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Awaiting Word from Court, Interior Proceeds with GOM Lease Sale

July 20, 2009
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The Interior Department Friday said it will move forward with a lease sale scheduled in the Gulf of Mexico (GOM) in August while it awaits word from an appellate court on the legality of the existing five-year leasing plan for 2007-2012.

"Yes, we're going ahead to advertise and schedule the next lease sale" in the GOM, but whether it actually takes place "all depends on the court," said Interior spokesman Frank Quimby.

"We expect to hear back from them [the court] soon," possibly within the next several weeks, he said.

GOM Sale 210, which includes 3,400 tracts off the coast of Texas and Louisiana, is scheduled for Aug. 19. Bidders will be required to submit sealed bids to the regional director of Interior's Minerals Management Service office in New Orleans by 10 a.m. (CDT) on Aug. 18.

Future offshore lease sales were thrown into question when the U.S. Court of Appeals for the District of Columbia Circuit in late April vacated and remanded the leasing plan for 2007-2012 (see NGI, April 20). 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.

Within weeks, the Department of Justice (DOJ) petitioned the court to clarify its ruling (see NGI, May 18). The ruling not only has the potential to upset the current leasing schedule, but it raises questions about oil and gas leases that have already been completed under the plan.

The DOJ asked the appellate court to confirm that the court's recent ruling does not require the retroactive invalidation of prior leases and allows the agency to move forward and fix the shortcomings in the environmental analysis for the existing five-year offshore leasing plan without developing and approving an entirely new five-year plan.

Interior "has already begun addressing the court's remand instructions," but the "government submits...that vacating the entire 2007-2012 program pending reconsideration will cause broader disruptions that would be both severe and unnecessary," the DOJ said in the petition for review. "In particular, vacatur 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 federal government called on the court to clarify the intended scope of its ruling and/or to amend the order to remand the OCS leasing program without vacating it. It also asked the court to specify whether Interior may conduct any lease sales under the 2007-2012 plan during the remand proceedings. "While delaying or canceling planned leases sales is less immediately problematic than halting activity on existing leases or canceling them, it presents the same potential for long-term disruption."

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