The same federal judge in Louisiana who scrapped the Interior Department's first deepwater drilling moratorium and later ordered the agency to act on seven drilling permits ruled in favor yesterday of the government's requirements that operators submit permits for non-exploration drilling in the Gulf of Mexico.

But the judge held off on deciding whether Interior can demand new drilling documents from companies to show compliance with rules put in place since last summer's BP PLC oil spill.

U.S. District Judge Martin Feldman -- who in February said Interior had used "autocratic discretion" by delaying approval of new Gulf drilling (E&ENews PM, Feb. 17) -- said the agency is allowed to require separate permits for development drilling, which includes activities such as water injection wells to boost production.

The plaintiffs in the case, Ensco Offshore Co. and ATP Oil & Gas Corp., had argued that Interior lacked authority from Congress to require separate applications to drill wells into previously discovered underground reservoirs.

They had also challenged the agency's requirement that drillers in the western Gulf submit updated "development operations coordination documents," arguing those were virtually the same as the more burdensome "development and production plans" that are only required for Gulf activities adjacent to Florida.

In his 23-page ruling yesterday, Feldman upheld Interior's permitting for development wells and said the requirements for permits and development plans have been in place for more than a decade.

But he said more fact-finding was necessary to determine whether the requirement that development documents comply with new regulations indicates an "intentional delay."

"What we read in the last chapter was a story of the disquieting spectre of the government's questionable conduct regarding its portrayal of important facts, and an earnest challenge to resolute governmental abuse," wrote Feldman, who in an earlier ruling criticized the White House's alleged attempt to manipulate a report from scientists to suggest they supported a moratorium. "This chapter tells a different story."

Calls this morning to the Justice Department and a spokesman for Ensco were not returned by publication time.

Jack Coleman, a former Interior lawyer and current partner at EnergyNorthAmerica who was not involved in the case, said he agreed with Feldman's finding that the department has discretion under the Outer Continental Shelf Lands Act to require permits for development drilling. "You don't grant [summary judgments] unless things are clear cut," he said.

But, "what's interesting here is what the judge did not decide," Coleman said.

What remains to be determined is whether the government's requirement that companies resubmit development documents that meet new safety stipulations imposed after the spill amount to an "unreasonable delay," Coleman said.

Issues include Interior's future application of categorical exclusions that are used to fast-track offshore proposals deemed to have minimal potential impacts on the environment, Coleman said.

"The lessees are entitled to the benefits of these regulations," Coleman said. "It wasn't necessary to eliminate categorical exclusions in order to add these requirements to protect the environment."

Coleman, citing a landmark case known as Mobil v. U.S., said Interior may only add regulations for existing lease holders if they involve the "conservation of resources."