Procedural Changes to the Coastal Zone Management Act Federal Consistency Process

AGENCY:

Office for Coastal Management, National Ocean Service, National Oceanic Atmospheric Administration (NOAA), Department of Commerce.

ACTION:

Advance notice of proposed rulemaking.

SUMMARY:

The National Oceanic and Atmospheric Administration (NOAA) is issuing this advance notice of proposed rulemaking (ANPR) to seek the public and regulated community's input on what changes could be made to NOAA's Coastal Zone Management Act (CZMA) federal consistency regulations to make the federal consistency process more efficient across all stages of OCS oil and gas projects from leasing to development, as well as renewable energy projects. NOAA is also seeking comments on whether NOAA could process appeals in less time and increase the predictability in the outcome of an appeal. NOAA further invites comment on the potential costs that could be incurred by small entities during CZMA consistency appeals if NOAA revises the federal consistency regulations to provide greater efficiency and predictability as discussed in this Notice.

DATES:

Comments on this ANPR must be received by April 25, 2019.

ADDRESSES:

You may submit comments on this advance notice of proposed rulemaking (ANPR), identified by NOAA-NOS-2018-0107 by either of the following methods:

• Electronic Submission: Submit all electronic public comments via the Federal e-Rulemaking Portal www.regulations.gov . To submit comments via the e-Rulemaking Portal, first click the “Submit a Comment” icon, then enter NOAA-NOS-2018-0107 in the keyword search. Locate the document you wish to comment on from the resulting list and click on the “Submit a comment” icon on the right of that line.
• Mail: Submit written comments to Mr. Kerry Kehoe, Federal Consistency Specialist, Office for Coastal Management, NOAA, 1305 East-West Highway, 10th Floor, N/OCM6, Silver Spring, MD 20910. Attention: CZMA Federal Consistency ANPR Comments.

Instructions: Comments must be submitted by one of the above methods to ensure that the comments are received, documented, and considered by NOAA. Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered. All comments received are a part of the public record and will generally be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address) submitted voluntarily by the sender will be publicly accessible. Do not submit confidential business information, or otherwise sensitive or protected information. NOAA will accept anonymous comments (enter “N/A” in the required fields if you wish to remain anonymous).

FOR FURTHER INFORMATION CONTACT:

Mr. David Kaiser, Senior Policy Analyst, Office for Coastal Management, NOAA, at 603-862-2719, david.kaiser@noaa.gov, or Mr. Kerry Kehoe, Federal Consistency Specialist, Office for Coastal Management, NOAA, at 240-533-0782, kerry.kehoe@noaa.gov.

SUPPLEMENTARY INFORMATION:

I. Background

Unless otherwise specified, the term “NOAA” refers to the Office for Coastal Management, within NOAA's National Ocean Service. The Office for Coastal Management formed in 2014 through the merger of the former Office of Ocean and Coastal Resource Management and the Coastal Services Center. Unless otherwise specified, the term “Secretary” refers to the Secretary of Commerce.

The Coastal Zone Management Act. The CZMA (16 U.S.C. 1451-1466) was enacted on October 27, 1972, to encourage coastal states, Great Lake states, and United States territories and commonwealths (collectively referred to as “coastal states” or “states”) to be proactive in managing the uses and resources of the coastal zone for their benefit and the benefit of the Nation. The CZMA recognizes a national interest in the uses and resources of the coastal zone and in the importance of balancing the competing uses of coastal resources. See 16 U.S.C. 1451. The CZMA established the National Coastal Zone Management Program, a voluntary program for states. If a state decides to participate in the program, it must develop and implement a comprehensive management program pursuant to federal requirements. See CZMA § 306(d) (16 U.S.C. 1455(d)); 15 CFR part 923. Of the thirty-five coastal states that are eligible to participate in the National Coastal Zone Management Program, thirty-four have federally-approved management programs. Alaska is currently not participating in the program.

Federal Consistency. The CZMA federal consistency provision is an important component of the National Coastal Zone Management Program and is a key incentive for states to join the Program. See CZMA § 307 (16 U.S.C. 1456) and NOAA's regulations at 15 CFR part 930. Federal consistency is the CZMA provision that federal actions (inside or outside a state's coastal zone) that have reasonably foreseeable effects on any land or water use or natural resource of the affected state's coastal zone must be consistent with the enforceable policies of the affected state's federally approved CZMA program. Se e CZMA § 307 (16 U.S.C. 1456) and 15 CFR part 930. See NOAA's federal consistency website for additional information, https://www.coast.noaa.gov/czm/consistency/ (last visited February 6, 2019).

The CZMA and NOAA's implementing regulations describe four types of federal actions for CZMA federal consistency purposes.

1. Federal agency activities and development projects (CZMA § 307(c)(1), (2); 15 CFR part 930, subpart C).

2. Federal license or permit activities (non-federal applicants) (CZMA § 307(c)(3)(A); 15 CFR part 930, subpart D).

3. Outer Continental Shelf exploration, development and production plans (similar to the procedures in subpart D) (CZMA § 307(c)(3)(B); 15 CFR part 930, subpart E).

4. Federal financial assistance to state or local agencies (CZMA § 307(d); 15 CFR part 930, subpart F).

It is important to understand that the applicable subparts of NOAA's federal consistency regulations for these four categories of federal actions (subparts C, D, E, and F) differ with regard to: Terminology; who decides whether there are coastal effects; procedural timeframes and information requirements; standards of consistency (i.e., “fully consistent” versus “consistent to the maximum extent practicable”); state objection requirements; and the consequences of state objections. Below is a table summarizing some of the key differences between subpart C (federal agency activities), subpart D (federal license or permit activities) and subpart E (OCS plans). Subparts D and E are similar in requirements. Note that subpart F is not discussed in detail in this ANPR as it has limited, or no, connection to renewable energy or OCS oil and gas projects.

Federal Consistency Standards. In accordance with the CZMA and NOAA's regulations at 15 CFR part 930, federal license or permit activities (subpart D), and OCS exploration plans, and development and production plans (subpart E) must be fully consistent with the enforceable policies of a state's federally approved CZMA program. If the affected state objects to the proposed activity after concluding it is not fully consistent with the state's enforceable policies, the federal agency may not authorize the activity unless the Secretary of Commerce overrides the state's objection on appeal by the applicant. 16 U.S.C. 1456(c)(3).

For federal agency activities and development projects (subpart C), the “consistent to the maximum extent practicable” standard applies. When such activities are subject to federal consistency review, they shall be carried out in a manner that is consistent to the maximum extent practicable with the enforceable policies of a state's federally approved CZMA program. 16 U.S.C. 1456(c)(1)(A). NOAA defines “consistent to the maximum extent practicable” at 15 CFR 930.32, which requires that federal agencies be “fully consistent” “unless full consistency is prohibited by existing law applicable to the Federal agency.” This determination is made by the federal agency. In its 2000 and 2006 final rules, NOAA clarified how the “consistent to the maximum extent practicable” standard applies. The 2000 rule, in response to requests by Federal agencies, explained that Federal agencies can proceed over a state's objection, due to an unforeseen circumstance or emergency, or when a Federal agency asserts, based on its own administrative decision record, it is fully consistent even if the state disagrees, or the requirements of other federal law prevent full consistency. See 65 FR 77123, 77133-34 and 77142-43 (Dec. 8, 2000), and 71 FR 787, 802 (comments 5 and 6) and 809 (comment 35) (Jan. 5, 2006). These two Federal Register documents are on NOAA's website at: https://www.coast.noaa.gov/czm/consistency/media/frfinal.pdf and https://www.coast.noaa.gov/czm/consistency/media/finalrulefedregjan05_06.pdf (both last visited February 6, 2019).

Federal Consistency and the Outer Continental Shelf Lands Act (OCSLA). The CZMA is intertwined with the OCSLA's oil and gas leasing and development program. The CZMA and its implementing regulations specifically describe how the CZMA federal consistency provisions apply to OCS oil and gas leasing, exploration, and development. The OCSLA and its implementing regulations prohibit the Secretary of the Interior from permitting any activity provided in either an Exploration Plan, a Development and Production Plan, or a Development Operations and Coordination Document, unless the coastal state concurs or is conclusively presumed to concur with the CZMA consistency certification accompanying the plan. If the coastal state objects to the CZMA consistency certification, the Secretary of the Interior may still permit such activity if, on appeal by the applicant, the Secretary of Commerce finds that such activity is consistent with the objectives of the CZMA or is otherwise necessary in the interest of national security. See 16 U.S.C. 1456(c)(3)(B)(iii); s ee also 43 U.S.C. 1340(c)(2), 1351(d) and (h). (A Development Operations and Coordination Document is the equivalent of a Development and Production Plan in the Western Gulf of Mexico.) The OCSLA expressly references the relevant sections of the CZMA.

Below is a brief description of how the CZMA applies to the four primary stages of OCS oil and gas activity. The four primary OCS oil and gas stages and the applicable subpart of NOAA's regulations are: (1) National OCS Oil and Gas Leasing Program (no CZMA review); (2) OCS Oil and Gas Lease Sale (subpart C); (3) Exploration Plan (subpart E); and (4) Development and Production Plan or Development Operations and Coordination Document (subpart E). Below is also a description of the various ways in which geological and geophysical seismic surveys may be subject to state CZMA review.

National OCS Oil and Gas Leasing Program (National OCS Program). CZMA federal consistency does not apply to the National OCS Program. The Bureau of Ocean Energy Management (BOEM), with NOAA's concurrence, determined that the National OCS Program is not a “proposal for action” under NOAA's CZMA regulations as a lease sale may not happen and any future coastal effects are too speculative at the National OCS Program stage. See 71 FR 787, 792 (Jan. 5, 2006), https://www.coast.noaa.gov/czm/consistency/media/finalrulefedregjan05_06.pdf (last visited February 6, 2019).

OCS Oil and Gas Lease Sale (16 U.S.C. 1456(c)(1); 15 CFR part 930, subpart C). An OCS oil and gas lease sale is a federal agency activity under CZMA § 307(c)(1) and subpart C of NOAA's regulations. If BOEM holds a lease sale, BOEM determines which states are affected and provides those states with a consistency determination for review and concurrence, objection, or presumed concurrence if there is no response within the regulatory timeframe. If a state objects to BOEM's consistency determination, BOEM can still proceed with the lease sale if BOEM determines it is “consistent to the maximum extent practicable” with the state's coastal management program. Because OCS oil and gas lease sales are subject to subpart C of the federal consistency regulations, there is no right of appeal to the Secretary of Commerce if a state objects to BOEM's consistency determination. Rather, BOEM may decide to proceed over the state's objection and hold a lease sale under the consistent to the maximum extent practicable standard if BOEM determines the lease sale: (1) Is fully consistent with the enforceable policies of the state's management program; or (2) BOEM is legally prohibited from being fully consistent. 15 CFR 930.43(d).

Once a lease sale is granted it gives the lessee the authority to conduct on-lease ancillary activities, such as geological and geophysical (G&G) seismic surveys on the lease blocks acquired. BOEM requires the submittal of an Exploration Plan for certain on-lease ancillary activities. These on-lease activities are considered as part of a state's CZMA review during the lease sale or later during review of an Exploration Plan. A BOEM permit may be required for certain off-lease G&G surveys under 30 CFR part 551. An off-lease G&G survey is a survey that is not part of a lease sale or Exploration Plan. In these instances, states would not have the ability to review G&G surveys in a lease sale or Exploration Plan. However, as discussed further below, states may have the ability to review off-lease G&G survey activities as a federal license or permit activity in accordance with NOAA's regulations at 15 CFR part 930, subpart D.

Exploration Plan (16 U.S.C. 1456(c)(3)(B); 15 CFR part 930, subpart E). If an OCS oil and gas lessee decides to commence exploration on a lease, the lessee is required to propose an Exploration Plan to BOEM. Depending on the location of the proposed Exploration Plan, CZMA § 307(c)(3)(B) requires that the lessee/applicant submit a consistency certification to the affected state(s), through BOEM. If a state objects to a consistency certification for an Exploration Plan, BOEM cannot authorize exploration activities unless the applicant appeals the state objection to the Secretary of Commerce pursuant to 15 CFR part 930, subpart H and the Secretary overrides the state's CZMA objection. Alternatively, the state, applicant, and BOEM could reach an agreement such that the state would remove its objection, allowing BOEM to authorize exploration activities. This agreement could occur before or during an appeal.

Development and Production Plan or Development Operations and Coordination Document (16 U.S.C. 1456(c)(3)(B); 15 CFR part 930, subpart E, and 30 CFR part 550, subpart B). If a lessee completes its exploration activities and decides to extract oil and gas for production, it must provide BOEM with a Development and Production Plan or a Development Operations and Coordination Document (for the Western Gulf of Mexico). CZMA § 307(c)(3)(B) requires that the lessee/applicant submit a consistency certification to the affected state(s), through BOEM, for the Development and Production Plan or Development Operations and Coordination Document, just as it does for the Exploration Plan. Depending on the location of the development, one or more states will receive a consistency certification from the applicant, through BOEM. If a state objects to a consistency certification for a Development and Production Plan or Development Operations and Coordination Document, BOEM cannot authorize development and production unless the applicant appeals the state objection to the Secretary of Commerce pursuant to 15 CFR part 930, subpart H and the Secretary overrides the state's CZMA objection. Alternatively, the state, applicant, and BOEM could reach an agreement such that the state would remove its objection, allowing BOEM to authorize exploration activities. This agreement could occur before or during an appeal.

Geological and Geophysical Permits for Off-lease Activities (16 U.S.C. 1456(c)(3)(A); 15 CFR part 930, subpart D and 30 CFR part 551). Off-lease G&G surveys, as well as those conducted on lands under lease to a third party, require a permit from BOEM under 30 CFR part 551. Off-lease G&G surveys are surveys that are not authorized by BOEM, or reviewed by states for federal consistency, as part of a lease sale or Exploration Plan. These G&G permit applications may be subject to the CZMA federal consistency process as a federal license or permit activity pursuant to NOAA's regulations at 15 CFR part 930, subpart D. A consistency certification is required for these off-lease G&G permits if the state has, pursuant to 15 CFR 930.53, (1) listed the G&G permits in the state's NOAA-approved federal consistency list, and (2) included a geographic location description in its coastal management program. If not, then a state would need to request NOAA approval to review off-lease G&G permit applications on a case-by-case basis as an unlisted activity under 15 CFR 930.54. If a state objects to a consistency certification for a G&G permit under 30 CFR part 551, BOEM cannot authorize the activity unless the applicant appeals the state objection to the Secretary of Commerce pursuant to 15 CFR part 930, subpart H and the Secretary overrides the state's CZMA objection. Alternatively, the state, applicant, and BOEM could reach an agreement such that the state would remove its objection, allowing BOEM to authorize exploration activities. This agreement could occur before or during an appeal.

Federal Consistency Appeal Process. The CZMA appeal process is available to non-federal applicants for federal license and permit activities (subpart D), OCS Exploration, Development and Production Plans (subpart E), and federal financial assistance (subpart F). The appeal process takes 265 to 325 days to complete. Congress added this timeframe to the CZMA in the Energy Policy Act of 2005, Pub. L. 109-58, and NOAA added the timeframe to NOAA's regulations at 15 CFR part 930, subpart H in NOAA's 2006 rulemaking, 71 FR 75864. Historically, state objections to Exploration Plans or Development and Production Plans do not happen very often. As noted in NOAA's 2006 final rule:

Since 1978, [BOEM] has approved over 10,600 [Exploration Plans] and over 6,000 [Development and Production Plans]. States have concurred with nearly all of these plans. In the 30-year history of the CZMA, there have been only 18 instances where the offshore oil and gas industry appealed a State's federal consistency objection to the Secretary of Commerce. The Secretary issued a decision in 14 of those cases. The Secretary did not issue a decision for the other 4 OCS appeals because the appeals were withdrawn due to settlement negotiations between the State and applicant or a settlement agreement between the Federal Government and the oil companies involved in the projects. Of the 14 decisions (1 [Development and Production Plan] and 13 [Exploration Plans]), there were 7 decisions to override the State's objection and 7 decisions not to override the State.

71 FR 787, 791 (Jan 5, 2006). These numbers are still valid. The most recent Secretarial appeal of an OCS oil and gas plan was in 1999. See NOAA's CZMA appeal spreadsheet for more information on CZMA appeals at https://www.coast.noaa.gov/czm/consistency/media/appealslist.pdf (last visited February 6, 2019).

NOAA's 2006 Final Rule. NOAA revised its CZMA federal consistency regulations in 2006 to address concerns raised by the energy industry, particularly regarding OCS oil and gas, in response to the 2001 Vice President's Energy Policy Report, and the Energy Policy Act of 2005. The 2006 revision was finalized after close coordination with the Department of the Interior, the Department of Energy, and with substantial input by the energy industry and the coastal states. See NOAA's final rule published in the Federal Register, 71 FR 787 (Jan. 5, 2006), https://www.coast.noaa.gov/czm/consistency/media/finalrulefedregjan05_06.pdf (last visited February 6, 2019). NOAA's 2006 final rule removed uncertainties in various time frames in the regulations, provided an expedited and date-certain period for processing CZMA consistency appeals, and provided industry with greater transparency and predictability in the CZMA process. The CZMA Secretarial appeals process deadlines were mandated by amendments to the CZMA by the Energy Policy Act of 2005, amending 16 U.S.C. 1465 (appeals to the Secretary) and adding section 1466 (appeals relating to offshore mineral development). At that time, NOAA evaluated the rulemaking in the context of what changes could be made without statutory amendments.

II. Action Requested From the Public

In accordance with Executive Order 13795, this Advance Notice of Proposed Rulemaking seeks the public and regulated community's input on what changes could be made to NOAA's CZMA federal consistency regulations at 15 CFR part 930 to make the consistency process more efficient across all stages of OCS oil and gas projects from leasing to development or renewable energy projects. Any input should be consistent with statutory provisions regarding the CZMA review of OCS oil and gas lease sales, Exploration Plans, Development and Production Plans, Development Operations and Coordination Documents, G&G permits, and appeals to the Secretary of Commerce. NOAA recommends that anyone providing input review NOAA's 2006 final rule discussed above. NOAA notes that addressing these questions could result in a proposed rule that includes numerous regulatory modifications that could also apply to other types of federal actions and not just renewable or non-renewable energy projects.

NOAA is interested in the public and regulated community responses to the following statements.

1. What changes could be made to NOAA's federal consistency regulations at 15 CFR part 930 that could streamline federal consistency reviews and provide industry with greater predictability when making large investments in offshore renewable and non-renewable energy development?

2. NOAA is seeking comments on whether and how NOAA could achieve greater efficiency to process an appeal in less time and increase predictability in the outcome of an appeal—while continuing to meet the requirements and purposes of the CZMA—by limiting the Secretary of Commerce's review of an appeal of a state's objection to an OCS oil and gas Development and Production Plan or Development Operations and Coordination Document, to information that the Secretary of Commerce had not previously considered in an appeal of an OCS oil and gas Exploration Plan for the same lease block.

In addition, NOAA requests any comment on the types of new information that may be produced at different stages of OCS oil and gas projects to provide an indication of what information may be relevant to subsequent appeals. For example, a state may object under the CZMA to an OCS oil and gas Exploration Plan and the applicant may then appeal the objection to the Secretary of Commerce and the Secretary could override the state's objection. The applicant could then complete its exploration activities and then submit to BOEM a Development and Production Plan or Development Operations and Coordination Document and the state could again issue a CZMA objection. In this scenario, there may be a substantial amount of technical, environmental, safety, national interest, and alternative analysis information and review by BOEM, other federal agencies, the states, NOAA and Commerce for the Exploration Plan and for an appeal of a state CZMA objection to an Exploration Plan. This information may be similar or the same as that developed for an appeal of a state CZMA objection to the later Development and Production Plan or Development Operations and Coordination Document for the same lease block. Therefore, NOAA is seeking comment on whether, in such a situation, it is efficient and effective to use the Secretary's override of the Exploration Plan as a precedent and limit the Secretary's review of an appeal of a state's objection to an OCS oil and gas Development and Production Plan or Development Operations and Coordination Document to information and issues not previously considered by the Secretary when deciding an appeal regarding the OCS Exploration Plan.

3. When an applicant seeks Secretarial review of a state CZMA federal consistency objection, the CZMA requires the Secretary to collect appeal fees from the applicant. 16 U.S.C. 1456(i). The fees include an “application fee of not less than $200 for minor appeals and not less than $500 for major appeals, unless the Secretary, upon consideration of an applicant's request for a fee waiver, determines that the applicant is unable to pay the fee.” 16 U.S.C. 1456(i)(1). Under NOAA's regulations, an appeal involving a project valued in excess of $1 million is considered major. 15 CFR 930.125(c).

In addition to the application fee, the Secretary is also directed to collect such other fees as are necessary to recover the full costs of administering and processing appeals of a state CZMA federal consistency objection. 16 U.S.C. 1456(i)(2)(A) and 15 CFR 930.126. However, if the Secretary waives the application fee for an applicant, the Secretary shall waive all other fees for the applicant. 16 U.S.C. 1456(i)(2)(B).

Under the Regulatory Flexibility Act (RFA), at a proposed rule stage NOAA must determine whether the rule, if adopted, would have a significant economic impact on a substantial number of small entities. The term “small entity” includes small businesses, small organizations, and small governmental jurisdictions. State and federal agencies and private landowners are not small entities under the RFA.

NOAA has stated for past CZMA federal consistency rulemakings that the federal consistency process and appeals to the Secretary do not have a significant impact on small entities and anticipates the same finding would be reached for a proposed rule based upon this document. See e.g., 65 FR 20270, 20280-81 (Apr. 14, 2000). However, NOAA invites comment on the potential costs that could be incurred by small entities during CZMA consistency appeals if NOAA revises the federal consistency regulations to provide greater efficiency and predictability as discussed in this document.

Comments submitted to NOAA will help us determine whether to propose changes to the CZMA federal consistency regulations. Any proposed changes to the federal consistency regulations would be published in the Federal Register as a proposed rule following compliance with the Administrative Procedures Act (5 U.S.C. 553) and other relevant statutes and executive orders.

This regulatory action is significant for purposes of Executive Order 12866.