Suit fails to block oil lease sale in Gulf of Mexico

12 13, 2011 by USA Today

The federal government will move ahead with the first auction of offshore petroleum leases in the Gulf of Mexico since the Deepwater Horizon disaster — despite a lawsuit challenging the sale.

The suit filed Tuesday in U.S. District Court in Washington claims that the federal government failed to take steps to avoid a repeat of BP's disastrous oil spill in 2010, which leaked more than 200 million gallons of crude oil into the Gulf of Mexico.

The suit was filed by Oceana, Defenders of Wildlife, the Natural Resources Defense Council and the Center for Biological Diversity.

Attorney Catherine Wannamaker said the action is not intended to stop the sale, but the groups want the court to vacate an environmental analysis of the sale based on claims within the lawsuit. That could make the sale moot, although a judge eventually could toss the analysis but allow the sale to stand, she said.

The Interior Department's Bureau of Ocean Energy Management, Regulation and Enforcement plans to auction 3,900 blocks off the Texas coast on Wednesday in New Orleans. The sale covers about 20.6 million acres.

The tracts are far from the site of the BP spill, which began in April 2010 about 50 miles southeast of the mouth of the Mississippi River.

Interior Department spokeswoman Melissa Schwartz said the bids will be opened as scheduled. She said the agency could not comment on the suit.

According to agency figures, the sale has already attracted 241 bids from 20 companies on 191 tracts. The last western Gulf sale in August 2009 drew 189 bids from 27 companies on 162 tracts.

Wannamaker said the offshore regulatory agency "is continuing the same irresponsible approach that led to the BP Deepwater Horizon disaster and harm still being felt in the Gulf."

"It's easier for the government and oil companies to return to business as usual without the oil spill's impacts on the Gulf, but it's illegal and irresponsible," said Wannamaker, an attorney for the Southern Environmental Law Center, which is representing the environmental groups.

The suit alleges that the government has failed to advance preparedness for offshore oil spills and analyses to prevent oil spills since BP's Macondo well blowout. The environmental groups said the government did not consider the merits of a delay in order to gather more information.

Before the blowout, the government generally held two offshore Gulf leases annually — one for the central Gulf off the coasts of Louisiana, Mississippi and Alabama and a second for the western Gulf, mostly off the Texas coast.

The western Gulf sale in recent years has been focused on potential natural gas finds, while deepwater oil has been more the target in the central Gulf, where the Macondo spill occurred.

Randall Luthi, head of the National Ocean Industries Association, an offshore trade group, said increased risk of lawsuits could chill industry plans to drill offshore, along with a drawn-out permitting process that is "below what is needed to have robust activity in the Gulf." He also said higher minimum bid requirements for deepwater leases could discourage some bidding.

The government has said those minimums were raised to reflect fair market value.

"It probably won't be a record sale," Luthi said of Wednesday's auction. "But it is a sale."