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DOI seeks clarity on court OCS ruling
Alan Bailey Petroleum News
Since April 17, when the United States Court of Appeals for the District of Columbia upheld an appeal by the Native Village of Point Hope and several environmental organizations against the U.S. Minerals Management Service’s 2007 to 2012 outer continental shelf lease sale program, the U.S. Department of Justice, working on behalf of the U.S. Department of Interior, has been trying to determine the ramifications of the court’s decision.
And on May 11 Secretary of the Interior Ken Salazar asked Justice to seek clarification from the court regarding the status of leases already issued under the lease sale program, and regarding a Justice view of how the program might be salvaged to comply with the court order.
The 2007 to 2012 lease sale program, published by the U.S. Minerals Management Service during the Bush administration, includes the February 2008 Chukchi Sea lease sale that attracted $2.6 billion in high bonus bids, as well as three lease sales in the Gulf of Mexico.
Inadequate environmental analysis The court had ordered Interior to withdraw the lease sale program because, the court said, Interior had not done an adequate analysis of the environmental sensitivity of areas impacted by planned lease sales — MMS had used a NOAA analysis of the impact of oil spills on coastlines, rather than an analysis of entire lease sale areas.
“The previous administration’s failure to apply the law has resulted in widespread uncertainty in the oil and gas industry and put reliable conventional energy production from offshore areas at risk,” Salazar said in announcing the Justice request for court clarification. “We must fix the problems the court identified and put oil and gas leasing decisions back on a firm scientific footing.”
Justice has interpreted the court decision as not invalidating leases that have already been issued, and the department is seeking court confirmation of that position. And Justice wants the court to confirm that MMS can reinstate the lease sale program by fixing the shortcomings in the environmental analysis, rather than having to develop an entirely new five-year program.
“Interior has already begun addressing the court’s remand instructions and is acting to preserve the environmental status quo in Alaskan waters during reconsideration,” Justice said in its petition filed with the court. “The government submits, however, that vacating the entire 2007-2012 program pending reconsideration will cause broader disruptions that would be both severe and unnecessary. In particular, (vacating) might require interruption of exploration and production activity in the Gulf of Mexico and could call into question the validity of 487 leases already issued in the Chukchi Sea and 1,854 more issued in the Gulf of Mexico. … The government therefore asks the court to clarify the intended scope of its order and/or to amend the order to remand the program without vacating it.”
As an alternative, the court could defer its order to withdraw the lease sale program until MMS has reconsidered its environmental analysis and submitted its findings to the court for legal review, Justice said.
API petition In a parallel filing, the American Petroleum Institute has asked the court to remand the lease sale program without requiring the program to be withdrawn.
“The court’s decision should not stand as an impediment to continued production of oil and natural gas from leases already issued in the outer continental shelf and to leasing in the future under the five-year program,” said API President Jack Gerard May 12. “Offshore oil and gas leasing under the program is responsible for thousands of well-paying American jobs, over $10 billion in much-needed revenue for federal, state and local governments. The nation’s energy security depends upon these resources.”
The court has said that it will respond to the Interior and API petitions by May 28.
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