Bingaman-Murkowski Bill on BP Oil Spill Captures Low-Hanging Fruit But Leaves the Environment at Risk

by Alyson Flournoy

June 30, 2010

Senate Bill 3516, introduced by Senators Bingaman and Murkowski in response to the BP oil spill to reform the Outer Continental Shelf Lands Act (OCSLA), proposes many intelligent and much-needed changes (the Energy & Natural Resources Committee will hold a hearing on the bill today). Among these, the legislation would imposea long-overdue mandate for best available technology for oil exploration and extraction, require that proponents of drilling evaluate the possibility of a well blowout and develop a response plan for a blowout, require a review of royalty and bonding requirements, and increase from 30 to 90 days the timeframe for the agency to review exploration plans, with an option for an extension if needed. The legislation would also significantly improve the structure of what was MMS (now the Bureau of Ocean Energy Management, Regulation and Enforcement) to separate incompatible functions, enhance the agency’s enforcement and investigative powers and its capacity to assess the environmental impacts and safety of proposed drilling operations, and build agency expertise in the technology and risks associated with OCS oil drilling through a research program. These are all very positive steps and a responsible response to the immediate crisis and the most patent problems with the OCSLA that this disaster has revealed.

These fixes would not be enough to get the job done, though. Perhaps it’s expecting too much of one bill, but the risk is that once Congress addresses reform of the OCSLA in a comprehensive bill like S.3516, there will almost certainly not be a second chance. That's just how lawmaking in response to disasters works.

The OCSLA was a statute in desperate need of updating and reform. There are fundamental shortcomings that remain untouched by S.3516 and that contributed to the outcome we face today: unprecedented, unimaginable, and incalculable damage to the natural resources in the Gulf of Mexico and the attendant devastating effects on the lives of people who depended on those resources. 

The OCSLA focuses almost single-mindedly on promoting access to and development of Outer Continental Shelf (OCS) oil and gas reserves, and outlines the planning and bidding process for leases and financial arrangements related to drilling. It is shameful that in 2010, the statute still lacks any meaningful mandate for protection of the environment, but that is the reality.  S.3516 makes noble-sounding but ineffectual gestures toward rectifying this, adding language to acknowledge that environmental, health, and safety impacts of oil development should be “recognized” in managing the OCS and that protecting environmental values is in our long-term economic interest. But the bill does nothing to ensure protection of those values. S. 3516 would add to OSCLA's declaration of policy weak language suggesting that drilling should only occur when there are “reasonable assurances of adequate protection” of life, health, the environment or other users of the environment. Not only is this merely aspirational (because it’s a statement of policy and not an enforceable mandate), it‘s a lackluster aspiration at best. It would probably be better to say nothing than to create the veneer of consideration for the environment with nothing to back it up. Yes, improved technology and better planning should prevent well blowouts and consequent spills, thereby protecting the environment. And the bill does propose some positive steps to bring environmental protection into the discussion, notably by ensuring that certain key environmental information will be collected by Interior. But there is ultimately no mandate that this information will have any weight. 

Moreover, in the only provision that comes close to imposing a substantive standard to protect the environment, S. 3516 does the environment no favors. Section 6(e) of the Bill would amend 43 §USC 1340, inter alia, by mandating that the Secretary of the Interior shall disapprove an exploration plan if (s)he determines:

“because of exceptional resource values in the marine or coastal environment, or other exceptional circumstances that . . . implementation of the exploration plan would probably cause serious harm or damage to life (including fish and other aquatic life), property, mineral deposits, national security or defense, or the marine, coastal or human environments. . . .”). 

This provision would set such an extraordinarily high standard of proof that it’s not clear to me that BP’s plan would have been disapproved, even had it outlined exactly what BP was planning. The agency has to be able to show that the exploration plan would “probably” cause serious harm.  That pretty much rules out all low probability accidents, no matter how potentially catastrophic, not to mention the numerous situations in which there is substantial uncertainty or inadequate information to predict that an accident is more likely than not. So it seems cold comfort to mandate that the Secretary disapprove exploration plans if he can prove that they would probably harm the resources. Yes, the Secretary may have discretion to disapprove plans in other cases, but leaving protection of the environment to agency discretion is a risk we cannot afford.

In our 2007 report Squandering Public Resources, CPR policy analysts Matt Shudtz and Margaret Clune Giblin and I reviewed the state of the federal government’s management of public natural resources – resources including its parks and wildlife refuges, national forests, grasslands and wetlands, as well as mineral resources like oil and gas. The pattern was clear. Under our public natural resource and land management laws, agencies are too often given broad discretion to manage resources for multiple uses, leaving the protection of the environment vulnerable to the shifting political winds. Suffice it to say that the Bush Administration’s record on protection of environmental values under these statutes was not strong. 

And regardless of the policies and ideology of a particular administration, giving agencies broad discretion and no clear mandate places them in a weak position when faced with the inevitable pressure from the most vocal constituency: users seeking to reap profit from economically valuable resources. The net result we outlined in the report was a pervasive pattern of ongoing degradation of the environment, and a failure to consider the public’s long-term interest.   In light of the extremely strong economic interest in drilling for oil and the pressure that even a new and more independent agency will face from the oil industry in favor of drilling, the OCSLA needs a strong mandate for protection of the environment embodied in substantive standards that govern leasing, exploration, and permitting decisions.

The OCSLA currently exudes discretion and provides no mandate for any consideration of environmental protection. It directs the Secretary of the Interior to develop such regulations for leasing as he determines to be necessary and proper, merely nodding toward prevention of waste and conservation of natural resources as values that may be relevant.  Exploration plans “shall be approved by the Secretary” if the Secretary finds the plan consistent with the statute and relevant regulations. Period. And there is no mandate to ensure that these regulations impose any particular level of protection for the environment. S.3516 misses an important opportunity to rectify this. The Bill would not even provide as much protection for environmental values as most of the statutes we reviewed critically in Squandering Public Resources, such as the National Forest Management Act and the Federal Land Policy Management Act.

The long-term lesson of the oil spill in the Gulf is not just that we need to try to avoid a well blowout. It’s that well blowouts and other unthinkable accidents that we would like to discount can and do happen. Underwater drilling and especially deep water drilling are risky enterprises. So, with each decision to lease, to explore, to drill, we are deciding to take risks.  Before we authorize a new and improved agency to make these decisions, we need to decide how much risk to the environment we are willing to tolerate. So far, Congress has not weighed in on this critically important question of policy. The Bingaman-Murkowski bill does nothing meaningful to address this. 

What should Congress be doing instead? The better option is for Congress to enact a law that creates stronger protection for all our publicly owned and managed natural resources. I and others have proposed the idea of a National Environmental Legacy Act – a statute that would for the first time require us to define the environmental legacy we want to leave to our children and grandchildren and ensure that the agencies charged with managing these resources protect that legacy. Resolving how to balance our many values including protection of the environment is not an easy task. Let’s hope that the oil spill will give Congress the courage to tackle this difficult question, either in the OCSLA reform efforts or more broadly.

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Also from Alyson Flournoy

Alyson Flournoy is Professor and Alumni Research Scholar at the University of Florida Levin College of Law in Gainesville. She is a member of the board of directors of the Center for Progressive Reform.

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