend their 

federally-delegated permitting decisions is a serious unfunded federal imposition. It impairs the ability of these governments to conVerDate Mar 15 2010 05:19 Jun 17, 2011 Jkt 099006 PO 00000 Frm 00024 Fmt 6604 Sfmt 6602 E:\HR\OC\HR108.XXX HR108

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33 CARB Testimony. 

duct the people’s business, increases the burden on taxpayers, and 

takes precious resources from other pressing priorities.’’ 33

For the reasons stated above, we dissent from the views contained in the Committee’s report. 

HENRY A. WAXMAN, 

Ranking Member. 

JAN SCHAKOWSKY. 

BOBBY L. RUSH. 

EDWARD J. MARKEY. 

TAMMY BALDWIN. 

ANNA G. ESHOO. 

JOHN D. DINGELL. 

DIANA DEGETTE. 

EDOLPHUS TOWNS. 

LOIS CAPPS. 

MIKE DOYLE. 

DORIS O. MATSUI. 

FRANK PALLONE, JR. 

Æ 


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