Environmental Impact of Over-Regulation

Consideration of a global viewpoint in modern impact analyses suggests that we should favor the efficient use of available infrastructure over the wasteful development of new infrastructure when comparable volumes of oil and gas production are concerned. This global benefit of efficient development is overlooked in traditional environmental impact analyses that typically focus on local concerns within a narrow geographic range. This traditional approach, which is common in more affluent developed countries, may actually contribute to increased global impacts by establishing stringent regulatory regimes discouraging development that would allow the efficient long-term use of that infrastructure. This disregard for global efficiencies favors development in underdeveloped countries where economic development goals may overshadow local concerns for environmental protection. This paper is based upon the results of a study of onshore industrial infrastructure capacity in Central California sponsored by the U.S. Minerals Management Service. This study evaluates the oil and gas production potential of offshore leases that could be accommodated by existing infrastructure and a balanced program of facility replacement. Though these oil and gas resources were originally identified over ten years ago, local environmental policies have delayed their development. An example of oil and gas production activities in other parts of the world that provide energy supplies equivalent to this unrealized potential is described along with an overview of selected environmental characteristics. This paper concludes that environmental review procedures addressing oil and gas development should include consideration of global implications of locally restrictive approval policies.