Environmental reviews for offshore drilling required under the National Environmental Policy Act will be re-evaluated in the wake of the massive Gulf of Mexico oil spill, the Obama administration announced today.

"We're also closing the loophole that has allowed some oil companies to bypass some critical environmental reviews, and today we're announcing a new examination of the environmental procedures for oil and gas exploration and development," President Obama said from the Rose Garden.

Obama said that for a decade or more, there has been a "cozy relationship" between the oil companies and the Minerals Management Service, the federal agency that oversees offshore drilling.

"It seems as if permits were too often issued based on little more than assurances of safety from the oil companies," Obama said. "That cannot and will not happen anymore. To borrow an old phrase, 'We will trust, but we will verify.'"

The review will examine the agency's NEPA procedures for offshore oil and gas exploration and development, the White House Council on Environmental Quality (CEQ) and the Interior Department said.

"A review of the overall NEPA procedures for the MMS is an important part of the ongoing comprehensive and thorough investigation of this incident, but it also continues the reform effort that we have been undertaking at MMS and throughout Interior," Interior Secretary Ken Salazar said in a statement.

The move comes after MMS gave BP PLC's exploration plan for the area where oil is now gushing into the Gulf a "categorical exclusion," allowing it to be approved without preparing new environmental analyses that would normally be required under NEPA.

MMS and BP said the categorical exclusion only came after broader reviews that included an environmental impact statement for the larger planning area and a sale-specific environmental assessment. MMS grants between 250 and 400 such waivers a year, MMS spokesman David Smith said. But he added that the new offshore safety board being formed in the wake of the spill will look at the categorical exclusion issue.

Lawmakers blasted the use of the categorical exclusion during congressional hearings on the spill this week. Sen. Robert Menendez (D-N.J.) questioned why the rig would "not require the oversight and regulation mandated under our country's most important environmental legislation" and asked how "such an inherently dangerous activity" could not undergo the additional environmental review.

In February, CEQ proposed draft guidance clarifying the use of categorical exclusions that addresses how agencies establish, apply and review categorical exclusions. The draft guidance encourages agencies to engage the public in some way, most often through notification or disclosure, before using the categorical exclusion and to provide public information afterward about how they were used (E&ENews PM, Feb. 18).

The Obama administration also is submitting a proposal to Congress to increase to 90 days or more the amount of time MMS has to complete an environmental review of exploration plans. Under current law, the agency must review and make decisions about exploration plans within 30 days of when companies submit them.