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Court Issues Stunner, Vacates 2007-2012 Offshore Leasing Plan

In a stunning decision Friday, an appeals court in Washington, DC, vacated and remanded to the Department of Interior the five-year leasing plan for 2007-2012 for reconsideration, a decision that threatens to upset the current leasing schedule and raises questions about sales that already have been completed under the plan. The decision cited the agency's failure to "properly consider" the environmental sensitivity and marine productivity of the different areas of the Outer Continental Shelf (OCS) that are included in the leasing plan.

The ruling is being closely reviewed by Interior and the Department of Justice, said Interior spokesman Frank Quimby. He noted that the agency was trying to figure out the impact of the court ruling on future lease sales under the 2007-2012 plan and on the lease sales that have already been held. "This has a lot of potential implications," Quimby said. He doesn't expect Interior to have a detailed response for several days.

Sen. Lisa Murkowski (R-AK) said she was "disappointed" by the court's decision. "This may now cause a further delay in the development of the oil and gas resources that America still requires to fuel its economy."

The OCS leasing plan "needs to be developed with sensitivity to climate change and marine life, but I am troubled that the groups behind this litigation are engaging in the too-familiar tactic of suing on every possible issue, no matter the legal merits. This is evidenced by five of the six claims -- all relating to climate change and endangered species -- having been dismissed or denied," she said.

Upon remand to the agency, "the [Interior] secretary must first conduct a more complete comparative analysis of the environmental sensitivity of different areas of the Outer Continental Shelf...and 'must at least attempt to identify those areas whose environment and marine productivity are most and least sensitive to OCS activity,'" a three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit said in the decision (Center for Biological Diversity vs. U.S. Department of Interior, No. 07-1247).

"Once Interior has conducted its...analysis, Interior must then determine whether its reconsideration of the environmental sensitivity analysis warrants the exclusion of any proposed areas in the [five-year] leasing program. Finally...Interior must reassess the time and location of the leasing program 'so as to obtain a proper balance between the potential for environmental damage, the potential for the discovery of oil and gas, and the potential for adverse impact on the coastal zone,'" as required by the Outer Continental Shelf Lands Act (OCSLA), the court ruled.

Three groups -- Center for Biological Diversity, Alaska Wilderness League and Pacific Environment -- and the Native Village of Point Hope challenged Interior's 2007-2012 OCS leasing program, which calls for 21 planned lease sales in the Gulf of Mexico, offshore Alaska and offshore Virginia during the five-year period. The petitioners claimed that Interior violated the OCSLA, National Environmental Policy Act and the Endangered Species Act when drafting the leasing plan. The court ruled that most of the issues were "not yet ripe for review," but it found one claim to have merit -- that the leasing program violated the OCSLA because it relied on an "insufficient" study by the National Oceanographic and Atmospheric Administration (NOAA) in assessing the environmental sensitivity of the OCS planning areas.

Interior's rankings of the environmental sensitivity of various leasing program areas were based on only one factor: the "physical characteristics" of the shoreline of the areas, according to the appellate court. Interior used the Environmental Sensitivity Index, developed by NOAA, to rank the sensitivity of different shoreline areas to oil spills. The ranking of an area was on a scale of 1 to 10, with 10 being a rating for an area to be most likely damaged long term by oil spills.

"Interior argues that its adoption of the NOAA shoreline study to determine environmental sensitivity of OCS areas [in accordance with the OCSLA] is a policy judgment that is entitled to substantial deference," but the court called Interior's interpretation of the OCSLA 'irrational."

The OCSLA "states clearly that an agency must assess the environmental sensitivity of 'different areas of the Outer Continental Shelf' in order to make its determination of when and where to explore and develop additional areas for oil...Interior's use of the NOAA study runs afoul of this provision because it assesses only the effects of oil spills on shores," the court said.

"Interior provides no explanation for how the environmental sensitivity of coastal shoreline areas can serve as a substitute for the environmental sensitivity of OCS areas, when the coastline and proposed leasing areas are so distant from each other. This interpretation runs directly counter to the statutory language."

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