Permitting California Outer Continental Shelf Petroleum Development Projects
Authors: Pickford Kyle H. 
Published: December 2007

Permitting California Outer Continental Shelf (OCS) development activities is a costly, time-consuming, and complex process. Because both federal acreage and California state acreage are involved in offshore development and associated onshore facilities, both federal and state environmental and permitting requirements must be met. Literally years of review by numerous regulatory agencies are required before the project may proceed. Delays and expenses generated by the permitting process adversely proceed. Delays and expenses generated by the permitting process adversely affect project economics. The need for large amounts of technical information early in the process alters the normal evolution of project design. Finally, restrictions and constraints imposed by regulatory agencies affect all aspects of the project and ultimately determine project viability.

Introduction

California's populace consistently expresses a strong concern for protection of the environment. This concern manifests itself in the form of state and local laws designed to manage and to reduce the environmental effects of development of any kind, including oil development.

In the exploratory phase of lease operations resulting from Pacific OCS Lease Sales 68 and 53, permitting problems were minimal. This relative ease of permitting problems were minimal. This relative ease of permitting resulted because exploratory operations occurred almost exclusively on federal land; thus state agencies had limited influence regarding these activities. As exploration leads to discoveries, and ultimately to development, state and local governments enter the picture, vastly compounding permitting difficulties. permitting difficulties. The California OCS permitting process is continually evolving to accommodate public pressure and political realities. The level of time, effort, and expense required to permit an OCS development project, along with the restrictions accompanying such permits, is now viewed as a major constraint to OCS development in California waters. Current permitting procedures, along with some of the problems this process creates, are outlined.

ThePermitting Process

OCS development activities where onshore facilities are a part of the development require the approval of various federal, state, and local government authorities before the development project may proceed. Two separate but substantially similar laws govern the major portion of environmental review of OCS projects: the Natl. Environmental Policy Act (NEPA), which applies to the federal or OCS portion of the development; and the California Environmental Quality Act (CEQA), which governs development areas under the State of California's jurisdiction, including onshore and activities up to 3 miles [4.8 km] offshore. Both laws require that the government agency most directly responsible for regulating major development activities, the "lead agency," select an independent party to prepare an assessment of environmental impacts party to prepare an assessment of environmental impacts associated with the proposed project. NEPA refers to this assessment as an environmental impact statement (EIS), while CEQA calls the document an environmental impact report (EIR). Because OCS development includes both offshore (federal) and onshore (state) activities, both laws are triggered. In theory, two separate documents should be prepared by separate lead agencies; however, because all parties involved recognize the redundancy, interagency agreements have led to the creation of the Joint Review Panel (JRP) and the joint EIS/EIR. Panel (JRP) and the joint EIS/EIR. The JRP consists of representatives of the major permitting agencies involved in OCS development: the permitting agencies involved in OCS development: the Minerals Management Service (MMS), the State Lands Commission, the California Coastal Commission, and the county where the onshore activity (such as a processing facility) is proposed. The MMS acts as the NEPA lead agency, and the county acts as the CEQA lead agency; however, a single environmental review document, the EIS/EIR, is prepared to conform to the requirements of both laws. The JRP has control over the parameters of the environmental study and the adequacy of the produced document. Permitting authorities use this document to identify and to mitigate potential adverse environmental effects of the project, and ultimately to judge whether the project will be allowed to proceed. project will be allowed to proceed. Because OCS development activities tend to be proximate in both area (multilease-sized structures) and time proximate in both area (multilease-sized structures) and time (because most leases in a given area are usually sold in a single lease sale, exploration and production occur in a similar time period), the MMS has chosen to analyze all proposed and potential development activities in an area with a single "area-wide" document. This document has the advantage of considering potential cumulative impacts of all probable OCS development in a given area. An areawide EIS/EIR has been prepared for each of the last three major California OCS development areas-the southern, central, and northern Santa Maria basin areas.

JPT

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