OBOEMRED: Feldman Orders Government To Issue Drilling Permits Within 30 Days

Today U.S. District judge Martin Feldman, who earlier this month held Interior Secretary Ken Salazar in contempt for his department’s failure to effectively end the Obama administration’s moratorium on offshore drilling, delivered another blow to the Interior Department in another case on the subject.

Feldman’s contempt ruling was in the case of Hornbeck Offshore v. Salazar, but today the judge was deciding in the case of Ensco Offshore v. Salazar. While the Hornbeck case involved an offshore service firm, Ensco is an actual operator of offshore drilling rigs with an investment in five shallow-water leases in the Gulf of Mexico. Those five leases have drilling applications in front of Interior’s Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), applications which were filed between four and nine months ago.

Prior to the Deepwater Horizon incident last April and the resulting oil spill in the Gulf, BOEMRE’s predecessor agency, the Minerals Management Service, typically issued permits within two weeks of their filing in the Gulf’s shallow water areas. Since that time, BOEMRE’s permitting process has been sporadic at best – with lawsuits, bankruptcies and political fireworks making up a desperate and chaotic environment in the Gulf oil and gas industry.

Ensco had sought a preliminary injunction from Feldman compelling BOEMRE to act on its five permit applications, which the judge denied without prejudice in January. Today’s order reversed that denial, with Feldman declaring no activity on those applications in over a month since he first visited the situation as “unreasonable, unacceptable and unjustified by the evidence before the Court” and within his power to remediate.

At the outset, the Court denied the plaintiff’s motion for apreliminary injunction  because the Court had questions about whether it has the judicial review authority to impose a time frame for agency decision and, if so, what a reasonable time frame would be to mandate government action, whether it be denial or approval of permit applications.  The parties’ supplemental briefing has resolved the Court’s questions; the Court now RESCINDS and VACATES its Order denying without prejudice a preliminary injunction and GRANTS the plaintiff’s motion for a preliminary injunction as to Count IV, subject to the confines of this Order.

Feldman’s order also established his court’s opinion that a 30-day window for permit acceptance was a maximum window. Once BOEMRE accepts a permit for review, “the government is under a duty to act by either granting or denying a permit application within a reasonable time. Not acting at all is not a lawful option,” he wrote.

Jim Adams, president and CEO of the Offshore Marine Service Association (OMSA), whose members have been hit hard by the administration’s permit paralysis, was happy about the ruling – sort of.

“It’s déjà vu all over again: A federal judge has ordered the Obama administration to follow the rule of law, do its job and start acting on applications for drilling permits in the Gulf,” said Adams. “For nearly a year, the Obama administration has not approved a single deepwater drilling permit in the Gulf. This de facto moratorium on oil exploration is unreasonable, unwarranted, unfair and unlawful. It’s a self-inflicted energy crisis for America—killing jobs, raising gas prices, and making us more dependent on foreign oil.”

“President Obama’s de facto moratorium on Gulf of Mexico oil exploration is a job killer that threatens our energy security and our national security,” Adams said. “If President Obama truly cared about jobs and economic growth, he would follow the judge’s order and lift his de facto moratorium on deepwater oil drilling in the Gulf of Mexico.”

Adams wasn’t alone in expressing a mix of frustration and satisfaction with the events in Feldman’s court. Sen. David Vitter, who this week has been in a battle of his own with BOEMRE head Michael Bromwich over the department’s failure to issue permits, had this to say…

“I applaud this ruling today. It confirms what Sen. Landrieu and I have been saying along with virtually every other Louisianian: President Obama’s continuing de facto moratorium in the Gulf is inexcusable.

“This ruling says it’s not only inexcusable but that it violates the law.

“I’ll continue my hold on the president’s newest Interior Department nominee until he follows the law and issues deepwater exploratory permits.”

Earlier this week, Vitter announced his intention to block Interior Department nominee Dan Ashe until the department issues at least 15 deepwater exploratory drilling permits – following Feldman’s ruling rather than predicating yet another contempt order would get the government one-third of the way toward supplying Ashe with his new job. Vitter also has a hold on NOAA chief scientist nominee Scott Doney over similar concerns.

Vitter’s reaction to the ruling was largely shared by Louisiana’s other senator, who usually agrees with him on very little. Sen. Mary Landrieu (D-LA) was even more uncomplimentary of Interior…

“Once again, BOEMRE’s delay tactics to avoid issuing new drilling permits in the Gulf of Mexico have drawn federal court intervention.  Just two weeks ago, Judge Feldman found Secretary Salazar in contempt for his failure to comply with an earlier order to lift the moratorium on permits.  Now, Judge Feldman is giving BOEMRE a deadline to do its job.

“It’s been more than four months since BOEMRE declared the moratorium over, and yet not a single new deepwater drilling permit has been issued.  Since the oil spill, only 31 shallow water permits and a single exploratory permit have been issued.”

“What’s the matter with this agency?  Do they think they are above the law?  Their foot-dragging is squeezing Louisiana’s economy.  Rigs are leaving the Gulf for other parts of the world, taking thousands of jobs with them.  Just last week, one company, Seahawk Drilling, filed for bankruptcy because it can’t get a drilling permit.  It’s high time that BOEMRE complied with federal court orders and help Louisiana’s oil and gas industry get back on its feet.”

Whether the Obama administration will heed Feldman’s ruling in the Ensco case or disregard it as it did with Hornbeck is unclear. The New York Times reported that “A spokeswoman for the bureau said that officials were reviewing the judge’s decision and would have no immediate comment.”



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