Interior Actions 'Unrestrained By The Facts' - Courts Side with ENSCO

Yesterday, US District Judge Martin Feldman in the case, Ensco Offshore Co. v. Salazar, ruled in favor of ENSCO. Specifically, the judge found that the Bureau of Ocean Energy Management (BOEM) implemented the safety measures mandated in NTL-05 "without observation of procedure required by law." ENSCO argued successfully that NTL-5 was a "substantive" rule and not an interpretive rule (as the U.S. government had contended). The Administrative Procedure Act (APA) requires government agencies to promulgate substantive rules only after giving the public notice and an opportunity to comment.

Simply put, Judge Feldman, found that NTL-05 imposes new certifications, safety inspections, and other additional duties on operators and lessees that by their very nature were substantive. Not an interpretive "guidance document" as the U.S. government contended. Furthermore, the BOEM did not provide the notice and comment period that were required by law. Because the government did not follow procedure the finding by the court is that "NTL-05 is of no lawful force or effect."

The government asked the courts to consider altogether dismissing ENSCO's lawsuit which challenges the government's decision to invoke a second moratorium. The DOJ believes this lawsuit is now inconsequential because the BOEM has already lifted the moratorium. A separate hearing is set for November 3, 2010 to settle this count. After which time, Judge Feldman will rule on this question.

RIGZONE Commentary

The battle to get drilling resumed at a pace similar to pre-Macondo Oil Spill levels continues. While offshore firms have thus far been victorious in their courtroom skirmishes, the U.S. government has taken a stubborn posture regarding offshore permit approvals.

At the very heart of the offshore industry's arguments is the reality that the Executive branch is willfully usurping the powers of the Judicial and Legislative branches. The second moratorium was a defiant thumbing of the Administration's nose directly at the Federal Court's ruling that the first moratorium was illegal. We do not miss the irony of this Administration actively imposing new laws on the American populace while ignoring laws already on the books aimed squarely at preventing what constitutes an abuse of authority.


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