[Federal Register Volume 67, Number 127 (Tuesday, July 2, 2002)]
[Proposed Rules]
[Pages 44407-44410]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-16417]


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DEPARTMENT OF COMMERCE

National Oceanic Atmospheric Administration

15 CFR Part 930

[Docket No. 020422093-2093]
RIN 0648-AP98


Procedural Changes to the Federal Consistency Process

AGENCY: Office of Coastal Resource Management (OCRM), National Ocean 
Service (NOS), National Oceanic Atmospheric Administration (NOAA), 
Department of Commerce (Commerce).

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: NOAA is evaluating whether limited and specific procedural 
changes or guidance to the existing Federal consistency regulations are 
needed to improve efficiencies in the Federal consistency procedures 
and Secretarial appeals process, particularly for energy development on 
the Outer Continental Shelf (OCS). This advance notice of proposed 
rulemaking requests public comment on the need for limited and specific 
changes or guidance on what such changes or guidance should be.

DATES: Comments on this advance notice of proposed rulemaking must be 
received by September 3, 2002.

ADDRESSES: Address all comments regarding this advance notice of 
proposed rulemaking to David Kaiser, Federal Consistency Coordinator, 
Coastal Programs Division, Office of Ocean and Coastal Resource 
Management, NOAA, 1305 East-West Highway, 11th Floor, Silver Spring, MD 
20910. Attention: Federal Consistency Energy Review Comments.

FOR FURTHER INFORMATION CONTACT: David Kaiser, Federal Consistency 
Coordinator, Office of Ocean and Coastal Resource Management, NOAA, 
301-713-3155 ext. 144.

SUPPLEMENTARY INFORMATION:

I. Background

    For nearly 30 years the Coastal Zone Management Act (CZMA) has met 
the needs of coastal States and Territories (referred to as States), 
Federal agencies, industry and the public to balance the protection of 
coastal resources with coastal development, including energy 
development. The CZMA requires States to adequately consider the 
national interest in the siting of energy facilities in the coastal 
zone through the development and implementation of their federally 
approved State Coastal Management Programs (CMPs). States have 
collaborated with industry on a variety of energy facilities, including 
oil and gas pipelines, nuclear power plants, hydroelectric facilities, 
and alternative energy development. States have reviewed and approved 
thousands of offshore oil and gas facilities and related onshore 
support facilities. On December 8, 2000, NOAA issued a comprehensive 
revision to the Federal Consistency regulations, which reflected 
substantial effort and participation by Federal agencies, States, 
industry, and the

[[Page 44408]]

public, over a five year period. Given this recent broad-based review, 
NOAA is not re-evaluating the 2000 final rule, rather it is considering 
whether limited modifications are needed to address the specific 
concerns discussed in this advance notice.

II. History of the CZMA and NOAA's Federal Consistency Regulations.

    The CZMA was enacted in 1972 to encourage States to be proactive in 
managing natural resources for their benefit and the benefit of the 
Nation. The CZMA recognizes a national interest in the resources of the 
coastal zone and in the balancing of competing uses of those resources. 
The CZMA is a voluntary program for States. If a State elects to 
participate it must develop and implement a CMP pursuant to federal 
guidelines. State CMPs are comprehensive management plans that describe 
the uses subject to the management program, the authorities and 
enforceable policies of the management program, the boundaries of the 
State's coastal zone, the organization of the management program, and 
other State coastal management concerns. The State CMPs are developed 
with the participation of Federal agencies, industry, other interested 
groups and the public. Once the Secretary of Commerce approves a 
State's CMP, then the CZMA Federal Consistency provision applies. 
Federal Consistency is a limited waiver of federal supremacy and 
authority. Federal agency activities that have coastal effects must be 
consistent to the maximum extent practicable with the federally 
approved enforceable policies of the State's CMP. In addition, non-
Federal applicants for federal approvals and funding must be fully 
consistent with the enforceable policies of State CMPs. The Federal 
Consistency provision is a cornerstone of the CZMA program and a 
primary incentive for States to participate. While States have 
negotiated changes to thousands of federal actions over the years, 
States have concurred with approximately 93% of all federal actions 
reviewed. Thirty-five States, Great Lake States and United States Trust 
Territories and Commonwealths (collectively referred to as ``coastal 
States'' or ``States'') are eligible to participate. Thirty-three of 
the eligible coastal States have federally approved CMPs. Indiana is 
developing a program and Illinois is not currently participating.
    NOAA's Federal Consistency regulations, first promulgated in 1979, 
provide reliable procedures and predictability to the implementation of 
Federal Consistency. The regulations operated well for the Federal and 
State agencies and permit applicants and provided a reasonable 
interpretation of the CZMA's broad requirements. When Congress amended 
the CZMA in 1990, it specifically endorsed NOAA's consistency 
regulations and interpretation of the CZMA. However, changes to the 
CZMA in 1990 and 1996 made clear that revisions to the regulations were 
needed.
    In late 1996, OCRM began a process to revise the regulations by 
informally consulting and collaborating with Federal agencies, States, 
industry, Congress, and other interested parties. NOAA submitted two 
sets of draft rules to States, Federal agencies and others for comments 
and produced written responses to comments to each draft, before 
proposing a rule in April 2000. NOAA evaluated comments on the proposed 
rule and published a final rule on December 8, 2000, which became 
effective on January 8, 2001.
    Most of the changes in the revised regulations were dictated by 
changes in the CZMA or by specific statements in the accompanying 
legislative history. For instance, the new regulations added language 
concerning the scope of the Federal Consistency ``effects test.'' Prior 
to the 1990 amendments, Federal agency activities ``directly 
affecting'' the coastal zone were subject to Federal Consistency. The 
amendments broadened this language by dropping the word ``directly'' to 
include projects with ``effects'' on any land or water use or natural 
resource of the coastal zone. Other changes in the 2000 final rule 
improved and clarified procedural efficiencies and processes and made 
changes based on long-standing interpretive practice by NOAA.

III. The Role of the CZMA in OCS Energy Development

    In February 2001, the Administration established the National 
Energy Policy Development Group to bring together business, government, 
local communities and citizens to promote a dependable, affordable, and 
environmentally sound National Energy Policy. Vice-President Cheney 
submitted the Group's Report (Energy Report) to President Bush on May 
16, 2001.
    The Energy Report contains numerous recommendations for obtaining a 
long-term, comprehensive energy strategy to advance new, 
environmentally beneficial technologies to increase energy supplies and 
encourage less polluting, more efficient energy use. The CZMA and the 
Outer Continental Shelf Lands Act (OCSLA), a statute administered by 
the Minerals Management Service (MMS) within the Department of the 
Interior (DOI), are specifically mentioned. Energy Report at 5-7.
    This advance notice is part of NOAA's evaluation of the Energy 
Report and NOAA's ongoing responsibility to address the national 
interest in effective coastal management. When States develop and amend 
their CMPs, and when making coastal management decisions, the CZMA 
requires State CMPs to adequately consider the national interest in the 
CZMA objectives and to give priority consideration to coastal dependant 
uses and processes for facilities related to national defense, energy, 
fisheries, recreation, ports and transportation.
    The CZMA and the OCSLA interact both by explicit cross-reference in 
the statutes and through their regulatory implementation. Both statutes 
mandate State review of OCS oil and gas Exploration Plans (EPs) and 
Development and Production Plans (DPPs). Both statutes and their 
corresponding regulations provide a compatible and interrelated process 
for States to review EPs and DPPs. The Energy Report identifies 
potential lack of effectiveness in the CZMA-OCSLA interaction resulting 
from a lack of clearly defined requirements and information needs from 
Federal and State entities, as well as uncertain deadlines for 
completing the procedures of both statutes. Energy Report at 5-7.
    The CZMA requires that when a lessee seeks MMS approval for its EP 
or DPP, the lessee must certify to the affected State(s) that 
activities covered in the plans are fully consistent with the 
enforceable policies of the State's CMP. If the State objects to the 
consistency certification, then MMS is prohibited from approving the 
activities described in detail in the EP or DPP. The lessee may appeal 
to the Secretary of Commerce to override the State objection and allow 
MMS to issue the approval. When deciding an appeal, the Secretary 
balances the national interest of the energy development against 
adverse effects on coastal resources and coastal uses. When MMS offers 
an OCS lease sale, it is considered a federal agency activity. If MMS 
determines that the lease sale will have reasonably foreseeable coastal 
effects, then MMS must provide a CZMA consistency determination to the 
affected State(s) stating whether the lease sale is ``consistent to the 
maximum extent practicable'' with the enforceable policies of the 
State's CMP. If the State objects, MMS may still proceed with the lease 
sale if MMS can show that it is

[[Page 44409]]

fully consistent or consistent to the maximum extent practicable.
    There are several safeguards within the CZMA and NOAA's regulations 
to ensure that Federal requirements are met and that the national 
interest in the CZMA objectives is furthered. These safeguards are 
discussed below using OCS oil and gas activities to illustrate.
    The ``Effects Test.'' As discussed above, Federal Consistency 
review is triggered only when a federal action has reasonably 
foreseeable coastal effects, referred to as the ``effects test.'' 
Consistency does NOT apply to everything a Federal agency, or a non-
federal applicant for federal approvals, does in or near a coastal 
State.
    For OCS oil and gas lease sales, MMS determines which States will 
be affected and provides only those States with a Consistency 
Determination. For example, in the Gulf of Mexico, MMS has established 
the Eastern Planning, Central Planning and Western Planning Areas. MMS 
usually finds that lease sales in the Central and Western Planning 
Areas will not have reasonably foreseeable effects on Florida coastal 
uses or resources (within the Eastern Planning Area) and does not 
provide Florida with a Consistency Determination.
    For OCS EPs and DPPs the CZMA mandates, as a general matter, State 
consistency review. However, as with Federal agency activities, a 
coastal State's ability to review the Plans stops where coastal effects 
are not reasonably foreseeable. For example, in the Gulf of Mexico, 
Florida reviews OCS Plans in the Eastern Planning Area, and only 
reviews an OCS Plan in the Central Planning Area if effects to 
Florida's coastal uses or resources are reasonably foreseeable. 
Usually, an OCS oil and gas activity in the Central Planning Area will 
be beyond the point where the activity will affect Florida. The State 
of Texas (in the Western Planning Area) does not usually review an OCS 
oil and gas activity proposed for the Eastern Planning Area because 
coastal effects in Texas are not reasonably foreseeable.
    Under the CZMA and NOAA's regulations, if Florida wanted to review 
OCS plans in the Central Planning Area, or if Texas wanted to review 
OCS plans in the Eastern Planning Area, they could, if NOAA approved, 
amend their CMP to describe an area within the particular Planning Area 
as a geographic location where the plans are subject to State review. 
Or, the States could request approval from NOAA on a case by case 
basis. In both cases, NOAA would approve only if the States could show 
that effects on their coastal uses or resources are reasonably 
foreseeable as a result of an activity in the described geographic 
location.
    NOAA Approval of State CMPs. NOAA, with substantial input from 
Federal agencies, local governments, industry, non-governmental 
organizations and the public, must approve State CMPs and their 
enforceable policies, including later changes to a State's CMP. For 
example, NOAA has denied State requests to include policies in its 
federally approved CMP that would prohibit all oil and gas development 
or facilities off its coast. NOAA has found that such policies conflict 
with the CZMA requirement that States consider the national interest in 
energy development and balance resource protection with coastal uses.
    Federal Agency Activities--``Consistent to the Maximum Extent 
Practicable and Fully Consistent.'' For Federal agency activities under 
CZMA section 307(c)(1), such as the OCS Lease Sales, the Federal agency 
may proceed with the activity over a State's objection if the Federal 
agency is Consistent to the Maximum Extent Practicable with the 
enforceable policies of the State's CMP. This means that even if a 
State objects, MMS may proceed with an OCS lease sale if MMS provides 
to the State the reasons why the OCSLA requires MMS to proceed, despite 
inconsistency with the State. MMS could also proceed if it determined 
it was fully consistent. Under NOAA's regulations, the consistent to 
the maximum extent practicable standard also allows Federal agencies to 
deviate from State enforceable policies and CZMA procedures due to 
unforeseen circumstances and emergencies.
    Appeal to the Secretary of Commerce. For non-federal applicants for 
federal approvals, such as OCS lessees, the applicant may appeal a 
State's objection to the Secretary of Commerce pursuant to CZMA 
sections 307(c)(3) and (d). The State's objection is overridden if the 
Secretary finds that the activity is consistent with the objectives or 
purposes of the CZMA or is necessary in the interest of national 
security. If the Secretary overrides the State's objection, then the 
Federal agency may issue its approval.
    Since 1978, MMS has approved over 10,600 EPs and over 6,000 DPPs. 
States have concurred with nearly all of these plans. In the history of 
the CZMA, there have been only 15 instances where the oil and gas 
industry appealed a State's Federal Consistency objection to the 
Secretary of Commerce. Of those 15 cases (2 DPPs and 13 EPs), there 
were 7 decisions to override the State's objection, 7 decisions not to 
override the State, and 1 decision pending. The record shows that 
energy development continues to occur, while reasonable State review 
ensures that the CZMA objectives have been met.
    Since 1990, when the CZMA Federal Consistency provision was 
amended, there have been several OCS oil and gas lease sales by MMS and 
only one State objection. However, in that one case OCRM determined 
that the State's objection was not based on enforceable policies. Thus, 
all lease sales offered by MMS since 1990 have proceeded under the 
CZMA. In addition, since 1990, there have been six State objections to 
Exploration Plans. In three of those cases, the Secretary did not 
override the State's objection. In two of the cases the Secretary did 
override the State, and one case is still pending before the Secretary.
    Mediation. While mediation is not technically a safeguard as those 
described above, it has been used to resolve Federal Consistency 
disputes and allowed Federal actions to proceed. In the event of a 
serious disagreement between a Federal agency and a State, either party 
may request that the Secretary of Commerce mediate the dispute. NOAA's 
regulations also provide for OCRM mediation to resolve disputes between 
States, Federal agencies, and others.

IV. Action Requested From the Public

    Because of the thoroughness of NOAA's efforts during the recent 
revision of the Federal Consistency regulations, and the importance of 
the CZMA Federal Consistency provision to the State-Federal 
partnership, NOAA is not considering significant changes to the Federal 
Consistency regulations. However, the Energy Report and recent public 
interest in the energy industry has highlighted the need to evaluate 
whether NOAA should make procedural adjustments to improve efficiency 
in the administration of the Federal Consistency provision. Therefore, 
NOAA is considering limited regulatory changes or additional policy 
guidance that will further improve the operation of Federal 
Consistency.
    NOAA is primarily addressing issues raised by the Energy Report 
which are related to the scope of information needed by the States and 
the Secretary in their respective reviews of OCS oil and gas activities 
on the OCS. NOAA is particularly concerned that the various timing 
requirements of the OCSLA, CZMA and their applicable regulations can 
result in procedural delays or delayed information requests. Under the 
existing regulations, the Federal Consistency review period starts when

[[Page 44410]]

the State agency receives the applicant's consistency certification, 
the OCS plan, and the necessary data and information described in 15 
CFR 930.58. The necessary data and information includes a detailed 
description of the activity, coastal effects, etc., and an evaluation 
relating the coastal effects to the enforceable policies of a State's 
CMP. This information is usually contained in the OCS plan and 
accompanying information. In addition, the necessary data and 
information can include information that is specifically identified in 
the State's CMP. NOAA's Federal Consistency regulations, 15 CFR 
930.77(a)(2), specify the information available for the State's review 
of OCS oil and gas plans:

    The State agency shall use the information submitted pursuant to 
the Department of the Interior's OCS operating regulations (see 30 
CFR 250.203 and 250.204) and OCS information program (see 30 CFR 
part 252) regulations and necessary data and information (see 15 CFR 
930.58).

    Despite this direction for information requirements, issues 
continue to arise as to the adequacy and types of information requested 
by and/or provided to the States. There are also instances where the 
State asks for additional information late in the CZMA review period. 
Frequently there is a time delay between the time a Federal agency or 
applicant for federal license or permit provides a coastal State with a 
consistency certification and the subsequent availability of routine 
environmental review documents such as National Environmental Policy 
Act (NEPA) compliance documents, reviews required under the Endangered 
Species Act (ESA) and related Clean Water Act (CWA) and/or Clean Air 
Act (CAA) reviews.
    To address these and other procedural issues, NOAA seeks comments 
from the public concerning the following:
     Whether NOAA needs to further describe the scope and 
nature of information necessary for a State CMP and the Secretary to 
complete their CZMA reviews and the best way of informing Federal 
agencies and the industry of the information requirements.
     Whether a definitive date by which the Secretary must 
issue a decision in a consistency appeal under CZMA sections 
307(c)(3)(A), (B) and 307(d) can be established taking into 
consideration the standards of the Administrative Procedures Act and 
which, if any, Federal environmental reviews should be included in the 
administrative record to meet those standards.
     Whether there is a more effective way to coordinate the 
completion of Federal environmental review documents, the information 
needs of the States, MMS and the Secretary within the various statutory 
time frames of the CZMA and OCSLA.
     Whether a regulatory provision for a ``general negative 
determination,'' similar to the existing regulation for ``general 
consistency determinations,'' 15 CFR 930.36(c), for repetitive Federal 
agency activities that a Federal agency determines will not have 
reasonably foreseeable coastal effects individually or cumulatively, 
would improve the efficiency of the Federal consistency process.
     Whether guidance or regulatory action is needed to assist 
Federal agencies and State CMPs in determining when activities 
undertaken far offshore from State waters have reasonably foreseeable 
coastal effects and whether the ``listing'' and ``geographic location'' 
descriptions in 15 CFR 930.53 should be modified to provide additional 
clarity and predictability to the applicability of State CZMA Federal 
Consistency review for activities located far offshore.
     Whether multiple federal approvals needed for an OCS EP or 
DPP should be or can be consolidated into a single consistency review. 
For instance, in addition to the permits described in detail in EPs and 
DPPs, whether other associated approvals, air and water permits not 
``described in detail'' in an EP or DPP, can or should be consolidated 
in a single State consistency review of the EP or DPP.
    Comments received by NOAA will help to determine its next steps, 
i.e., whether the Federal Consistency regulations should be amended to 
clarify data and information requirements in the State consistency 
review process or during the Secretarial appeal process or whether 
additional policy guidance on these and related issues is more 
appropriate. Any proposed changes to the Federal Consistency 
regulations would be published in the Federal Register following 
compliance with the Administrative Procedures Act and other relevant 
statutes and executive orders. Any proposed policy statement would be 
published in the Federal Register.

    Dated: June 25, 2002.
Jamison Hawkins,
Deputy, Assistant Administrator for Oceans and Coastal Zone Management.
[FR Doc. 02-16417 Filed 7-1-02; 8:45 am]
BILLING CODE 3510-08-P