A federal district judge last Thursday granted a preliminary injunction ordering the Interior Department’s Bureau of Ocean Management, Regulation and Enforcement (BOEM) to act within 30 days on five pending permit applications to drill wells in the deepwater Gulf of Mexico (GOM).

The decision by Judge Martin L.C. Feldman of the U.S. District Court for the Eastern District of Louisiana noted that even after the Oct. 12 lifting of the Interior Department’s second moratorium on deepwater Gulf drilling “permits for deepwater drilling activities have not been processed; little to no deepwater drilling has resumed.”

The decision granted the petition of Ensco Offshore Co. and others regarding five permit applications in which Ensco holds a contractual stake. The permit applications were filed on April 30, July 27, Oct. 12 and Oct. 21. Feldman noted that prior to the Macondo well blowout, permits had been approved in two weeks.

The legal action came on the same day that the Marine Well Containment Co. successfully completed testing of its containment system in the Gulf, fulfilling the Interior Department’s last requirement for Gulf reentry. With their obligations complete, industry groups note that it’s time for the Interior Department to step up to the plate and end the de facto moratorium on drilling in the GOM (see related story).

Also, last week a bipartisan group of senators introduced a congressional resolution calling on the Interior Department to streamline the reviewing process for shallow and deepwater drilling applications and provide better guidance to producers seeking new permits. And the Government Accountability Office (GAO), the investigative arm of Congress, has added the Interior to its high-risk list due to concerns over its management of oil and natural gas resources.

“Interior recently began restructuring its oil and gas program, which is inherently challenging, and there are many open questions about whether Interior has the capacity to undertake this reorganization while carrying out its range of responsibility,” the agency said (see related story).

Feldman said the Outer Continental Shelf Lands Act (OCSLA) requires the Interior Department to act “expeditiously” and “within a reasonable time” on permits. Noting that it has now been four months since the moratorium was lifted, the judge said that time had run out.

“As the first anniversary of the Deepwater Horizon disaster draws near, any reason that would have justified delays has, under a rule of reason, expired,” the decision said.

“BOEMRE has taken over management from a formerly crumbling and disreputable agency; the leaking culprit well has been contained; the revised regulations are no longer new; and the threat of rigs leaving the Gulf becomes more forceful each day. The permitting backlog becomes increasingly inexcusable,” Feldman wrote.

Industry applauded the decision. “The fact is, the current pace at which BOEMRE issues permits is crippling our industry, which just last week saw the demise of Seahawk Drilling Inc. — one of the largest shallow water drillers — thanks to the permitting slow-down,” said Jim Noe, director of the Shallow Water Energy Security Coalition. “Drilling jobs, support workers and the Gulf region’s fragile economy have been needlessly placed in peril. We hope today’s court action will at long last compel the Interior Department to refocus on its statutory mandate to develop U.S. offshore resources. As the judge signaled today, it is high time BOEMRE created a more efficient, risk-based and timely method for issuing permits for responsible offshore energy production.”

Feldman has issued previous decisions in opposition to Interior Department actions. He has twice approved preliminary injunctions against the department’s moratoriums on offshore drilling (see Daily GPI, Feb. 4).

BOEM had argued that four of the permits in which Ensco was involved were not actually pending because the government had sent them back to have deficiencies corrected. One of the companies said it was not notified of any deficiencies. BOEM had contacted it merely to inform it that its application would move to the end of the queue because it had subleased a rig intended for the Gulf to French Guiana.

In Thursday’s decision Feldman rescinded and vacated his previous decision blocking the injunction, saying that based on supplemental filings by the parties he had determined that the court had the right to set a timeframe for action.

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