Controlling Air Emissions from Outer Continental Shelf Sources: A Comparison of Two Programs—EPA and DOI
Released: 2012-11-26T00:00:00

Introduction

The same group of air pollutant emissions from outer continental shelf (OCS) operations are subject to different regulatory programs, depending on the location of the operation. The Department of the Interior (DOI) has jurisdiction over OCS sources in federal waters in the western Gulf of Mexico and most of the central Gulf. The Consolidated Appropriations Act, 2012 ( P.L. 112-74 ), transferred air emission authority in the OCS off Alaska's north coast from the Environmental Protection Agency (EPA) to DOI. EPA has jurisdiction over sources in all other federal waters.

Congress established the programs through different statutes, and the two agencies implement the programs through separate regulations. Pursuant to the underlying statutes, the regulations have different scopes, emission thresholds for eligibility, and compliance obligations.

Therefore, two identical operations, located in separate jurisdictions, could face considerably different requirements and procedural time frames. Some may criticize this arrangement for its inconsistent treatment of air emissions. Others may point out that the differences create inconsistent opportunities for oil and gas development.

For much of the past 30 years, these differences received little attention, primarily because most of the federal oil and gas resources in EPA's jurisdiction have been subject to moratoria. Moreover, the level of activities in the regions open to development has varied dramatically. According to DOI data from 2010, there were 3,409 production wells in the Gulf of Mexico and 23 in the Pacific.

Figure 1 illustrates the divided jurisdiction in the Gulf of Mexico. Although active leases are located in EPA's jurisdiction, none of the Gulf of Mexico platforms are in EPA's jurisdiction.

In 2008, moratoria provisions expired, allowing many of the areas in EPA's jurisdiction to potentially open for oil and gas leasing activity. In addition, estimates of oil and gas resources have spurred interest in areas other than the Gulf ( Table 1 ). For example, OCS areas off the Atlantic coast have also received attention in recent years. In 2007, the Minerals Management Service (MMS) proposed a lease sale in an area offshore of Virginia. The lease sale was set to take place in 2011. In the aftermath of the 2010 Deepwater Horizon oil spill, the Obama Administration canceled the sale (May 27, 2010). In addition, in DOI's most recent five-year plan for OCS leasing, DOI decided not to include the Mid- and South Atlantic planning areas.

Many Members of the 112 th Congress have sought to expand OCS oil and gas development. The House has passed several bills that would direct DOI to hold lease sales in particular areas, including the formerly proposed Virginia lease sale and areas of Southern California.

In addition, areas of the U.S. Arctic region, which were not subject to the moratoria, have generated recent congressional interest as industry has sought to establish a greater presence in the area. A primary driver for the activity in this region is the shrinking Arctic ice cap, or conversely, the growing amount of ice-free ocean in the summertime.

As interest in developing OCS resources in EPA's jurisdiction has increased, the EPA OCS air program has received increased scrutiny from some Members. In particular, Members have focused on the permit activity of Shell in the Chukchi Sea, part of the federal waters off Alaska's north coast. This interest led to the enactment of the Consolidated Appropriations Act, 2012 ( P.L. 112-74 ) on December 23, 2011, which transferred air emission authority in the OCS off Alaska's north coast from the Environmental Protection Agency (EPA) to DOI.

This report will provide an overview and brief history of the separate regulatory programs, examine and compare the requirements of the programs, and highlight potential implications of the differences. Although OCS sources can involve other industry sectors (e.g., deepwater ports or offshore wind projects), the focus of this report is air emissions from the OCS oil and gas exploration, development, and production operations.

Overview

OCS sources of air emissions can vary considerably, depending on the specifics of the operation. Offshore oil and gas sector operations, in particular, may include evolving technologies and take place in different settings, making it difficult to generalize air emission potentials. For example, mobile offshore drilling units involved in deepwater drilling in the Gulf of Mexico may emit considerably more emissions than a rig anchored to the sea floor in shallow water. Operations in the Arctic region may involve icebreaker vessels, which may generate considerably more emissions than other support vessels.

A Senate Report from the 1990 Clean Air Act (CAA) amendments stated: "The construction and operation of OCS facilities emit a significant amount of air pollution which adversely impacts coastal air quality in the United States. Operational emissions from an OCS platform and associated marine vessels can routinely exceed 500 tons of nitrogen (NO x ) and one hundred tons of reactive hydrocarbons annually."

Based on a review of EPA OCS permit documents, the 1990 Senate Report estimate is still valid, particularly for nitrogen oxide (NO x ) emissions. Table 2 identifies emission ranges of selected air pollutants from seven OCS oil/gas operations seeking, or recently receiving, air permits in EPA's jurisdiction. In some cases, the ranges cover a wide spectrum. For each source, NO x emissions account for the majority of the operations' regulated pollutants.

Four of the pollutants in Table 2 are considered "criteria" pollutants and have a National Ambient Air Quality Standard (NAAQS). Both NO x and volatile organic carbon (VOC) emissions lead to ozone (O 3 ) formation (sometimes described as smog), which is also a criteria pollutant.

According to congressional testimony from EPA Administrator Jackson, "a single exploratory drilling operation could emit approximately as much air pollution on a daily basis as a large state-of-the-art oil refinery."

History of OCS Air Emission Governance

A brief history of federal OCS air emission governance may be instructive to policymakers. First, its history may help explain the rationale for the current framework. Second, some of the arguments made during its development may apply to current issues.

1953–1978

Passed as separate statutes in 1953, the Submerged Lands Act and the Outer Continental Shelf Lands Act (OCSLA) established federal jurisdiction and governance, respectively, for oil and gas resources on the OCS. The 1953 OCSLA did not specifically mention air emissions, but provided the Secretary of the Department of the Interior with general authority, stating: "The Secretary may at any time prescribe and amend such rules and regulations as he determines to be necessary and proper in order to provide for the prevention of waste and conservation of the natural resources of the outer Continental Shelf."

The Nixon Administration established the Environmental Protection Agency (EPA) in 1970 under an executive branch reorganization plan. Although federal legislation addressing air pollution was first passed in 1955, the CAA Amendments of 1970 established the foundation of the federal air emissions program that exists today. For example, the 1970 law (among other provisions) set national standards for air quality, created a program to require the best available control technology at major new sources of air pollution, and established a program to regulate air toxics. In 1977, Congress made further amendments to the CAA, establishing (among other provisions) the prevention of significant deterioration (PSD) program.

Tension arose between the CAA provisions of the 1970s and the 1953 OCSLA. The 1953 OCSLA did not specifically mention which federal agency would have jurisdiction over the air quality effects of OCS development, resulting in uncertainty over what jurisdiction, if any, the newly created Environmental Protection Agency (EPA) had for air quality control in the OCS. The jurisdictional uncertainty led EPA to assert its authority to regulate air emissions from OCS sources in April 1978.

1978–1990

In September 1978, Congress passed the Outer Continental Shelf Lands Act of 1978 ( P.L. 95-372 ), providing the Department of the Interior (DOI) with authority to regulate the national offshore oil and gas program including the regulation of air emissions from offshore oil and gas operations. A federal appeals court affirmed DOI's authority (versus EPA authority) in 1979, in a case brought by the State of California against DOI. DOI issued regulations in 1980.

Some stakeholders in California continued to voice concerns regarding the level of control for OCS source air emissions. A 1992 report from the National Research Council stated:

Offshore air pollution is a problem in California that is not present in other oil-producing regions in the country (with the possible exception of the West Coast of Florida). Atmospheric conditions peculiar to coastal California involve a combination of the amount of sunlight, the mixture of pollutants already present, the direction of prevailing winds, and the presence of coastal mountain ranges—all of which work to trap smog along the coastal strip. A major problem here has been that air quality standards for air above federal waters were not as stringent as those for state waters.

1990–Present

Congress made substantial amendments to the CAA in 1990. A newly added Section 328 authorized EPA to implement certain air quality provisions of the act at offshore facilities, except for those west of 87.5 degrees longitude (i.e., Western and Central areas of the Gulf of Mexico). Offshore facilities not under EPA jurisdiction remain under DOI jurisdiction. EPA promulgated regulations for OCS sources in 1992.

In addition, Section 328(b) required the Secretary of the Interior to prepare a study assessing impacts of OCS sources in nonattainment areas that fail to meet NAAQS for ozone or nitrogen dioxide. Based on the results, the Secretary shall consult with the EPA Administrator to determine if additional actions are necessary. MMS published this study in 1995, which concluded that "the contribution of [OCS petroleum development] emission sources on onshore ozone concentrations is small." The MMS regulations remained largely unchanged (discussed below).

Role of OCS Moratoria

Decades long moratoria of oil and gas development for much of the OCS have influenced the level of interest regarding OCS air emission issues. As a result of public laws and executive orders of the President, OCS moratoria along the Atlantic and Pacific coasts, parts of Alaska, and the Gulf of Mexico have been in place since 1982. On July 14, 2008, President Bush lifted the executive moratoria, which included planning areas along the Atlantic and Pacific coasts. On September 30, 2008, moratoria provisions in annual appropriations laws expired, allowing these areas to potentially open for oil and gas leasing activity.

Thus, most of the OCS in EPA's jurisdiction has been off limits to oil and gas development until recently. Moreover, once a moratorium is removed, multiple legal and administrative processes must be satisfied before actual drilling can occur in a particular area.

EPA OCS Air Program

CAA Section 328 provides the underlying authority for EPA's OCS program. Pursuant to this section, EPA established two regulatory regimes: one for OCS sources located within 25 miles of a state's seaward boundary ("inner OCS sources"); another for OCS sources located beyond 25 miles of a state's water boundary and extending to the boundary of the EEZ ("outer OCS sources").

EPA created the separate regimes based on the text of Section 328. This section directs EPA to develop regulations requiring all OCS sources "to attain and maintain Federal and State ambient air quality standards and to comply with the provisions of [the prevention of significant deterioration (PSD) program]." In addition, Section 328 creates a more comprehensive program for inner sources, stating: " 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 [emphasis added]."

EPA promulgated regulations—40 C.F.R. Part 55—in 1992 for OCS source air emissions. Selected elements of these regulations are discussed below. In several instances, Part 55 directs OCS sources to air emission regulations in other CAA regulations, codified in separate parts of the Code of Federal Regulations . In general, these cross-references include the most substantive requirements for OCS sources.

Outer OCS Source Requirements

Compared to inner OCS source requirements, outer OCS source requirements are fewer and relatively less complex, because sources need only comply with federal regulations. EPA argued in its rulemaking proposal that CAA Section 328 gave the agency "some latitude" to determine the regulations for outer sources. In addition to PSD requirements (which Section 328 specifically identified), EPA chose to apply New Source Performance Standards (NSPS), National Emission Standards for Hazardous Air Pollutants (NESHAPS), and CAA Title V permitting provisions to outer OCS sources. These are discussed below.

Prevention of Significant Deterioration

Pursuant to CAA Section 328 (and 40 C.F.R. Part 55) OCS sources are potentially subject to the CAA's Prevention of Significant Deterioration (PSD) program. Congress added the PSD program to the CAA in 1977 to address new or modified emission sources that would affect areas meeting National Ambient Air Quality Standards (NAAQS). The primary objective of the program is to ensure that the air quality does not degrade in these areas with the addition of a new (or modified) source.

An OCS source that qualifies as a "major stationary source" must comply with PSD provisions. The primary determinant is an annual emissions threshold. For any stationary source, the threshold is 250 tons per year (tpy) of a regulated pollutant. Some specific emission sources have a lower threshold of 100 tpy. Oil and gas exploration, development, and production activities are not among these specific sources. Regardless, many OCS sources from the oil/gas industry are likely to approach or breach the 250 tpy threshold ( Table 2 ).

In addition to the 250 tpy threshold, as of January 2, 2011, an OCS source must consider its greenhouse gas (GHG) emissions. These emissions are subject to a different threshold. Per a 2010 rulemaking, EPA is phasing in GHG applicability for the PSD program. As of July 1, 2011 (the start of the second of four phases), new emission sources—not already subject to PSD for other pollutants—would be subject to PSD, if GHG emissions equal or exceed 100,000 tpy of carbon dioxide equivalents (CO 2 e). If an OCS source is already subject to PSD for one or more of the 250 tpy-threshold pollutants, the GHG emission threshold is 75,000 tpy of CO 2 e.

If an OCS source meets the definition of a "major stationary source," several PSD requirements apply. Selected requirements are discussed below, followed by an exemption for certain OCS sources.

Best Available Control Technology (BACT)

A source must apply BACT for each regulated pollutant that would be emitted in significant amounts. This means that a source may qualify as a "major stationary source" based on only one pollutant, but may need BACT for multiple pollutants. The significant amounts for selected pollutants are listed in Table 3 .

BACT is determined on a case-by-case basis, taking into account a proposed control measure's energy, environmental, and economic impacts. Most states have the authority to implement the PSD program and set BACT for applicable sources, but as mentioned above, only a handful of locales have Part 55 (OCS regulatory) authority. Therefore, the applicable EPA Region would determine BACT for OCS sources in most locations. Due to the moratoria, EPA has made such determinations in only a few instances.

Air Quality Demonstration and Analyses

A source must demonstrate that its emissions would not cause or contribute significantly to a violation of the NAAQS or any allowable maximum increase over the baseline concentration. To meet this demonstration, a source must provide an air quality analysis for each pollutant it would emit in a significant amount. In general, the pollutant analysis must include at least one year of continuous air quality monitoring data.

A source must provide further analysis regarding impacts to visibility and soils and vegetation. If a source's emissions may impact a Class I area—156 listed national memorials, monuments, parks, and wilderness over certain sizes— EPA must consult with the applicable Federal Land Manager. The Manager has the opportunity to demonstrate that the source would yield adverse impacts, such as reduced visibility. If EPA accepts this demonstration, the source would not receive a permit. If EPA disagrees, the agency must provide a publicly available explanation.

Emissions Monitoring and Reporting

Pursuant to PSD regulatory authority, EPA may require a source to continue to monitor ambient air emissions during its operation to determine the effect of the emissions. EPA may exempt a source from this requirement, if a source's emission levels are below pollutant-specific thresholds. Part 55 also contains provisions authorizing EPA to require emissions monitoring.

Exemption for Temporary Sources

OCS exploratory drilling operations may qualify for an exemption from certain PSD program requirements. The exemption has two conditions. First, regulated emissions from the major stationary source must not impact a Class I area (discussed above). Second, the source's emissions must be "temporary." EPA has not defined "temporary" in the PSD regulations, but in a 1980 Federal Register preamble, EPA stated that it considered sources operating for less than two years in a given location to be temporary sources.

Sources meeting the conditions of the exemption are not subject to the air quality demonstration and analyses discussed above. Several of OCS exploratory drilling operations that received EPA air permits qualified as temporary sources.

New Source Performance Standards

Part 55 requires OCS sources to comply with applicable New Source Performance Standards (NSPS) in 40 C.F.R. Part 60. NSPS are nationally uniform, technology-based standards for specific categories of stationary emission sources. The format of the standard can vary from source to source, and may entail a numerical emission limit, a design standard, an equipment standard, or a work practice standard.

Offshore oil development operations may involve equipment that has a NSPS. For example, several OCS draft permits prepared by EPA identify specific internal combustion engines with a NSPS in 40 C.F.R. Part 60, Subpart IIII.

National Emission Standards for Hazardous Air Pollutants

OCS sources may be subject to National Emission Standards for Hazardous Air Pollutants (NESHAP). Part 55 requires compliance with any regulations promulgated pursuant to CAA Section 112, if they are "rationally related to the attainment and maintenance of Federal or State ambient air quality standards or the requirements of [the PSD program]."

EPA has promulgated multiple regulations pursuant to CAA Section 112 (e.g., 40 C.F.R. Parts 61 and 63). In general, these regulations establish emissions standards for hazardous air pollutants released from specific sources (e.g., industries or equipment). Whether these regulations apply depends on the operating equipment of the specific OCS source.

Based on OCS permit documents from EPA Region 4 and Region 10, existing provisions in Part 61 are unlikely to apply to an OCS oil/gas drilling operation. Several of the permits identify equipment that would be potentially subject to provisions in Part 63 (e.g., Subpart ZZZZ, which regulates reciprocating internal combustion engines). However, in many cases the units satisfy Subpart ZZZZ requirements by complying with the NSPS in 40 C.F.R. Part 60, Subpart IIII (mentioned above).

Title V/Part 71 Operating Permits

A source may require a Title V permit, but not be subject to the provisions of other parts of the CAA, such as BACT under the PSD program. The emissions threshold for a regulated pollutant is lower for Title V than the PSD program. Instead of 250 tpy (as discussed above), the Title V threshold is generally 100 tpy.

Part 55 directs outer OCS sources to 40 C.F.R. Part 71, which contains the regulations promulgated to CAA Title V. The primary purpose of the Title V permit program is administrative/enforcement efficiency. Title V permits collect all applicable requirements in a single permit. Title V permits are not intended to change or alter the existing, underlying requirements or add requirements.

Although some may describe the Title V permit provisions as non-substantive, others may view them as onerous. Title V permits are issued for five-year periods and must be renewed thereafter. Permits generally require the following:

emissions limitations and standards to assure compliance with all applicable requirements; emissions monitoring, recordkeeping, and reporting; fee payments to support administrative expenses; and annual certification by a responsible official of the source.

Inner OCS Source Requirements

Inner OCS sources are subject to all of the requirements for outer OCS sources (described above) and any applicable state and/or local air emissions requirements. In the event of conflict between federal and state/local regulations, the more stringent provisions would apply.

Attainment vs. Nonattainment Areas

Compared to outer OCS sources, the location of the inner OCS source plays a key role in determining its applicable emission requirements. This is a function of the CAA and the potential variety of regulations among states and locales. A fundamental element of the CAA, which is generally implemented by states (at least for onshore sources), is its approach of setting more stringent standards for areas not meeting certain air quality standards ("nonattainment areas"). For example, in a nonattainment area, an inner OCS source may be subject to the lowest achievable emission rate (LAER), which is by definition more stringent than BACT. In addition, emissions from new or modified sources must also be offset by reductions in emissions from existing sources.

For the OCS air permits recently issued by EPA—in the eastern Gulf of Mexico and off the northern Coast of Alaska (Beaufort and Chukchi Seas)—the nearby coastal areas are in attainment. In general, the coastal non-attainment areas for pollutants common to OCS oil/gas operations (e.g., ozone) are located in California and the Mid-Atlantic ( Figure 2 ). If OCS operations expand, nonattainment areas may become more of a factor.

Notice of Intent/Corresponding Onshore Area Designation

An owner/operator of an inner OCS source must submit a Notice of Intent (NOI) to the appropriate EPA regional office and the appropriate state agency (or agencies) of the nearest onshore area and adjacent areas. Among other elements, the NOI must include (1) an estimate of the source's potential emissions (in tons per year) of any air pollutant; and (2) information allowing for an analysis of the source's impact in onshore areas. As discussed below, the NOI must include emission information from vessels associated with the operation.

The main purpose of the NOI is to allow the applicable state agency to decide if it wants to submit a request as corresponding onshore area (COA). The CAA requires OCS sources to comply with air emission provisions applicable to onshore sources in the COA. In general, the onshore area closest to the OCS source is considered the COA. The act provides EPA with the authority to designate another area as the COA, if that area has more stringent air emission controls and that area will be impacted by emissions from the OCS source. For this to occur, the state agency from the state seeking a COA redesignation must make a formal request to EPA. EPA must make a COA designation determination—based on state agency documentation and following a public comment period—within 240 days of receiving the NOI from the OCS source.

EPA regulations do not allow a COA redesignation for exploratory OCS sources (e.g., exploratory drilling operations). The statute is silent on this issue, but EPA determined it was unreasonable to require an exploratory source, which (according to EPA) may operate for 3-4 months, to undergo an administrative procedure that can last for 8 months.

OCS Vessel Emissions

Air emissions from vessels associated with OCS operations have generated some interest and debate. In some offshore oil and gas operations, the emissions from vessels may represent a substantial percentage of the operation's overall air emissions. Section 328(a)(4)(C) states:

The terms ''Outer Continental Shelf source'' and ''OCS source'' include any equipment, activity, or facility which—

(i) emits or has the potential to emit any air pollutant,

(ii) is regulated or authorized under the Outer Continental Shelf Lands Act [43 U.S.C. 1331 et seq.], and

(iii) is located on the Outer Continental Shelf or in or on waters above the Outer Continental Shelf.

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, shall be considered direct emissions from the OCS source.

While crafting the regulations (40 C.F.R. Part 55) implementing CAA Section 328, EPA interpreted the above provision to include vessels as OCS sources only when (1) they are permanently or temporarily attached to the seabed for the purpose of exploring, producing, or developing natural resource activities; or (2) they are physically attached to an OCS facility. If a vessel qualifies as an OCS source, it may need to comply with other sections of the CAA, namely the PSD program and BACT.

Emissions from support vessels (i.e., non-OCS source vessels) play a role in how the OCS source the vessels support is regulated. All air emissions, including transit-related emissions within 25 miles of the OCS source, from support vessels must be accounted for in an OCS source's "potential to emit." In some situations, the support vessel emissions may cause the OCS source's emissions to cross regulatory thresholds (i.e., 250 tpy of regulated pollutants in the case of PSD).

State Authority

Coastal states may seek authority to implement and enforce air emission requirements for OCS sources in federal waters adjacent to state waters. This authority can include sources within the 25 mile seaward boundary and/or sources beyond this boundary. To obtain this authority, a governor must submit his/her state regulations to the EPA Administrator, who determines if the state provisions are adequate, based on specific criteria. If a state does not seek delegation, EPA implements the program in waters adjacent to that state. In addition, if a neighboring state has sought and received a COA redesignation (as discussed above), EPA may implement the more stringent standards of this neighboring state.

According to a 2008 EPA Federal Register notice, only four local air pollution control agencies in California have received authority to implement Part 55. This relatively small number is likely related to the moratoria. EPA implements and enforces the regulations for all other sources within EPA's jurisdiction, including the state/local air emission regulations for inner OCS sources. If policymakers open more OCS areas to oil/gas activities, this dynamic may change.

Procedural Requirements

Although Part 55 does not include specific administrative procedures and public participation requirements, statutory provisions and requirements referenced in Part 55 would apply. Table 4 identifies procedural time frames for PSD and Title V permits that would apply to outer OCS sources. Inner OCS sources would be subject to the same standards as onshore sources. These standards vary by state and may be more stringent than the time frames identified below.

Public Participation

In general, when EPA prepares a draft permit, the agency must provide 30 days for public comment. Parties may request a public hearing, which EPA must hold if the Administrator "finds, on the basis of requests, a significant degree of public interest in a draft permit." In addition, the agency has the discretion to extend the comment period beyond 30 days, and it may reopen the comment period to expedite the decision process.

Administrative Appeals Process

PSD and Title V permits are subject to an administrative appeals process. Any person who submitted comments concerning the draft permit (or participated in a public hearing) may petition—within 30 days of the final permit decision—EPA's Environmental Appeals Board (EAB) to review any condition of the permit. In addition, the EAB may decide on its own initiative to review conditions in a permit. The EAB must issue its decision "within a reasonable time" after receiving a petition.

Judicial Review

In addition, parties may contest EPA's permit decision in the court system. Judicial review of permit decisions is typically governed by the particular environmental statute that is the subject of the litigation. CAA Section 307 provides for judicial review of EPA actions. In addition, CAA Section 502 includes judicial review provisions for Title V permit activity, providing an opportunity for judicial review in state court of final permit actions by the applicant, persons who participated in the public comment process, and any other person who could obtain judicial review of such actions under state laws. However, parties must go through the EAB process before seeking judicial review of agency action.

DOI OCS Air Program

The DOI authority to address OCS air emissions comes from the 1978 OCSLA, which directs the DOI Secretary to promulgate regulations "for compliance with the national ambient air quality standards pursuant to the Clean Air Act (42 U.S.C. 7401 et seq.), to the extent that activities authorized under this subchapter significantly affect the air quality of any State."

To satisfy this directive, DOI (acting through the U.S. Geological Survey) promulgated regulations in 1980. The regulations were redesignated (i.e., renumbered) in 1998, but the 1980 provisions generally remain the same in 2011. The recent administrative changes (described in the earlier "Reader's Note") have led to a further restructuring of the regulations. An October 2011 direct final rule separated BOEM and BSEE regulations, creating 30 C.F.R. Part 550 for BOEM provisions (BSEE regulations were retained in their original location). The rule did not add or remove OCS requirements, but makes organizational changes needed to accommodate the DOI administrative changes.

In addition, DOI or its agencies (e.g., MMS, BOEM) have periodically issued Notices to Lessees and Operators (NTLs), which "clarify, supplement, or provide more detail about certain requirements."

Activity-Specific Plan Requirements

Before conducting operations on the OCS, leaseholders must (among other requirements) submit and receive approval for activity-specific plans. For example, the OCSLA requires lessees to have an approved Exploration Plan (EP) for exploration activities and a Development and Production Plan (DPP) for development and production activities or a Development Operations Coordination Document (DOCC) in areas, such as portions of the Western Gulf of Mexico, where significant activities have already taken place. (Hereinafter in this report, references to DPPs include DOCCs.) BOEM is charged with reviewing and approving these plans.

These plans must include, among other provisions, a facility's projected emissions (in tpy and other measurements) of SO 2 , particulate matter (measured in PM 2.5 and PM 10 when applicable), NO x , CO, and volatile organic compounds (VOC). The lessee will apply these projections, and other related information (e.g., distance from shore), to determine whether certain requirements apply (e.g., BACT).

A 2009 NTL stated that these requirements apply "regardless of whether the proposed activities are in an area under [DOI] jurisdiction or EPA air quality jurisdiction."

Exemption Determination

A primary determination is whether the OCS source is exempt from further air emission requirements. The DOI regulations contain an exemption formula, based on projected emissions and distance from shore. For all of the pollutants listed above except CO emissions, the exemption formula is:

E = 33.3D

Where:

E equals the exemption threshold (in tpy), and

D equals distance from shore (in miles).

For example, if an OCS source would be located 30 miles from shore, it would be exempt from further air emission requirements as long as the projected emissions for each pollutant (SO 2 , PM, NO x , and VOC) were below its exemption threshold of 990 tpy. Note the primary threshold for EPA's substantive requirements (e.g., PSD program) is 250 tpy, and states may have even lower thresholds that would apply to inner OCS sources.

Significance Determination

For a non-exempt OCS source, the next determination is whether projected air emissions from any pollutants would "significantly" affect onshore air quality (VOC emissions from non-exempt sources are automatically deemed to significantly affect onshore air quality). These sources must make the significance determination by using an approved air quality model. If the model indicates that air pollutant concentrations—specified in 40 C.F.R. §550.303(e)—would be exceeded, the facility's emissions would significantly affect onshore air quality. The DOI significance levels are the same required by EPA when determining whether a new major source would significantly impact the air quality of a neighboring nonattainment area.

Required Emission Controls

If air emissions from a non-exempt OCS source would significantly affect the air quality of an onshore area (based on the modeling described above), further requirements apply. The requirements depend on whether the impacted onshore location is an attainment (or unclassifiable) or nonattainment area. If more than one area would be impacted, the more stringent requirements would apply.

Emissions Monitoring and Reporting

According to the DOI regulations, lessees must monitor air emissions ("in a manner approved or prescribed by the Regional Supervisor") regardless of the source's exempt status or whether the OCS source's emissions would significantly impact air quality. In addition, the regulations require lessees to submit emission information to DOI on a monthly basis. However, it is uncertain whether OCS sources are complying with this provision as written.

Nonattainment Areas

For nonattainment areas (e.g., Figure 2 ), the source must "fully reduce" emissions of any pollutant that would significantly affect air quality. To achieve this objective, the lessee must apply BACT, which, like EPA's definition, allows for the consideration of energy, environmental, and economic impacts. The lessee determines BACT, but a regional BOEM official verifies BACT on a case-by-case basis.

By comparison, EPA imposes LAER for new (inner OCS) sources in nonattainment areas, a potentially more stringent control. However, if BACT alone would not address the applicable emissions at an OCS source in DOI's jurisdiction, the source must make additional reductions or acquire emission offsets from another source.

Attainment Areas

If attainment areas would be affected, an OCS source must apply BACT to emissions of any air pollutant that would significantly affect air quality in the attainment area. In addition, the lessee must determine whether—after applying BACT—emissions of total suspended particulates (TSP) or SO 2 would increase emission concentrations over specified thresholds ("maximum allowable increases") in the applicable area. The specified maximum allowable increases are similar to those in EPA's PSD regulations. However, the EPA regulations address PM 10 instead of TSP emissions, and also include NO 2 emissions. The likely explanation for this difference is that the DOI regulations reflect the EPA standards in place in 1980. Since that time, EPA has revised standards and added new pollutants.

Temporary Facilities

OCS sources that are considered "temporary facilities" must apply BACT to address emissions of any pollutant that would significantly affect the air quality of an onshore area. Temporary facilities are defined as offshore operations in one location lasting less than three years. Note that EPA's time frame for temporary is two years.

OCS Vessel Emissions

OCS vessel emissions in DOI's jurisdiction are counted the same as emissions in EPA's jurisdiction. CAA Section 328(a)(4) contains the definition for OCS source. This definition applies to sources in both EPA and DOI jurisdictions. As discussed above, support vessel emissions "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, shall be considered direct emissions from the OCS source."

The DOI regulatory text addressing vessel emissions does not precisely match up with the CAA text. Although the activity-specific plan regulations require lessees to document support vessel emissions, the exemption formula provision (discussed above) specifically points to air emissions documented under a different subsection, which does not include vessel emissions. However, DOI guidance on emission calculations for plan submittals mirrors the statutory text.

Procedural Requirements

The DOI regulations set specific time frames for agency review of Exploration Plans (EPs) and Development and Production Plans (DPPs). In general, these time frames are considerably shorter than those for EPA. These time frames are identified in Table 5 . The maximum time frame for EP review is much shorter than for DPP review.

Coastal Zone Management Act Review

Section 307(c)(3) of the Coastal Zone Management Act (CZMA) requires lessees to certify the "consistency" of an EP or DPP with an approved coastal zone management program of an affected state (or states). Section 307(f) specifically requires coordination with CAA requirements.

When a state determines that a lessee's plan is inconsistent with its coastal zone management program, the lessee must either reform its plan to accommodate those objections and resubmit it for BOEM and state approval, or succeed in appealing the state's determination to the Secretary of Commerce.

Some have questioned the impact of the CZMA consistency provision. Historically, states have concurred with about 95% of the federal actions they have been asked to certify. As of 2009, 43 consistency decisions have been subjects of Commerce Secretary determinations. The subject of 18 of these appeals has been offshore energy activities. However, the most recent of these decisions was rendered in 1999.

It is widely believed that the existence of the consistency requirement and the uncertainty of the outcome of an appeal have led applicants to negotiate with states and to modify proposed actions early on, thereby reducing the number of appeals. However, there are no data on the number of proposed actions that have been altered because of the consistency process.

In addition, the CZMA regulations—implemented by the National Oceanic and Atmospheric Administration (NOAA)—indicate that some OCS activities may not require a review. As activities occur farther offshore, a state's CZMA review authority becomes less clear. According to NOAA, a coastal state's ability to review activity-specific plans stops at the point where coastal effects are not "reasonably foreseeable." Whether this threshold is met would be determined on a case-by-case basis with the state, the lessee, and DOI.

Public Participation

The DPP regulations require a 60-day comment period, in which any party may submit comments or recommendations to the BOEM Regional Supervisor. The EP process does not include an opportunity for public participation ( Table 5 ).

Judicial Review

The OCSLA provides opportunity for judicial review of agency action alleged to be in violation of federal law, including the OCSLA, its implementing regulations, and the terms of any permit or lease.

Comparison of DOI and EPA Air Programs

Table 6 compares selected elements of the EPA and DOI air emission programs. The table examines the requirements applicable to outer OCS sources in EPA's jurisdiction. Inner OCS sources must follow the requirements that would apply to an onshore source in the corresponding onshore area. As discussed above, these provisions vary by state and whether the area is an attainment or nonattainment area. Regardless, inner OCS source requirements would be at least as stringent as outer source requirements in all situations, and potentially more stringent in some locations (e.g., California).

The primary difference between the EPA and DOI programs is rooted in the different statutory authorities: the 1990 CAA and the 1978 OCSLA. The primary objectives of these statutes are different—air quality versus offshore energy development. The two regulatory programs reflect these underlying differences.

OCS sources in EPA's jurisdiction must comply with the PSD program (e.g., BACT), among other requirements. Sources subject to DOI's regime must comply with similar standards (e.g., BACT), only if their emissions would "significantly affect" a state's air quality. This key difference translates into a considerably different scope of applicability between the two programs. For example, DOI's two-step significance determination is a potentially much less stringent threshold than EPA's 250 tpy threshold for its PSD program. Moreover, the federal threshold for Title V permits is 100 tpy. For sources within 25 miles of a state's shores, the PSD and Title V thresholds may be even lower.

Another substantial difference is the time frame allotted to the agencies for reviewing a potential source's permit (EPA) or activity-specific plan (DOI). In addition, the EPA permit process allows greater opportunity for input from the public. In particular, EPA's EAB offers parties a powerful tool to compel agency review.

Some stakeholders would likely argue that the additional opportunities for public involvement in EPA's permit process help create a balance between resource development and environmental concerns. Others would likely contend these steps present unnecessary burdens and timing uncertainty in the process. If more OCS areas in EPA's jurisdiction are open for oil and gas leasing, policymakers interest in these differences will likely increase.