The American Oil and Gas Reporter - January 2012 - (Page 42)

Gulf Of Mexico Lawsuits Challenge Seismic Permitting By Gregory DL Morris Special Correspondent Oil and gas producers do not always see eye to eye with federal regulators, but industry associations were quick to intervene when environmental groups sued regulators over their permitting of seismic surveys, as well as exploration and production in the Gulf of Mexico. With one major exception, most of the major cases were stayed, pending settlement negotiations, by the end of 2011. “There is a whole galaxy of litigation,” says Dan Naatz, vice president of federal resources and political affairs at the Independent Petroleum Association of America. He says the swarm of cases can be divided roughly into two types: one addressing seismic surveying, and a group addressing the regulatory and permitting process. The lead case involving seismic is Natural Resources Defense Council v. Salazar; the lead case in the permit group is Defenders of Wildlife v. Salazar. But in December, a new case was filed, Oceana v. Bureau of Ocean Energy Management, by a group of environmental organizations challenging BOEM’s environmental review and approval of Western Gulf of Mexico Lease Sale 218. G.C. “Chip” Gill, president of the International Association of Geophysical Contractors, notes that Lease Sale 218 was the first held since the Deepwater Horizon blowout and spill in April 2010, and while it went forward on Dec. 14 in spite of this new lawsuit, it was uncertain whether BOEM would issue leases won in the sale. He adds that environmental groups have sent another notice of intent to sue letter to BOEM and the National Oceanic and Atmospheric Administration’s National Marine Fisheries Service (NMFS), which regulates the provisions of the Endangered Species Act and Marine Mammal Protection Act (MMPA), notifying of their intent to sue on myriad additional environmental concerns. At stake, Gill warns, is the practical ability of the geophysical industry to acquire seismic data in the Gulf. Court Actions According to court documents, NRDC v. Salazar was filed June 30, 2010, in the U.S. District Court for the Eastern District of Louisiana in New Orleans. Joining NRDC as plaintiffs are the Center for 42 THE AMERICAN OIL & GAS REPORTER Biological Diversity, Gulf Restoration Network, and the Sierra Club. Named as defendants are the U.S. Department of the Interior, Secretary Kenneth Salazar, the Bureau of Ocean Energy Management, Regulation and Enforcement, and BOEMRE Director Michael Bromwich. Joining the suit as a defender-intervernor is a trade association group led by the American Petroleum Institute and IAGC, and joined by IPAA and the U.S. Oil & Gas Association. Chevron Corporation also has intervened on its own behalf. NRDC’s complaint challenges the former U.S. Minerals Management Service’s (now BOEMRE) July 1, 2004, decision to issue a finding of no significant impact for geological and geophysical exploration for mineral resources in the Gulf of Mexico Outer Continental Shelf; the agency’s conclusion that no environmental impact statement is required to assess the impact of such exploration activities under the National Environmental Policy Act; BOEMRE’s continued failure to produce an EIS, notwithstanding significant new information indicating that a full NEPA review is required; and its decision to allow exploration to go forward without any mitigation before an EIS is complete. Defenders of Wildlife (DOW) v. Salazar was filed May 17, 2010, in U.S. District Court for the Southern District of Alabama in Mobile. Defender-intervernors in this case are API, IPAA, USOGA and the International Association of Drilling Contractors. Chevron, Anadarko Petroleum and Apache Corp. also have intervened individually. DOW’s complaint alleges DOI violated NEPA and the Administrative Procedure Act in by authorizing exploratory drilling operations in the Gulf of Mexico, including BP’s deepwater Macondo exploratory drilling operation. “As is readily apparent from the April 20, 2010, blowout at the Deepwater Horizon, which has resulted in the release of (more than) 5 million gallons of oil into the waters of the Gulf of Mexico, exploratory drilling operations are actions that can individually and cumulatively have a significant effect on the environment,” DOW’s filing declares. Despite this, the complaint continues, MMS routinely grants categorical exclusions from NEPA review to exploratory drilling operations on the basis that these operations are not likely to have a significant effect on the environment. “In violation of NEPA and its own reg- ulations, MMS has authorized additional categorical exclusions for (more than) 20 exploratory wells and drilling operations in the Gulf since the April 20, 2010, blowout, with (more than) 15 of these exploratory wells in waters classified as ‘deep water,’ pursuant to MMS regulations,” the complaint reads. “In violation of NEPA and its implementing regulations, MMS also has failed to prepare a supplemental environmental impact statement in response to the significant new information presented by the Deepwater Horizon incident.” Joining as plaintiffs in Oceana v. BOEM are Defenders of Wildlife, NRDC and the Center for Biological Diversity. The complaint, filed in the U.S. District Court for the District of Columbia, alleges that in conducting Lease Sale 218, BOEM relied on a supplemental environmental impact statement that failed to adequately consider the impacts of the Deepwater Horizon spill; did not incorporate new understandings of the risks posed by offshore drilling, particularly in deep water; ignored new information regarding the oil spill containment and response capabilities of industry; and failed to assess impacts using a post-Deepwater Horizon base line for species and habitat. In addition, the plaintiffs allege the SEIS failed to adequately consider alternatives. Intervener-Defendant The permitting group of cases (DOW) primarily concerns permits issued before the Macondo disaster, notes IPAA’s Naatz, although a new front has been opened by organizations bringing actions claiming permits issued under post-Macondo rules have not met new standards. In most of the cases, according to court documents, the original complaints were filed by one or more environmental groups against DOI, Secretary Salazar, and a specific agency within DOI. Many of the cases originally named the MMS as a defendant, which was succeeded in the Obama administration’s post-Macondo reform efforts by BOEMRE (AOGR, July 2010, pg. 37), which was later divided into the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement (AOGR, November 2011, pg. 20). Naatz says IPAA became an intervener-defendant in several of the high-profile cases because of the potential damage to its members if the plaintiffs prevailed. IPAA has filed amicus curie briefs in

Table of Contents for the Digital Edition of The American Oil and Gas Reporter - January 2012

The American Oil and Gas Reporter - January 2012
Oil & Gas Counts
State Legislative
Industry Digest
Tech Connections
Washington Watch
Federal Legislation
Gulf of Mexico
Resource Plays Providing Wealth of Opportunities
Tight Plays Poised to Transform U.S. Crude Supply
El Paso Project Optimizes Eagle Ford Completion Design
Real-Time Forward Modeling Improves Bakken Horizontals
Cover Story
Financial Firms Expand Oil and Gas Divisions
Multicomponent 3-D Poised for Growth in Shale Plays
Cloud Computing Driving Business Step Changes
Advanced Attributes Improve 3-D Interpretation
3-D Data Improve Knowledge of Shale Heterogeneity
HBUR RSS Solves Granite Wash Drilling Challenges
Technologies Improve Production Consistency in Resource Plays
SaaS Helps Operator Streamline Data Management
Automation Enhances Operations in Challenging Applications
Dispersant Chemistry Combats Plugging in Low-Gravity Oil Wells
New Technologies Optimize Production
Drilling Regs
The Presidential Papers
Energy Education
Shale Gas
New Lits & Products
Computer Currents
Industry Focus
Classified Advertising
Advertisers Index

The American Oil and Gas Reporter - January 2012