Law360, May 11, 2011
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Oil and Gas
House Passes Bill To Speed Up Offshore Permitting
By Jesse Greenspan
New York (May 11, 2011) -- The U.S. House of Representatives approved legislation Wednesday that would speed up decision making on Gulf of Mexico drilling permits, and began debate on a separate measure that would open vast new offshore areas to oil and gas companies.
The two bills, along with a third that passed last week, were introduced by Rep. Doc Hastings, R-Wash., in an attempt to overturn policies put in place by the Obama administration after the Deepwater Horizon spill.
Hastings and his allies have particularly taken issue with what they call the administration's de facto drilling moratorium, saying it has sidelined workers and locked up American energy resources at a time of rising gas prices.
“A deadline is necessary in order to stop the endless bureaucratic delays and inaction that are currently taking place and provide companies with some certainty,” Rep. Doug Lamborn, R-Colo., said before Wednesday's vote.
The bill, known as the Putting the Gulf Back to Work Act, passed on a 263-163 vote, largely along party lines.
The bill passed on the same day that the Bureau of Ocean Energy Management, Regulation and Enforcement announced that it had approved a Royal Dutch Shell PLC plan to drill in five deepwater locations in the Gulf of Mexico, according to a report from the Wall Street Journal.
The plan is just the second, after Shell Offshore Inc.'s deepwater exploration plan in March, to be approved under the heightened environmental review rules installed in the wake of the Deepwater Horizon disaster.
The plan approved Wednesday includes five wells in approximately 7,200 feet of water 72 miles from the Louisiana coast, according to the Wall Street Journal.
Under the bill, the U.S. Department of the Interior would be required to either approve or deny all offshore permits within 30 days of receiving an application. Two extensions of 15 days each would be allowed as long as the applicant received written notice about the specific reasons for the delay.
Meanwhile, the department would have 30 days with no extensions to restart Gulf permits that were approved before the offshore drilling moratorium was imposed on May 27, 2010.
Supporters of the bill point out that the six-month official moratorium cost up to 12,000 jobs, and that seven deepwater and five shallow water rigs have left the Gulf of Mexico in the past year for other regions of the world.
Environmental groups have responded by accusing the bill's supporters of being in the pocket of large energy companies.
“We're alleging that there's a major case of amnesia going on,” said Bill Snape, senior counsel with the Center for Biological Diversity. “[The Deepwater Horizon] disaster was caused in large part because of the lack of environmental review.”
“[Regulators] are not going to have enough time to review these projects,” he said. “These things are just going to be steamrolled through.”
Snape also expressed concern over a provision in the bill that says any challenge to an offshore drilling permit, lease or plan must be brought in a Fifth Circuit district court.
“It is a factual reality that, in at least one case, a majority of the Fifth Circuit was not able to even rule on a climate change case because of oil company-related conflicts,” Snape said.
The bill also says federal actions “shall be presumed to be correct, and the presumption may be rebutted only by the preponderance of the evidence," and it stops advocacy groups from recovering attorneys' fees even when they win, according to Snape.
“They want home field advantage, and they want a 10-run lead,” he said.
A related Hastings-sponsored bill that passed on May 5 would require the Obama administration to move ahead with three lease sales in the Gulf of Mexico and one off the coast of Virginia that were delayed or canceled in the wake of the Deepwater Horizon spill.
And on Wednesday, the House began debate on a third Hastings bill that would open up large portions of the East Coast, Southern California, the Arctic Ocean and Alaska's Bristol Bay to offshore oil and gas drilling.
That bill is also expected to pass the House, though experts doubt any of the three bills will make it through the Democratic-controlled Senate and be signed by the president.
--Additional reporting by Carolina Bolado. Editing by John Williams.
© Copyright 2011, Portfolio Media, Inc
This article originally appeared here.