Regulatory framework for permitting wells and pipelines Typical timeframes and hang-ups in the permitting process Best practices for permitting Programmatic approaches to well field development on tribal lands, including potential benefits to tribes, Bureau of Indian Affairs (BIA), and operators

1. Best Practices for NEPA Compliance
and Related Permitting for Projects
on Indian Lands
Kurt Schweigert
Senior Consultant
August 26, 2014

2. Best Practices for NEPA Compliance and
Related Permitting for Projects on
Indian Lands
 Brief Historical Context for NEPA
 NEPA Process
 NEPA Compliance for Oil, Gas, and Pipeline
Industries in Regional and Montana Contexts
 The evolving nature of NEPA and potential
application to oil & gas development on trust lands
 Common issues and BMPs for managing NEPA on
Indian lands

3. NEPA in Historical Context
Year Law Lead Federal Agency
1966 National Historic Preservation Act (NHPA) National Park Service, Advisory Council
on Historic Preservation
1969 National Environmental Policy Act (NEPA) Council on Environmental Quality (CEQ)
1970 Environmental Protection Agency (EPA) created
1970 Clean Air Act (CAA) EPA, U.S. Army Corps of Engineers
1973 Environmental Species Act (ESA) U.S. Fish & Wildlife Service (FWS),
National Oceanic and Atmospheric
Administration (NOAA).
1976 Toxic Substance Control Act (TSCA) EPA
1976 Resource Conservation and Recovery Act (RCRA) EPA
1980 Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA)
EPA

4. NEPA in Historical Context
Evolution of NEPA, 1969-2014
1969 -- NEPA legislation provided for establishment of the President’s Council on
Environmental Quality (CEQ) as an independent regulatory agency. The Act
became law on January 1, 1970.
1970 – Executive Order 11514 directed CEQ to issue regulations to federal agencies for
the implementation of the procedural provisions of the Act (42 U.S.C. 4332(2)).
1971 – CEQ issues initial guidelines for implementation of the Act.
1977 -- Executive Order No. 11991 gave CEQ authority to issue regulations that would
be binding on all federal agencies. CEQ issued regulations in 1978 that became
binding in 1979 (40 CFR Parts 1500-1508, as amended).
2005 – CEQ issues updated/revised regulations. All EISs and associated comments are
required to be filed with the EPA ((40CFR§1506.9).
2011 – CEQ issues guidance “Appropriate Use of Mitigation and Monitoring and
Clarifying the Appropriate Use of Mitigated Findings of No Significant Impact
2014 – CEQ issues draft guidance “Effective Use of Programmatic NEPA Reviews”

5. NEPA Process
As originally defined by CEQ and Federal agencies, the NEPA
process consists of three steps:
1. Conduct a preliminary screening for NEPA’s applicability (further NEPA
analysis may not required for proposed actions that are considered
“categorical exclusions,” or that have been sufficiently addressed in previous
NEPA analysis.
2. Prepare an Environmental Assessment (EA) to determine whether an
Environmental Impact Statement (EIS) is required; and
3. Prepare an EIS if required (an EIS is required if a proposed action may
“significantly affect the quality of the human environment”).

6. NEPA Process
Significance of environmental impacts includes
consideration of
 Context. This means that the significance of an action
must be analyzed in several contexts such as society as a
whole (human, national),the affected region, the affected
interests, and the locality.
 Severity of impact to
 public health or safety
 unique characteristics of the geographic area such as proximity to park
lands, prime farmlands, wetlands, wild and scenic rivers, or ecologically
critical areas
 cultural resources or other significant scientific resources
 endangered or threatened species or its habitat that has been determined
to be critical under the Endangered Species Act

7. NEPA Process (con’t)
Significance of environmental impacts includes
consideration of
 The degree to which the effects on the quality of the
human environment are likely to be highly
controversial
 Whether the action may establish a precedent for
future actions with significant effects
 Whether the action is related to other actions with
individually insignificant but cumulatively significant
impacts

8. NEPA Process
Project Definition
NEPA Applicability?
Yes No Categorical Exclusion (CatEX)
Determination of NEPA Adequacy (DNA)
Environmental Assessment (EA)
Finding of No Significant Impact (FONSI)
Environmental Impact Statement (EIS)
Record of Decision (ROD)

9. NEPA Process
 Elements of the environment commonly
addressed for NEPA include:
 Social and economic
conditions
 Environmental Justice
 Public health and safety
 Surface and groundwater
resources
 Air quality
 Cultural resources
 Threatened, endangered,
and candidate species
 Other Wildlife
 Vegetation and invasive
species
 Recreation
 Soils
 Visual resources
 Geology and geological
resources
 Wetlands
 Land use
 Roads and utilities

10. Applicability to Federal and Indian Lands
Compliance with NEPA is required for upstream oil and
gas operations when
 Land surface is administered by a Federal agency
 Usually the BLM or USFS, but can be any Federal land-managing
agency
 Land surface or minerals are owned by Indian tribes or individual
Indian allottees and held in trust by the United States
 Bureau of Indian Affairs (BIA) is responsible for NEPA on trust
lands
 Minerals are in Federal ownership, regardless of land surface
ownership
 BLM is responsible for permitting of exploration and
development of all Federal minerals, including minerals held in
trust for tribes and Indian allotees

11. Applicability to Federal and Indian Lands
Responsible Federal agencies must consider the
potential effects of their actions on the human
environment prior to initiating the actions. For
upstream and midstream oil and gas, Federal actions
include:
 Leasing of minerals
 Approval of Applications for Permit to Drill (APDs)
 Approval of Surface Use Plans
 Review and acceptance of rights-of-way and other
permits on Federal and Indian trust lands

12. Applicability to
Federal and
Indian Lands
Federal Lands in the
Western U.S.
Excluding Tribal and Bureau
of Reclamation Lands
341,955,500 acres of
Federal and Tribal surface
ownership in these states
424,700,000 acres of
Federal and Tribal mineral
ownership in these states

13. Applicability to Federal and Indian Lands
Montana
 27.2 million
acres of Federal
and Indian
surface
ownership –
29%
 38.7 million
acres of Federal
and Indian
mineral
ownership –
40%

14. Applicability to Federal and Indian Lands
Region CO MT ND NM SD UT WY
EIS NOIs 2011-2014 160 37 28 12 17 9 20 37
Project Sector
Federal Facilities 9 0 0 1 7 1 0 0
Generation/ Transmission 24 5 3 4 1 2 3 6
Mining 21 4 4 0 2 1 3 7
Natural Resources Mgt 58 14 17 2 2 4 6 13
Oil/Gas E&P 18 6 0 1 2 0 3 6
Pipelines 11 0 1 3 1 0 3 3
Transportation 5 0 2 0 0 1 1 1
Other 14 8 1 1 2 0 1 1
NOIs for EIS Starts 2011-2014

18. Applicability to Federal and Indian Lands

19. The Evolving NEPA Landscape for Federal
and Indian Lands in Montana
 Oil and gas development in Montana and the region will involve
more Federal and Indian lands as private lands and minerals are
worked through
 Permitting for drilling on Federal and especially Indian trust lands
is far more time consuming and expensive than permitting on fee
lands, largely due to NEPA compliance
 results include less competition and lower bonuses for
leases, delays in bringing prospects to production, and
impacts without proportional benefits on Indian
reservations because fee lands and minerals are drilled
first.
 Workloads are likely to increase for already stretched BLM, USFS,
and BIA personnel who deal with NEPA

20. The Evolving NEPA Landscape for Federal
and Indian Lands in Montana
Reality: Industry and Federal agencies are necessarily partners
in NEPA compliance
 BLM, USFS, BIA are responsible for NEPA compliance but
generally don’t have resources to do the research and prepare
the documents, at least as quickly as operators would prefer
 Evolving technical issues – sage grouse/other species, air
emissions – increasingly involve other Federal agencies in the
NEPA process, usually in agency-to-agency consultation
 Oil and gas operators have a vested interest in clearing the
NEPA hurdles in a timely manner at least possible cost, and
operators have funding and staff resources
 Operators also generate much of the information necessary for
environmental evaluations

21. The Evolving NEPA Landscape for Federal
and Indian Lands in Montana
Environmental Impact Statements
 Typically take years to prepare – average now is around 5
years, depending on a number of factors
 Start with an implication that significant environmental
impacts may occur
 Generally cover large areas, such as entire basins
 Often start with a Plan of Development (POD) that is
already well developed and therefore somewhat rigid –
and changes to a POD typically cause delays and additional
expense, especially after drafts of the EIS are released for
public comment

22. The Evolving NEPA Landscape for Federal
and Indian Lands in Montana
Environmental Assessments
 Are traditionally intended to determine whether a proposed action
would result in a significant environmental impact, and therefor a
need for an EIS.
 Typically are done for single wells or a small number of wells, a
specific smaller pipeline, a gathering system, or a facility such as a
gas plant.
 Typically are too narrowly focused to allow cumulative impacts to
be addressed adequately, particularly for impacts that extend
beyond the locality, such as air emissions, species health, and socio-
economic impacts.
 Tend to be highly redundant and of little applicability for other
similar developments.

23. The Evolving NEPA Landscape for Federal and
Indian Lands in Montana
Movement toward Programmatic NEPA Documents
CEQ has always recommended that NEPA be incorporated in
early project planning:
Agencies shall integrate the NEPA process with other planning at
the earliest possible time to insure that planning and decisions
reflect environmental values, to avoid delays later in the process,
and to head off potential conflicts (40CFR§1501.2).
Programmatic NEPA analysis
 Is an effective method of “right-sizing” the geographic
scope of a NEPA document to address the type of project
and especially cumulative impacts
 Is an established tool to address broad-scale agency
programs

24. The Evolving NEPA Landscape for Federal
and Indian Lands in Montana
On August 22, 2014, CEQ published draft guidance “Effective Use of
Programmatic NEPA Reviews”
(www.whitehouse.gov/administration/eop/ceq).
Programmatic Reviews
 Are appropriate for broad or program level actions, or for
projects with multiple similar actions that are expected to occur
over time.
 Provide a basis for effective tiering of EAs or EISs for specific
projects.
 Provide a “jumping off point” for analysis of cumulative and
indirect impacts, that often cannot be adequately addressed at
lower or tiered levels of NEPA analysis.
 Provide a basis for inter-agency coordination, particularly
regarding compliance with other laws and regulations.

25. The Evolving NEPA Landscape
The new CEQ guidance includes these points:
 Programmatic reviews can be
 terminal NEPA documents, such as for agency
policies for herbicide use, or
 “umbrella” documents that address environmental
issues common to multiple subsequent activities, but
that anticipate a more refined analysis that focuses
on the particular environmental factors for specific
activities.

26. The Evolving NEPA Landscape
The new CEQ guidance includes these points:
 Collaboration and cooperation among Federal agencies,
tribes, and state and local governments is especially critical
for successful completion of meaningful programmatic
NEPA reviews.
 Engaging the public is particularly important when
developing programmatic NEPA reviews in order to ensure
agency objectives are understood and to clarify how a
programmatic review relates to subsequent tiered reviews.

27. The Evolving NEPA Landscape
The new CEQ guidance includes these points:
 Programmatic approaches are usually associated with ElSs;
however
 An agency may prepare a Programmatic Environmental
Assessment (PEA) to determine whether an ElS is required
or when considering a proposal that does not have
significant impacts at the programmatic level.
 Following a PEA that results in a FONSI, an agency may tier
to an EA that results in a finding of no significant impact, or
may tier to an ElS when a subsequent site- or project-
specific proposal has the potential for a significant impact
on the environment.

28. The Evolving NEPA Landscape
Preparation of a PEA may be the preferred approach to NEPA for oil
and gas development on Indian lands in Montana because
 Few NEPA documents have been done for oil and gas
development on Indian reservations that are sufficient to
allow tiering for individual projects.
 A PEA allows and requires cooperation among multiple
agencies. At a minimum, permitting a well on trust lands
requires coordination among the BIA regional and agency
offices, the BLM, the Tribes, EPA, and the U.S. Fish & Wildlife
Service.
 Many of the environmental conditions are likely to be
consistent across large geographic areas of reservations
and/or are likely to concern reservation-wide social and
economic impacts.

29. The Evolving NEPA Landscape
In addition to regulatory efficiency, a programmatic approach on
Indian lands would help level the playing field with oil and gas
development on non-trust lands
 Costs and timeframes for permitting wells and associated
infrastructure would decrease
 Design, construction, and reclamation requirements would be
known to potential operators
 Certainty would increase for planning drilling and
development schedules

30. The Evolving NEPA Landscape
Pertinent Example of a PEA for Indian lands:
A PEA is nearing completion for 1,740 proposed oil wells on trust
lands on the Fort Berthold Reservation in North Dakota
 Cooperation among 8 operators, BIA, EPA, USFWS, Tribes
 Enthusiastic support from the Three Affiliated Tribes
 Extensive scoping to explain the PEA process and invite public
input on environmental issues
 Drilling was not delayed during preparation of the PEA
 Collateral benefit is a Programmatic Biological Assessment
that satisfies requirements of the Endangered Species Act for
those wells

31. Best Practices for NEPA Compliance for Oil
and Gas Development on Indian Lands
In addition to the lack of programmatic level NEPA documents,
some other issues commonly encountered in accomplishing
NEPA on Indian lands are:
 The relationship between the Tribes and BIA
 Distrust of oil companies and their consultants
 Unfamiliarity with and non-compliance with tribal laws
 Lack of consideration of environmental constraints during
project planning
 Choice of an EA or EIS for well field level NEPA review
 Delays and uncertain timeframes for reviews and decisions

32. Best Practices for NEPA Compliance for Oil
and Gas Development on Indian Lands
Issue 1: The relationship between the Tribes and BIA
Recommended BMP:
Understand that the Tribes and the Bureau of Indian Affairs (BIA)
are not the same thing, they have substantially different roles in
the leasing and permitting processes, and coordination with
both is critical.
 Tribes are sovereign nations that have self-determination
rights to manage their resources and be consulted regarding
potential impacts to culturally important sites both within and
outside reservation boundaries.
 The BIA has trust responsibilities for Tribes and tribal
members, including ensuring compliance with NEPA.

33. Best Practices for NEPA Compliance
Issue 2: Distrust of oil companies and their consultants
Recommended BMPs:
Get to know your tribal hosts and bring them on board
 Introduce yourself and your personnel who are likely to
interact with tribal members, to the chairman, the council, and
committees that address mineral and business development.
 As soon as a drilling or development plan is roughed out, meet
with the tribes’ mineral manager, the natural resources
director, and the tribal chairman to showcase the plan
 In company with the tribal chairman, request a tribal
resolution supporting the drilling or development plan
 Offer multiple scoping meetings and contact information
throughout the NEPA project

34. Best Practices for NEPA Compliance
Issue 3: Non-compliance with tribal laws
Recommended BMPs:
Ensure that any required business license, Tribal Employment
Rights Ordnance (TERO), and other tribal permits are obtained
and kept current.
 Determine whether your contractors are covered under
your TERO license; if not, require proof of the
contractors’ compliance before allowing work on the
reservation. NEPA itself is primarily a desk-top exercise,
but associated biological, cultural resource, and other
field investigations are subject to TERO licensing.
 Work with the TERO office to determine if tribal
members have skill sets and experience suitable for
employment on your projects.

35. Best Practices for NEPA Compliance for Oil
and Gas Development on Indian Lands
Issue 4: Lack of consideration of environmental
constraints during project planning
Recommended BMPs:
 Conduct a constraints analysis for environmental
factors as part of initial project planning.
 Specifically address:
 Threatened, Endangered, Candidate species and other
species of concern. Do avoidance or special
treatment areas exist within the project footprint?

36. Best Practices for NEPA Compliance
Issue 4, cont.
Recommended BMPs:
 Timing of proposed construction and operations in regard to
breeding, nesting and birthing seasons, but also lambing and
calving seasons and use of critical habitat by multiple species
 Extent and timing of road use
 Wetlands and crossings of Waters of the United States
 Cultural resources
 Air quality issues in the project area
 All of this background research is applicable to preparation
of an EA or EIS.

37. Best Practices for NEPA Compliance
Issue 4, cont.
Recommended BMPs:
 Re-design the project as necessary and possible to
address the environmental constraints before an initial
presentation of the project to the lead Federal agency.
 First impressions set the tone for interaction and buy-in
from agency staff – come in with a project that has the
least possible contentious issues for the agency technical
staff and their NEPA project manager (hence, less work
for them).
 Request and respond to contributions from the BIA
regional and agency staff and the Tribe regarding the
project, well in advance of initiation of a NEPA EA or EIS.

38. Best Practices for NEPA Compliance
Issue 5: Choice of EA or EIS for NEPA Review
Recommended BMP:
 Request an EA rather than an EIS unless the project will
definitely have a significant environmental impact that
can’t be mitigated, or unless the BIA insists on an EIS. An
adequately prepared EA will:
 Provide the same level of environmental protection as an
EIS
 Require substantially less cost and time than an EIS.
 Provide a collaborative opportunity for the proponent,
the BIA, Tribes, and consulting parties to redesign the
project to reduce impacts to non-significant if possible.

39. Best Practices for NEPA Compliance
Issue 5: Choice of EA or EIS for NEPA Review, cont.
Recommended BMP:
 If the responsible Federal agency cannot issue a FONSI and an
EIS is required, research and analysis conducted for the EA is
applicable to the EIS. The EIS can then focus on the
unresolved impacts.
 Preparation of an EIS assumes that a project may have
significant environmental impacts, and it necessarily works
with a fairly static project description.
 The 3rd party preparer of an EIS is expected to be at “arms
length” from the proponents and the responsible Federal
agency, which can further diminish effective cooperation to
resolve issues.

40. Best Practices for NEPA Compliance
Issue 6: Delays and uncertain timeframes for reviews and
decisions
Recommended BMP:
 Recognize that permitting on trust lands will take longer than
permitting on private lands, other Federal lands, or even private lands
within reservation boundaries.
 In cooperation with the BIA and the Tribes, make it an initial priority
to establish a reasonable timeline for NEPA analysis, other
permitting, and execution of mitigation commitments.
 Target dates for deliverables and review periods help agency staff
allocate time, which ultimately helps keep the project on schedule.
 A proponent-created schedule that doesn’t fit agency availability is
worthless and frustrating, and it ultimately results in additional costs

41. Best Practices for NEPA Compliance for Oil
and Gas Development on Indian Lands
Conclusions:
 Indian lands in Montana hold promise for substantial
expansion of oil and gas development – at least 4 reservations
are currently producing and large areas are either unleased or
are not being actively developed.
 Application of programmatic level NEPA review, particularly
Programmatic Environmental Assessments, in concert with
other Best Management Practices, holds promise to invigorate
exploration and development.
 Expansion of oil and gas operations on Indian lands ultimately
benefits all of us.