Judge OKs Post-Gulf Spill Oil Leases

(CN) - Federal regulators did enough research to justify the government's sale of offshore oil and gas leases in the wake of the Deepwater Horizon oil spill, a federal judge ruled.

The Deepwater Horizon oil rig exploded and caught fire on April 20, 2010, and its Macondo well released nearly 5 million barrels of oil into the Gulf of Mexico.

The spill prompted the Department of the Interior to declare a 6-month moratorium on deepwater drilling on the Outer Continental Shelf.

In light of the disaster, the Bureau of Ocean Energy Management prepared a supplemental environmental impact statement for its sale of two leases in the Gulf, Lease Sale 216/222 and Lease Sale 218.

Lease Sale 216/222 is in what federal regulators call the Central Planning Area of the Gulf, where the Deepwater Horizon was. Lease Sale 218 is in the Gulf's Western Planning Area.

The agency auctioned off Lease 218 in December 2011 - the first offshore lease sale after the Deepwater Horizon explosion.

The BOEM issued the final environmental impact statement for Lease Sale 216/222 in January 2012. The report stated that "barring another catastrophic oil spill, which is a low probability accidental event, the adverse impacts associated with the proposed [Central Planning Area] lease are small."

The agency held the 216/222 lease sale in June 2012, giving rise to a lawsuit from Oceana and three other environmental groups, which challenged the sales under the National Environmental Policy Act and the Endangered Species Act.

The groups also sued the National Marine Fisheries Service for not issuing a biological opinion in the spill's aftermath, in violation of the Administrative Procedure Act.

Biological opinions document the fisheries agency's stance on whether a federal action will jeopardize endangered species.

Underscoring the lawsuit's importance for the oil and gas industry, several heavyweights intervened on behalf of the federal government, ExxonMobil and ConocoPhillips among them.

Oceana argued that the BOEM had violated the National Environmental Policy Act by failing to take a "hard look" at the environmental impacts of the lease sales, and had run afoul of the Endangered Species Act by failing to protect listed species.

U.S. District Judge Rudolph Contreras came down on the feds' side Monday and dismissed the lawsuit.

In its environmental impact statement the BOEM acknowledged it had incomplete or unavailable information about some Gulf of Mexico resources, including sea grass, sea turtles, coastal and marine birds and Gulf sturgeon.

The environmentalists said the BOEM violated federal law by not explaining why it called the cost of getting the information exorbitant.

But Contreras was satisfied with the agency's answer that research into the spill's effects is continuing, will take years to complete and could not be finished in time for the lease sales.

"BOEM also referenced the experience of the Exxon Valdez oil spill, and the fact that it took so many years to get viable scientific information after that disaster, as an example," Contreras noted in the 64-page order.

Contreras added that "BOEM could have waited until all the essential post-oil spill data became available before it moved forward with the lease sales," but federal law does not require the agency "to halt action in the face of uncertain information." The judge was unmoved by Oceana's claims that the BOEM had violated the Endangered Species Act.

Contreras unraveled the environmentalists' argument with a nod to the three stages set out for oil and gas activities by the Outer Continental Shelf Lands Act: leasing, exploration and development.

He found the leasing stage is not the correct juncture to worry about impacts to threatened species because federal law lets the Department of Interior suspend drilling if there's a threat to marine life or the environment.

"There is nothing about these particular lease sales that would jeopardize the endangered species located in the Gulf of Mexico. It is at later stages of OCS development that jeopardy, if at all, is more likely to occur," the District of Columbia-based judge wrote.

Contreras also dismissed Oceana's contention that the National Marine Fisheries Service is unreasonably delaying its release of the new biological opinion.

The agency estimates the study will end in November 2015.

Contreras found no need to rush the report writing, "An order compelling the agency to issue its BO immediately might undermine the entire process, and arguably have even harsher consequences than any delay."

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