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Interior Dept. challenges drilling permit ruling, warns of delayed development
The Obama administration delivered a warning late Friday to a federal judge who’s demanding Interior Department action on deepwater drilling permit applications: Be careful what you wish for.
The Interior Department challenged a Louisiana judge’s orders that require decisions on several industry applications later this month, warning that the court's mandate could force Interior to “deny the applications outright” and divert resources from review of other permit requests.
In their filing, Justice Department lawyers say that Judge Martin Feldman’s orders could thwart the “efficient development of oil and gas resources on the Outer Continental Shelf, as well as potentially harm the near-term interests of the operators who submitted the subject applications.”
“The Orders only work to disrupt [the Bureau of Ocean Energy Management, Regulation and Enforcement’s] more efficient, iterative practice of communicating application inadequacies to the applicant so that they can be corrected. BOEMRE instead now may be required to deny the applications outright, which in turn would frustrate Congress’ stated preference that the Outer Continental Shelf be made available for ‘expeditious and orderly development subject to environmental safeguards,’” states the filing with Feldman, who sits on the U.S. District Court for the Eastern District of Louisiana.
The filing explains that Interior is reviewing the applications under beefed-up safety standards imposed after the BP oil spill, and the oil companies with applications covered by Feldman’s order “have not yet satisfied these requirements and, accordingly, they cannot be approved in their current state.”
Feldman over several months has issued a string of rulings that are highly critical of restrictions on Gulf of Mexico drilling imposed after last year’s massive BP oil spill began.
Interior is seeking a stay of a mid-February order that requires BOEMRE decisions on whether to grant five permit applications by March 19, and a subsequent order that demanded a decision on two others by March 31.
Ensco, the drilling services company that owns rigs to be used on the projects, is the lead plaintiff in the case against Interior.
Interior Secretary Ken Salazar had signaled Wednesday that the department would challenge the decision by Feldman, who sits on the U.S. District Court for the Eastern District of Louisiana.
The filing Friday also warns that helping the permit applicants meet regulatory requirements under the timeline in the court order will force BOEMRE to “refocus its permit review resources to heavily focus on these seven applications.”
“Because BOEMRE’s resources will be focused on the seven applications, the agency will be forced to delay its review of other applications, including applications for shallow water drilling, which may otherwise be ready for final review and approval,” the filing states.
The permit applications covered by the Feldman’s orders affect several oil companies – Nexen Petroleum U.S.A, Cobalt International Energy, and ATP Oil & Gas Corp.
Interior placed a moratorium on deepwater drilling last May as BP’s blown-out Macondo well was spewing what ultimately added up to over four million barrels of oil into the Gulf of Mexico. The agency subsequently issued new rules that require more robust industry measures to prevent blowouts and quickly contain them if they occur.
The formal ban was lifted in October, and last Monday Interior issued the first deepwater permit issued under the enhanced safety rules, allowing Houston-based Noble Energy to resume a project that was halted by the drilling ban.
Salazar, in Capitol Hill appearances in recent days, has said that more permits will be coming, but made clear at a Senate Energy and Natural Resources Committee hearing Wednesday that he didn’t appreciate Feldman’s order, casting it as an intrusion onto Interior’s discretion.
