The same Louisiana federal judge who overturned the Obama administration's Gulf drilling ban recently took the Administration to task for what he called “increasingly unreasonable” delays in making decisions regarding permit applications for drilling in the Gulf.
After the Deepwater Horizon disaster last April, the Interior Department imposed two consecutive blanket moratoriums on drilling in the Gulf, which were in effect until October 12. According to the court, however, “even after [Interior Secretary Ken Salazar] formally lifted the second moratorium ... permits for deepwater drilling activities have not been processed; little to no deepwater drilling has resumed.”
This is due in large part to new standards imposed by the Interior Department that serve as prerequisites to a drilling permit being granted. In other words, in order for its drilling permit to even be processed, a company must show that it is in compliance with the new standards.
Backlogged drilling applications
At issue in the action, brought by Ensco Offshore Co. against Salazar, was what Ensco contended were “intentional” delays by the Interior Department in processing its application. Ensco says that its drilling permits have been on hold -- neither approved nor denied by the government -- for at least four months.
“The government responds,” the court wrote, “that its strained resources and the demands of regulatory compliance necessarily produce the delays at issue.”
“It is undisputed,” the court said, “that before the Deepwater Horizon disaster, permits were processed, on average, in two weeks' time. In stark contrast, the five permits at issue have been pending from four to some nine months.”
The court wrote that the Outer Continental Shelf Lands Act (OCSLA) -- a 60-year-old piece of legislation establishing federal control over seabeds outside state boundaries -- “establishes a non-discretionary duty on the Department of Interior to act, favorably or unfavorably, on drilling permit applications. Although OSCLA grants the Secretary discretion to decide whether to review permit applications ... the Court holds that once the Secretary exercises that discretion, the government is under a duty to act by either granting or denying a permit application within a reasonable time.”
The court's order signals a potentially decreasing amount of patience -- at least in the judiciary -- with regulatory delays stemming from the ten-month-old spill. The court wrote that “in the wake of the disastrous BP spill, some delays are of course understandable.”
“But now, nearly a year after the spill occurred,” the court wrote, “delays, particularly those of the length at issue here, become increasingly unreasonable … The permitting backlog becomes increasingly inexcusable. Perhaps it is reasonable for permit applications to wait more than two weeks in a necessarily more regulated environment. Delays of four months and more in the permitting process, however, are unreasonable, unacceptable, and unjustified by the evidence before the Court.”
The judge who wrote the order -- Martin L.C. Feldman -- is controversial, especially with regard to oil-related litigation. He is the same judge who, last June, overturned the Obama administration's moratorium on oil drilling in the Gulf, which had been imposed in the weeks following the Deepwater Horizon spill.
Shortly after that order was issued, it was reported that Judge Feldman has “extensive investments in the energy industry,” as the New York Daily News put it. The paper reported that Judge Feldman held around $15,000 in Transocean stock in 2008. Transocean owned the Deepwater Horizon rig, which caused the environmental calamity that consumed the world last April and May.
The court ordered the Interior Department to act on Ensco's permit application within thirty days of the order, “and simultaneously report to the Court its compliance.”