Judge Rules Against New Drilling Regs
In the aftermath of the BP spill, federal regulators promulgated sweeping new rules governing the drilling and operation of offshore wells. These new rules apply not only to the operators of deepwater wells, like BP’s Macondo, but to shallow water drilling as well. Largely as a result of these new rules, and uncertainty among regulators and the oil and gas operators as to their meaning and application, new drilling permits ground to a halt.
Offshore oil and gas activity is covered under a voluminous set of federal rules known as 30 CFR 250. Amending the Code of Federal Regulations is a process that requires some time and deliberation. Specifically, the process is designed to allow for public comment, and for the agency to take those comments into account in crafting a final rule.
But the Department of the Interior, through the old MMS and its successor agency BOEMRE, didn’t amend the CFR in imposing these new rules. Instead, they circulated the new rules, without benefit of public comment, as “Notices to Lessees”. Lessees are the oil and gas companies who operate on federal leases. By design, NTLs are supposed to be interpretive; their intent is not to create new laws or new regulations, but to provide guidance on existing ones.
Judge Martin Feldman in New Orleans District Court calls foul.
By the way, that’s the same Judge Feldman who threw out the first deepwater drilling moratorium.