Texas sues feds over drilling ban

Houston Chronicle – Newswatch Energy

The state of Texas has filed suit against the federal ban on offshore drilling, saying the move violates a law requiring officials to consult with the states on such matters first.

The law, the Outer Continental Shelf Lands Act (OCSLA), requires the Interior Secretary to coordinate with states that might be affected by drilling decisions before taking any actions and to weigh the economic impact of actions such as the ban before imposing them.

The Department of the Interior imposed the ban earlier this year, in reaction to the massive oil spill that followed a blowout of a BP oil well in the Gulf of Mexico. The administration withdrew it when a federal judge in New Orleans blocked the effort and a number of companies filed suit. But on July 12 the DOI re-imposed the ban with some changes.

“The federal government ignored the State of Texas and failed to comply with the law when the Secretary of the Interior unilaterally imposed the Administration’s offshore drilling ban,” Attorney General Greg Abbott said in a statement. “Under federal law, affected states are guaranteed the right to participate in offshore drilling-related policy decisions, but the Obama Administration did not bother to communicate, coordinate or cooperate with Texas.”

An economic impact analysis done by Louisiana State University says Texas will suffer a $622 million decrease in Gross State Product due to the six-month moratorium, meaning the state meets the statutory definition of an “affected state” under the OCSLA and should be consulted, the filing says.

“… the Administration’s failure to consult Texas led the Secretary of Interior to implement an unjustified, arbitrary and capricious policy that will inflict economic harm upon coastal communities — particularly those that are most dependent upon offshore drilling for jobs and tax revenue,” according to the filing.

The suit asks the court to declare that the state be provided “a reasonable opportunity to participate” in the formulation of offshore policy and that economic impact of the moratorium must be a factor considered.

Kendra Barkoff, a spokeswoman with the Department of the Interior, could not comment on the specifics of the lawsuit, but said in an e-mail that the Gulf oil spill made it clear that better health, safety, and environmental standards for drilling operations are needed, as well as better capabilities to control wild wells in deepwater.

She also pointed out that the industry’s ability to respond to new oil spills was hindered because virtually all available spill response assets are busy with the BP spill.

“For all of these reasons, the temporary pause on deepwater drilling that Secretary Salazar has put in place is simply common sense, and we continue to stand behind it,” Barkoff said.

Lee Hunt, the Houston-based chief executive of the International Association of Drilling Contractors, said the group welcomed “any legal and legitimate action that will help bring an end to this moratorium.”

The Obama administration has suggested it could lift the moratorium before the six-month period expires in November, but Hunt said the drilling industry has received little guidance about how to bring about that early end either by complying with new safety requirements or otherwise.

Also on Wednesday, Justice Department attorneys asked the federal judge who overturned the initial six-month moratorium to throw out challenges to that ban because the government has imposed the new temporary ban.

U.S. District Judge Martin Feldman didn’t immediately rule on the government’s request after hearing arguments from lawyers in the case in New Orleans, according to the Associated Press.

The government says the lawsuit filed by several offshore service companies is moot in the wake of the new July 12 moratorium, but company lawyers says the second moratorium is a “carbon copy” of the first.

“What the government wants to do at every step of the way is put it off to another day,” said Carl Rosenblum, a lawyer for the plaintiffs, including Hornbeck Offshore Services.

A separate lawsuit filed by ESNCO Offshore Co. is challenging the new moratorium. Feldman also is presiding over that case but hasn’t ruled on it and said he hasn’t passed judgment on the new moratorium yet.

A few times during the hearing, Feldman alluded to complaints he should have withdrawn from the case because of his investments in several oil and gas companies. Several environmental groups that support the moratorium asked Feldman to recuse himself, but the judge refused.

“Contrary to some uninformed opinion that’s been expressed, I don’t intend to prejudge anything,” he said.

Read the full filing from the Texas attorney general here.

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