|
Central Gulf Lease Sale 201 canceled Department of Interior halts all offshore oil and gas lease sales to assess hurricane damage, industry impacts on Louisiana’s coast Ray Tyson For Petroleum News
There will be no more oil and gas lease sales in federal waters of the Gulf of Mexico until an Environmental Impact Statement is prepared that takes into account the effects of hurricanes Katrina and Rita on coastal areas of Louisiana, according to an Oct. 24 out-of-court settlement between the State of Louisiana and the U.S. Department of the Interior.
The settlement resulted in the immediate cancellation of the traditional Central Gulf of Mexico lease sale held in March. It’s also believed to be the first time a U.S. Gulf lease sale was canceled due to environmental concerns.
Louisiana Gov. Kathleen Blanco, in a press conference televised on the Internet, hailed the settlement as a clear victory for Louisiana and states’ rights.
“For the first time in the history of Louisiana we have proven that when it comes to oil and gas development off our coast, it is no longer business as usual,” Blanco said.
The governor said that a “complete” EIS, to be prepared by the U.S. Minerals Management Service, would include the “cumulative impacts” of offshore leasing activity on Louisiana’s coastal zone, in addition to hurricane damage that she said turned 217 square miles of Louisiana’s coast into open water.
“As I have said many times before this fight is not with the oil and gas industry,” Blanco said. “It is with the federal government. It’s abundantly clear that a lot has changed on our coast and all of those changes must be considered by MMS.”
Louisiana filed against feds in July The State of Louisiana filed suit against the federal government in July, attempting to stop Western Gulf of Mexico Lease Sale 200, held in August, on the grounds that MMS failed to properly assess hurricane damage before going ahead with the sale. A federal judge allowed the sale to proceed and scheduled a November trial on the merits of the case.
As a result of the out-of-court settlement reached ahead of the trial, Louisiana agreed to dismiss its lawsuit, and the U.S. Interior Department agreed to halt further leasing in the Gulf of Mexico until a more thorough EIS could be prepared.
MMS canceled Central Gulf of Mexico Lease 201, the last sale in the agency’s current five-year leasing program, and moved it into the proposed 2007-2012 leasing plan. Tracts from Sale 201 are expected to be rolled into Central Gulf Lease Sale 205 proposed for September. The new five-year leasing program likely will be approved next spring.
Under the agreement, Louisiana forgoes any challenge to Interior issuing leases to companies for blocks they acquired in Western Gulf Lease Sale 200, which generated a surprising $340.9 million in high bids from the 62 companies that participated in the sale. MMS believes that development of these leases could result in production of 136-to 252 million barrels of oil and 0.810-to 1.440 trillion cubic feet of natural gas.
“Resolving this dispute by agreement rather than litigation benefits our nation’s energy security by assuring we can move ahead on the leases issued in Lease Sale 200,” said Steve Allred, Interior’s assistant secretary for land and minerals management. “The agreement also sets the next five-year lease program on the right track.”
State says it will have approval But until MMS has completed its environmental analysis, no exploration plan will be allowed on Sale 200 leases “until each plan reflects an appropriate environmental analysis and (is) approved by the state,” Blanco said.
However, Interior’s interpretation of this stipulation says nothing about Sale 200 exploration plans requiring state approval. “Louisiana also forgoes any challenge under the National Environmental Policy Act to Interior’s approval of exploration plans for the Lease Sale 200 parcels, provided Interior has completed an environmental assessment during a period of time specified in the agreement.”
Regardless, Interior said it would continue with the preparation and completion of a NEPA EIS for all 11 sales proposed in the 2007-2012 lease program, and that it would take into account the impact of Katrina and Rita on Louisiana’s wetlands and infrastructure. Under the agreement, Interior pledged not to offer any new leases off Louisiana’s coast before it issues the “Record of Decision” on the new EIS.
Thousands of miles of pipeline are said to crisscross the state’s coast, delivering nearly one-third of the U.S. oil and gas supply.
“Our disappearing wetlands protect these critical resources, and our nation’s economic and energy security depends on Louisiana,” Blanco said. “These storms have strengthened our resolve as a people and have renewed the idea that a restored and protected Louisiana coast is fundamental to our future.”
A thorough environmental assessment of Louisiana’s coastal zone also would prove that additional federal money is desperately needed for coastal restoration, Blanco said, noting that 82 percent of Louisiana voters already have approved a ballot measure dedicating “every penny” the state receives from offshore revenue sharing to coastal protection and restoration.
“Some continue to ask me if this lawsuit is really about money, if it is really about oil and gas revenues,” the governor added. “This lawsuit and this agreement are about states’ rights and ensuring that the federal government abandons its ‘business-as-usual’ approach and recognize the serious impacts to Louisiana’s coast from offshore oil and gas leasing.”
| 