A federal judge in Louisiana has overturned the Department of Interior's decision imposing an additional regulatory burden on offshore oil and natural gas operators in the wake of the Deepwater Horizon drilling platform explosion in the Gulf of Mexico.
U.S. District Judge Martin Feldman ruled that Interior violated the Administrative Procedure Act by failing to give the public notice and an opportunity to comment on the NTL-05 (notice to lessees) that was issued in early June, which require operators to implement additional safety measures for energy development on the Outer Continental Shelf (OCS).
"Notice and comment were required by law. The government did not comply, and the NTL-05 is of no lawful force or effect," the judge said. It was not immediately clear whether the Justice Department would appeal the ruling.
The judge's ruling, at first blush, appears to be favorable for the oil and gas industry, but requiring the notice-and-comment period could significantly drag out the time period before operators can drill in the Gulf again. "We'll have to wait and see how the judge's ruling plays out, but the fact remains that safety is our number one priority," said the American Petroleum Institute. The Independent Petroleum Association of America, which represents independent producers, declined to comment on the decision, saying it was still reviewing it.
Broussard, LA-based Ensco Offshore Co. challenged the NTL-05 and the second moratorium, which was lifted last Tuesday (see Daily GPI, Oct. 13). "The parties [did] not dispute that the NTL-05 is a rule; their disagreement [rested] on whether the rule is substantive, requiring neither notice or comment...It seems unrestrained by the facts before the court to characterize the government's edicts as interpretative. That the notice is called a 'guidance document' is wishful at best," Feldman said.
NTL-05 imposes additional duties on Gulf operators and lessees, including mandating new certifications and safety inspections that were not in place before. "It does not simply track statutory language or reiterate existing duties. It is, by its very thrust, substantive," thus requiring notice and comment. he said.
Feldman asked Ensco to file a motion declaring its challenge to the second moratorium moot. In late June Feldman blocked the federal government from enforcing its first moratorium on deepwater oil and natural gas drilling in the Gulf for six months (see Daily GPI, June 23). He said Interior had failed to justify its decision to impose a prolonged ban on all the deepwater drilling in the Gulf for the actions of one company -- BP plc.
©Copyright 2010 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.