The latest phase in the legal fight over offshore drilling permits that was kick-started by last year's Deepwater Horizon disaster begins this week with two back-to-back arguments in a federal appeals court in New Orleans.
Tomorrow, a three-judge panel of the 5th U.S. Circuit Court of Appeals will consider two related cases concerning permits that were approved around the time of the April 20 explosion and oil spill in the Gulf of Mexico.
Both cases arise from allegations made by environmentalists that the government violated environmental laws in approving permits both before and in the immediate aftermath of the spill.
They are just two of several cases on the issue of offshore drilling permits that are pending both in federal district court and in the appeals court, some brought by environmental groups that think the government is moving too quickly to approve permits and some by companies in the oil and gas industry that believe the government is unreasonably delaying issuing permits.
The cases being argued before the 5th Circuit tomorrow morning both arise from the renewed interest shown by environmental groups in the drilling process in light of the spill.
"The explosion really put oil drilling front and center," said David Guest, an attorney at Earthjustice, which is involved in both cases. "It got a whole lot of people looking much harder."
Both cases feature allegations that the government violated the National Environmental Policy Act and the Outer Continental Shelf Lands Act in completing environmental reviews of drilling exploration plans.
Under Department of Interior regulations, offshore exploration plans are excluded from normal review under NEPA (a determination known as a "categorical exclusion").
The plans are required to contain a "environmental impact analysis," but the environmental groups that filed suit claim these analyses were insufficient before the Deepwater Horizon explosion, and even more so when it was clear after the spill what could occur if something went wrong.
Environmental groups argue that the government underestimated the risk of a possible spill and failed to take into account the fact there are various exceptions to the rules governing categorical exclusions when there is a particular risk of an adverse environmental impact.
The first case being argued tomorrow, Gulf Restoration Network v. Salazar, focuses on the approval of five different exploration plans, two submitted by Cobalt Energy International and Mariner Energy Inc. and one filed by Chevron Corp.
The second case, Center for Biological Diversity v. Salazar, relates to consolidated challenges to 11 different plans submitted in April and May of 2010, including a supplemental exploration plan filed by Apaches Corp on April 9 and other plans filed by various companies after the spill.
The government denies that it violated NEPA in approving the permits. It also notes that the exploration plans "will be subject to new safety and environmental requirements" before any drilling takes place.
The two cases constitute just one part of a broader legal tapestry concerning offshore drilling.
Other ongoing cases include a third 5th Circuit argument due to be heard in June.
In that case, Ensco v. Salazar Offshore Co., the government is seeking review of a district court order in February in which U.S. District Judge Martin Feldman of the U.S. District Court for the Eastern District of New Orleans held that Interior had 30 days to take action on five pending drilling permits.
The 5th Circuit stayed Feldman's ruling pending appeal (E&E Daily, March 16).
Feldman attracted headlines last year when he overturned the federal government moratorium on drilling following the Deepwater Horizon spill (E&ENews PM, June 22).
He is continuing to preside over two cases in his court.
The first case, set for trial next month, is another aspect of the Ensco case, on the merits of whether the government has unreasonably delayed issuing permits.
Then, in October, in Hornbeck v. Salazar, the case that prompted his order overturning the moratorium, Feldman is due to oversee a trial to determine definitively whether the moratorium was illegal.
Carl Rosenblum, a partner at Jones Walker in New Orleans who represents several industry parties in the Hornbeck case, said it is possible that what Feldman ends up deciding in Ensco will determine to some extent what happens in his case.
The moratorium, Rosenblum said, was an attempt by the government to "shut down an entire industry with the stroke of a pen."
Yet another aspect of the Hornbeck case remains outstanding.
The government has not yet indicated whether it will appeal a Feldman ruling that held Interior in contempt for imposing a second drilling moratorium that he believed defied his original order (Greenwire, Feb. 16).
A magistrate judge is currently considering what legal fees to award to Hornbeck. Rosenblum said he is seeking just over $1 million. He expects the government to appeal.
The Justice Department has repeatedly declined to comment on its plans.
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