On March 21, 2011, the U.S. Department of Interior approved the first Gulf of Mexico deepwater exploration plan since the Deepwater Horizon incident last year. An exploration plan describes all of an operator's planned exploration activities for a specific lease, including the timing of the proposed activities, the location of each planned well, and other relevant information. Once a plan is approved, the operator can pursue permits to drill. The plan, submitted by Shell Offshore, a subsidiary of Royal Dutch Shell PLC, calls for the drilling of three new exploratory wells in Shell's Augur field, an area 130 miles offshore of Louisiana that has been producing oil and gas since 1994.
The approval of this plan is the first to be approved under the Interior's new requirements for offshore oil and natural gas drilling. Under the old requirements, offshore exploration plans were given a categorical exemption from the National Environmental Protection Act ("NEPA") requirement to conduct an environmental assessment prior to approving offshore drilling. However, under the new requirements, Interior must engage in a site-specific environmental assessment, except in limited circumstances, to determine if the proposed drilling will have a significant impact on the quality of the human environment. Pursuant to NEPA, if an action is determined to have a significant impact on the quality of the human environment, the agency must prepare a detailed environmental impact statement, a process that can take a year or longer. In the case of this latest plan, Interior conducted an environmental assessment and issued a Finding of No Significant Impact, meaning that a more detailed environmental impact statement would not be required prior to Interior's approval of the plan. In a March 21, 2011 Interior press release, Secretary Salazar was quoted as stating, "The reforms we have implemented have set a strong new standard for safety and environmental protection for offshore operations. This exploration plan meets the new standards for environmental review and marks another important step toward safer deepwater exploration."
The approval of this plan is also notable because it was the first time that the Interior was faced with demonstrating that it had the capability to conduct an environmental assessment during the 30-day review period allowed for the Interior to process an exploration plan. This 30-day requirement has faced considerable scrutiny both from the current administration and members of Congress who did not believe that thirty days was adequate for review of an exploration plan.
In addition to approving the plan, the Department of Interior has approved four deepwater drilling permits this month, following the end of the deepwater drilling moratorium imposed after the Deepwater Horizon incident and the imposition of stricter safety standards. The most recent approval allows ExxonMobil Corp. to drill a well in 6,941 feet of water.
A copy of Interior's press release on the approval of Shell's exploration plan can be found here.