Oil exploration companies want stay vacated so drilling can begin

By Steve Korris | Apr 5, 2011



On March 15, four days before U.S. District Judge Martin Feldman would have required him to issue permits to oil and gas explorers, Interior Secretary Ken Salazar appealed to the U.S. Court of Appeals for the Fifth Circuit and won a stay.

Plaintiff Ensco Offshore moved the next day to vacate the stay, pleading that the injunction "will allow deep water rigs to go back to work thereby employing citizens of the Gulf region and contributing to the nation's domestic oil and gas supply."

Assistant Attorney General for the United States Department of Justice Environment and Natural Resources Division Ignacia Moreno responded, "This is a weak foundation upon which to seek reconsideration of the stay this court has granted, because the factual record favors the Bureau of Ocean Energy Management Regulation and Enforcement."

She wrote, "It is plain that the district court's order failed to apply a proper legal analysis and to take account of relevant facts that BOEMRE had presented to it."

Moreno wrote that BOEMRE has continued to review drilling permit applications through its normal review process, "both prior to and since the district court's injunction and this court's stay."

She wrote that the bureau approved three applications for drilling operations that last year's moratorium on deep water drilling would have banned.

On Feb. 28, the bureau approved an application that was in litigation but not subject to the injunction. Another application not related to Ensco's claims was approved by the bureau on March 11, and one subject to the injunction was approved on March 18.

She wrote that these actions show that BOEMRE's process is proceeding and that the injunction would divert resources to low priority applications.

"Rather than openly defy the district court's injunction, BOEMRE sought relief of a stay from this court in order to avoid the harm that injunction would cause," she wrote.

"BOEMRE is already prioritizing permit applications to promote the speedy, safe development of Outer Continental Shelf mineral resources, and the injunction would have interfered with that effort," she wrote.

She wrote that as applications become complete, the bureau moves quickly to approve them.

"The public interest is not served by an injunction that diverts attention from this work, and instead requires BOEMRE formally to deny incomplete applications that could be improved through dialogue with the permit applicants," she wrote.

"Moreover, even if Ensco were right about the general effect of the injunction on BOEMRE's process, the public's interest is not served by the expedited review of particular permit applications."

The Fifth Circuit set a May 4 deadline for Salazar's appeal brief.

Feldman denied an injunction to Ensco in January, but changed his mind after reading further briefs.

"It is undisputed that before the Deepwater Horizon disaster, permits were processed, on average, in two weeks' time," he wrote on Feb. 17.

"In stark contrast, the five permits at issue have been pending from four to some nine months.

"It is also undisputed that these delays have put off indefinitely drilling in the Gulf of Mexico," he wrote.

Feldman wrote that Ensco has incurred significantly reduced standby rates on its rigs and has been forced to move some of its rigs to other locations around the world.

"It is unclear when Gulf drilling will resume," he wrote. "The government's assurances have been inconsistent."

He found a duty under the Outer Continental Shelf Lands Act to act, favorably or unfavorably, on applications.

"Not acting at all is not a lawful option," he wrote.

"To discharge the Secretary's oversight responsibility, without any time sensitive obligation to do so, as the government now starkly urges, unmasks the fiction of transparency in government," he wrote.

"The rights involved here are more than economic: the plaintiff's operations in the Gulf of Mexico are threatened with endless disability," he wrote.

"It has already sent a rig to French Guiana; its contracts and skilled labor necessarily will follow."

More News

The Record Network