SWESC Statement on U.S. District Court Ruling on Ensco Permits

HOUSTON, Feb. 17, 2011 /PRNewswire-USNewswire/ -- Jim Noe, Executive Director of the Shallow Water Energy Security Coalition, released the following statement regarding today's U.S. District Court ruling in the Eastern District of Louisiana compelling BOEMRE to act within 30 days on five pending permits related to Ensco plc:

"Today, a Louisiana district court judge demanded in no uncertain terms that BOEMRE break the logjam that is stalling permits for Gulf drilling. In keeping with the requests this week of Senators Vitter and Landrieu, the court action should compel the Department of the Interior to apply greater clarity and timeliness to the Gulf of Mexico permit issuance process.

"The fact is, the current pace at which BOEMRE issues permits is crippling our industry, which just last week saw the demise of Seahawk Drilling Inc. – one of the largest shallow water drillers – thanks to the permitting slow-down. Drilling jobs, support workers and the Gulf region's fragile economy have been needlessly placed in peril. We hope today's court action will at long last compel the Interior Department to refocus on its statutory mandate to develop U.S. offshore resources. As the judge signaled today, it is high time BOEMRE created a more efficient, risk-based and timely method for issuing permits for responsible offshore energy production."

Excerpts from the judge's decision in Ensco v. Salazar:

"Ensco has incurred significantly reduced standby rates on its rigs and has been forced to move some of its rigs to other locations around the world. It is unclear when Gulf drilling will resume.  The government's assurances have been inconsistent." (p. 3)

"Although the Outer Continental Shelf Lands Act grants the Secretary discretion to decide whether to review permit applications, the Court holds that once the Secretary exercises that discretion, the government is under a duty to act by either granting or denying a permit application within a reasonable time.  Not acting at all is not a lawful option." (p. 7)

"To discharge the Secretary's oversight responsibility, without any time-sensitive obligation to do so, as the government now starkly urges, unmasks the fiction of transparency in government." (p. 7)

"The government maintains that Congress's decision to impose no time frame on BOEMRE's review of applications to drill was intentional—and thus blessed that the decision of whether to act on permit applications belonged to the unchecked whim of the administrative process.  Its view would produce autocratic discretion at best." (p. 13)

"BOEMRE has taken over management from a formerly crumbling and disreputable agency; the leaking culprit well has been contained; the revised regulations are no longer new; and the threat of rigs leaving the Gulf becomes more forceful each day.  The permitting backlog becomes increasingly inexcusable. " (p. 13)

"...it does not appear that ordering the government to act here would disrupt a queue; indeed, it appears that the government has considered no applications for any activities falling within the scope of the moratorium. Where there should be a queue, there is instead an untended pile." (p. 14)

About the Shallow Water Energy Security Coalition

The Shallow Water Energy Security Coalition comprises a group of companies—Apache Corporation, Arena Offshore, Chevron, Delta Towing, Dynamic Offshore Resources, Energy XXI, Ensco, Hall-Houston Exploration, Hercules Offshore, Phoenix Exploration, Rowan Companies, Seahawk Drilling, W&T Offshore, and Walter Oil & Gas— that explore, develop and drill for natural gas and oil in the shallow waters of the Gulf of Mexico.  The coalition was established to enhance the understanding of shallow-water operations as policymakers develop legislative and regulatory responses to recent events. Follow us on Twitter @ShallowWaterNRG

SOURCE Shallow Water Energy Security Coalition