US Federal Court Throws Out DOI's 5-Year Oil, Gas Leasing Plan

WASHINGTON (Dow Jones Newswires), Apr. 17, 2009

A federal appeals court Friday threw out the Department of the Interior's 2007-2012 five-year oil and natural gas leasing plan -- potentially halting development in the Gulf of Mexico and Alaska -- telling the agency it needed to better consider environmental impacts.

The decision further delays exploration and development of Outer Continental Shelf resources at a time when energy analysts warn that more investment is needed in the sector to prevent price spikes in coming years.

An Interior spokesman couldn't immediately say what the impact of the ruling would be for development in lease sales already held under the five-year plan in the Gulf of Mexico, but lawyers who brought the case against the agency said it should definitely stop work in Alaska.

The Washington federal court of appeals upheld a coalition of environmental organizations' claims that the Interior Department's assessment of the environmental sensitivity of some areas was "irrational." The agency must first reconsider its assessment before moving ahead with the lease sale program, particularly acreage in the Beaufort, Bering, and Chukchi Seas off the coast of Alaska.

"This gives Interior Secretary Ken Salazar a legal reason to revisit these lease sales," said Peter Van Tyne, the lawyer who represented several Alaska native and environmental groups in the claim.

The American Petroleum Institute said in a statement that the ruling could deal a "devastating blow to the economy" if the decision delayed development of domestic oil and natural gas resources.

DOI spokesman Frank Quimby said Interior and Department of Justice lawyers were reviewing the decision, and hadn't yet ascertained the full impact of the ruling on its five-year program.

Oil majors Royal Dutch Shell (RDSA) and ConocoPhillips (COP), which have spent millions of dollars on Alaska lease sales and seismic surveys, couldn't immediately comment on the ruling and how it would affect their operations.  

Copyright (c) 2009 Dow Jones & Company, Inc.


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Marti G. | Apr. 25, 2009
We have a democratic party that is about government control. I believe the oil and gas companies have complied to all the environmental regulation they need to. It will never be enough, and the American people are suffering because of a few radical groups like the Siera Club. I support oil,mining,logging.

Marti G.

Mark | Apr. 24, 2009
We are in an oil glut. So why is Saudi Aramco and Shell's "Motiva Industries" still buying 100% Saudi/OPEC oil? I believe Motiva is the largest purchaser of imported oil.

We need to be drilling for our own and stop padding the pockets of the people who want to do us harm. This will no doubt stimulate our economy.

Mike Mcleod | Apr. 24, 2009
An Obmination!! Our Government at it best!! However, on the other hand, this might Strengthen Energy Prices and stimulate more Overseas Exploration!! Maybe a little good for the Oil Patch in that respect. The Government wants to do all it can to Discourage any Domestic Exploration!!



Martha | Apr. 24, 2009
This is really bad news for the oil and gas industry. And this industry has far reaching arms into all aspects of the U. S. economy and the world economy. Amid this recession, this will increase the domino effect on employment, housing, financial, and associated human resources and families. Most everyone is struggling now to keep a roof over their head, and food on the table, and health insurance. As a landman in the industry, I am still employed, but my husband is not. I have 2 kids (1 special needs) and our COBRA insurance runs out at the end of April. I think I've found adequate insurance to pick up. So I'm luckier than most. The most important effect of all this is the hopelessness people are surrounded with.

Griz | Apr. 24, 2009
More change we can believe in. Let's see, less than a year ago gasoline was 4 bucks a will return. Next time it will be even worse.

All you folks need to WRITE YOUR LAWMAKERS, and voice your opinion. They should be held accountable for allowing actions such as this that will ultimately hurt America. This is not about "protecting oil companies;" it is about America's energy security and getting off foreign oil! We have oil in America, but the environmentalists want us to ride a mule to work, catch the manure in a sack, and then recycle it without producing CO2! Yea right!

Hold lawmakers ACCOUNTABLE for allowing plans to drill, to be delayed!


Lee Morrison | Apr. 24, 2009
I think that the U.S., as a nation, must have a death wish. Ah well, as long as there is a determination to further cripple the U.S. oil industry, we Canadians can smile in the knowledge that the market for our so-called "dirty oil" is safe. $100 imported oil - soon returning to a refinery near you.

Brian Partridge | Apr. 22, 2009
I guess those in Washington and the environmental organizations think that the oil and gas industry is like same great big light, you can turn it off and turn it on when ever you want. Well that ain't how it works. These people don't care that thousands of oil workers are jobless right now, no telling for how long. On top of that, our president is worried about green energy and trying to get on Cuba's good side when his own country is headed toward another great depression.

Ernie | Apr. 21, 2009
This has been talked to death already. It's like a horse you put blinders on them so they only see what you want them to see. Gov. and O & G Companies are great at it, but the biggest and the best at this is the Enviormentalists. Like anything they talk and talk that great brand of manure and so many people out there eat it up like the sweetest candy on the market. The things they propose 9 out of 10 times are child like. If anyone of them including Al Gore or Obama want to do some good, save us first then the world. OIL IS KING. Check everything you do, it is produced by oil. We are going out with a whimper guys. Remember this NIMBY (not in my back yard), then think of the people yelling the loudest and you will see the ones who are really destroying our great planet.

Dennis Sensat | Apr. 21, 2009
I'm all for protecting the environment. I think that the lawyers who filed this suit should not be using any petroleum products, no gasoline, jet fuel, plastics, asphalt, etc.

I have never heard any mention of a critical consequence of shutting down (or slow down) of the oil industry, experienced personnel finding other careers. Then when there is an increase of activity, inexperienced personnel are placed in positions that could really effect the environment. In other words, it is critical that the oil industry not have all the ups and downs which are so common.

Roger | Apr. 21, 2009
The government needs to quit messing around and just let the oil and gas companies go broke. Keep putting up more environmental walls. Secretary Ken Salazar you're a joke! Oh by the way, we don't need any of your TARP money!!

Robert | Apr. 21, 2009
Does anyone realize that this decision could effectively shut down the Gulf of Mexico Oil & Gas Operations? They obviously did not think this through!

Kevin | Apr. 21, 2009
For anyone in Colorado, were not surprised at this, as Ken Salazar was one of our representatives. He contributed to the unprecedented state regulations regarding permitting, etc, in the Colorado Oil & Gas industry, which tightened the noose around the necks of O&G companies, impacting the thousands who work in this industry.

Bob | Apr. 20, 2009
Anybody know who the judge was? Federal Appeals Circuit judges are appointed for life, and by far most of them were appointed by Republican administrations. Paul R. Michel was appointed Chief Judge in 2004. That's not to say that the judge wasn't "less than brilliant".

Personally I'm more interested in getting this administration to promote "clean burning" domestic natural gas.

Heath S. James | Apr. 20, 2009
I feel the environment is a worthy cause; however, the domestic oil & gas industry has already taken a tremendous blow in the economy with no end in sight. President Obama stated he wanted independence from foreign oil, how can that pledge take place if the DOI keeps shutting down drilling operations? If the rigs are drilling, the economy is flourishing and jobs increase which increases spending thus improving the economy even more. Pretty basic if you ask me! Is there a conspiracy here? Remember, Natural Gas is an alternative fuel source and is cleaner burning than coal.

Rick | Apr. 20, 2009
Maybe the less than brilliant judge that ruled on this should also force opponents to examine the environmental, social and economic impact of bringing oil over in leaky tankers.


The liberal Dems are dead set on polices that will destroy the last of the American Economy. We all need to change the ownership of one or more houses of congress to restore the checks and balances.

Gene Mall | Apr. 20, 2009
Yes here we go again and the rest of the world goes on drilling off their costs and getting millions of barrels of oil that will be sold to us for a small fortune. Then when oil spikes there will be a windfall profits tax. I would like someone to tell me who invests more in their infrastructure than big oil? Railroads come next but who spends more to see that we have jobs in the future?

Jerry Lopez | Apr. 20, 2009
What happened to Newt's "Drill Here, Drill Now, Pay Less"? Complacency again until the gasoline price goes up to $4/gal, and everybody blames the oil companies, and the powers that be in the oil companies act like republicans and do nothing to defend themselves or the serious issues of import reliance. In the meantime, good people and careers are being delayed or destroyed, and the infrastructure of oil & gas industry is once again losing good people.

Chris | Apr. 20, 2009
This should surprise no one. Obama etc. have an ax to grind with the industry. They simply have no clue what so ever how the industry works. I think this is painfully obvious. Seriously, the big oil companies NEED to sit down with him and tell him just how many people this industry employees!!!

Brian Partridge | Apr. 20, 2009
Go Obama, his administration, and the groups that are putting us in a bind. Myself and the other few thousand people that work in the oilfield are laid off right now cuz no one can make up their mind. It's articles like this one, that don't give us any hope of anything even showing that the industry is going to pick back up. We need to worry about our own country, because whether or not we are headed toward a depression, some people would disagree on that, but it's true, and this thing is only going to get worse. Somebody needs to wake up from their dream and take a look around to see what's going on. The hard working families of America are in trouble.

Harold W. Smith | Apr. 20, 2009
No surprise. I think this administration backed by the Council on Foreign Relations is out to bankrupt the U.S. and nationalize the petroleum industry right along with the banks, insurance, auto, and every other industry.

Art Vandeley | Apr. 20, 2009
.......and USA will continue to drink that middle east & chavez oil for many many years to come. again, is anyone really surprised that this administration loathes the US oil & gas industry?

Dick Volk | Apr. 20, 2009
I believe this is just the beginning. Govt is forcing someone, somebody, anyone, or anybody to come up with an alternate energy to replace oil at any cost to us.

Larry Meyer | Apr. 20, 2009
I believe it is time that the rule of common sense and good judgment should begin to apply when it comes to the requirements of the Citizens of America!! We donate $700B++ yearly to support unfriendly nations when we have proven reserves that would allow reductions to this expense and assist in providing independence from Foreign Oil. The groups that are protesting are doing the U.S. a disservice and need to step-back and reconsider their demands.


GN Jenkins | Apr. 20, 2009
Stupidest thing I've ever heard of! How do we get the extreme tree huggers out of our hair and billfold? Conservation is great. Have been doing that all my life. BUT!---(example) Trading our country's needs to save a snail darters nest is STUPID!!! And the extreme stupidity seems to be growing. Let's bring our dollars home from the middle east by finding our own energy!

Harlan Richard | Apr. 20, 2009
This is what the government wants, to run the show and keep the oil prices escalating. Plus to be dependent on foreign oil.

homesickdude | Apr. 20, 2009
There goes more of the Tax Payers Money to foreign governments that already hold us hostage. You are right, they will lay the blame at the people's feet and tell us they know better for us.

John Brown | Apr. 20, 2009
These radical liberal so called Federal Court "justices" and the tree huggers that brought the case in the beginning should be labeled as threats to the country's welfare and identified in the same way sex offenders are. Not only is "justice" blind, it is deaf and stupid.

Mr. H. | Apr. 20, 2009
These court challenges will continue ad nauseum. The Enviro-Cartels have very deep pockets.

Of course we'll get blamed. What else is new? Our industry should put more resources into education and public relations. Several states have check-off style programs for this and have been quite successful in their efforts.

Michael Ledoux | Apr. 19, 2009
I am just a regular guy who has worked as a directional driller his whole life, seen 3 slumps, but I think this one is the big 1. We are in trouble.

Josh Carroll | Apr. 17, 2009
Brilliant move by our Federal Govt. They will have no one to blame for higher prices but themselves.....No, wait, they will blame us instead.

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