Green group sues Interior over ‘critically flawed’ offshore oil plan

An environmental group is challenging the Interior Department’s plan to conduct new offshore oil-and-gas lease sales over the next five years, alleging that the economic analysis underlying the plan is “critically flawed, biased and incomplete.”

The Center for Sustainable Economy (CSE) lays out its case against selling drilling blocs in the Gulf of Mexico and off Alaska’s coast in documents being filed Monday with the U.S. Court of Appeals for the District of Columbia Circuit.

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“Oil and gas on the outer continental shelf is a precious strategic reserve for our children and grandchildren and should only be developed when and if it makes compelling economic sense to do so,” said John Talberth, the group’s president and senior economist, in a statement Monday.

He alleged the Obama administration is “rushing headlong” into a leasing schedule that creates environmental risks without boosting energy security.

Michael Livermore of the Center for Policy Integrity, which is helping to represent CSE, said the plan should be re-done because Interior failed to consider the economic value of not going ahead with leasing in some cases.

He noted that when leasing for development of publicly-owned resources is delayed, there is more time to learn about environmental sensitivities and development technology improves, among other considerations.

“When you don’t take into account the value of delay, you end up subjecting too much of the outer continental shelf to leasing,” Livermore told The Hill.

“That option value is owned by the American public and ought to be considered by the agency,” said Livermore, the executive director of the Institute, which is based at New York University's law school.

CSE, which is based in Santa Fe, N.M., initially petitioned the appeals court for review of the plan in late October and is detailing the basis for its lawsuit in a court filing Monday.

In late August Interior finalized plans for up to 15 total lease sales in the Gulf of Mexico and off Alaska’s coast between 2012-2017.

The first sale of drilling rights to oil-and-gas companies under the 2012-2017 program, for tracts in the western Gulf, took place in late November.

Interior officials have touted the plan as a way to enable development of large volumes of oil and natural gas while protecting the environment.

The agency has toughened drilling safety standards in the wake of the 2010 BP spill in the Gulf of Mexico.

“[W]ith comprehensive safety standards in place, this plan will help us to continue to grow America’s energy economy and further reduce our dependence on foreign oil, while protecting marine, coastal and human health,” Interior Secretary Ken Salazar said last summer.

Interior is offering leases in offshore areas that, overall, contain an estimated 68 billion barrels of recoverable oil and 307 trillion cubic feet of natural gas, according to the department. The plan could ultimately lead to development of over eight billion barrels of oil, according to Interior estimates.

A “statement of issues” CSE is filing with the court Monday charges that the plan runs afoul of the Outer Continental Shelf Lands Act.

The filing alleges that Interior’s plan does not “properly balance the potential for environmental damage, the potential for the discovery of oil and gas, and the potential for adverse impacts on the coastal zone.”

The lawsuit also claims that Interior’s plan violates the National Environmental Policy Act, which is the statute that mandates environmental analyses ahead of many federal actions.

Interior did not “rigorously explore” and “objectively” weigh alternatives to the plan, and relied on analyses that are “critically flawed, biased, and incomplete,” the court filing states.

Steven Sugarman, an attorney representing CSE, said analysis by Interior’s Bureau of Ocean Energy Management’s (BOEM) omitted factors that created a bias in favor of new leasing.

“Key factors were ignored by BOEM including the massive uncertainty associated with the potential for deepwater drilling disasters, the current glut in gas production, record U.S. fuel exports and the fact that millions of acres of existing leases are idle,” he said.

Oil-and-gas industry groups and Capitol Hill Republicans have also criticized Interior’s plan, but they allege it is too modest and should have made more areas available for drilling.

But a number of industry groups – including the American Petroleum Institute and the International Association of Drilling Contractors – have also petitioned the appeals court to intervene in the case on Interior’s side, noting their interests are at stake in the case.