Interior Secretary, Petroleum Industry Revisit Alaska Oil Lease Ruling

In its ruling, the court vacated the entire 2007-2012 Outer Continental Shelf oil and natural gas leasing program two years after lease sales began.

The American Petroleum Institute today filed a separate petition seeking a rehearing of the case.

Both petitions ask the court to change its remedy from "vacate and remand" to "remand."

At Salazar's request, the Department of Justice is asking the court to confirm its interpretation of the decision as not requiring retroactive invalidation of prior leases.

The Interior Secretary said in his argument that vacating the entire 2007-2012 Program pending reconsideration "will cause broader disruptions that would be both severe and unnecessary."

He argues that vacating the five-year lease program might require interruption of exploration and production activity in the Gulf of Mexico and could call into question the validity of 487 leases already issued in the Chukchi Sea and 1,854 more issued in the Gulf of Mexico.

Salazar is asking that the court allow his department to move forward and fix the shortcomings in the environmental analysis for the five year plan without developing and approving an entirely new five year program, which could take until 2011.

Oil rig in the Beaufort Sea flares off excess gas. (Photo courtesy WWF)

"The previous administration's failure to apply the law has resulted in widespread uncertainty in the oil and gas industry and put reliable conventional energy production from offshore areas at risk," Salazar said.

"We must fix the problems the court identified and put oil and gas leasing decisions back on firm scientific footing," the secretary said.

The court determined that in formulating the current five year plan the Bush administration erred in only considering the environmental sensitivity of shoreline areas, rather than considering the environmental sensitivity of the entire leasing area, as required by law.

"The court's decision should not stand as an impediment to continued production of oil and natural gas from leases already issued in the Outer Continental Shelf and to leasing in the future under the five-year program," said American Petroleum Institute President Jack Gerard.

"Offshore oil and gas leasing under the program is responsible for thousands of well-paying American jobs, over $10 billion in much-needed revenue for federal, state and local governments," he said. "The nation's energy security depends upon these resources."

In its request for rehearing, the American Petroleum Institute asks, "Should the court vacate the 2007-2012 five-year leasing program and thus ... void the more than 2,300 leases that have already been purchased under the program for more than $9.9 billion, on which 47 wells have already been drilled at an estimated cost of more than $3 billion resulting in fourteen commercial discoveries to date with four wells already in production, and also void all future scheduled lease sales because a single, curable deficiency was identified in that program ..."

The original lawsuit was brought by the Native Village of Point Hope, Alaska Wilderness League, Pacific Environment, and Center for Biological Diversity against the United States Department of the Interior.

The court granted the American Petroleum Institute leave to intervene, and granted leave to participate as amici curiae to Oceana, Ocean Conservancy, The National Audubon Society, The Wilderness Society, and the Natural Resources Defense Council.

"The court's ruling provides Secretary Salazar a unique opportunity to follow through on his previously-stated commitment to 'restore an orderly process to our offshore energy planning,' and a balance 'that allows us to protect our signature landscapes and cultural resources,'" said David Dickson, Western Arctic and Oceans Program director for Alaska Wilderness League.

The Bush administration pushed through the offshore drilling program without key baseline data for the Arctic offshore region - a deficit reiterated by Senator Lisa Murkowski, an Alaska Republican, in a letter to Salazar last week. The Bush plan was approved despite questions raised by several federal agencies, including U.S. Fish Wildlife Service, NOAA Fisheries Service and the U.S. Environmental Protection Agency.

In its April ruling, the court called the Bush administration's assessment "irrational" and said that while it was willing to give federal officials substantial benefit of the doubt, it was not willing to give the Department of the Interior "carte blanche" to ignore science, traditional ecological knowledge, and the law.

"The Bush administration's offshore drilling program zoned the fragile Arctic ecosystem as a national oil and gas sacrifice area and would irreparably harm at-risk wildlife and traditional Alaska Native subsistence and fishing communities," said Whit Sheard, Alaska program director for Pacific Environment. "It is time to focus our attention on protecting the rapidly melting Arctic and developing a national energy strategy that replaces the failed policies of the past."

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