Sometimes, even with a scorecard, “you can’t tell the players.”

The saga of the Obama administration’s moratorium on Gulf of Mexico drillings operations took another strange turn yesterday.  The U.S. Court of Appeals for the Fifth Circuit entered a “LIMITED REMAND” to the U.S. District Court for the Eastern District of Louisiana for the purpose of holding a hearing, “calling witnesses if necessary” and issuing findings of fact and conclusions of law with respect to three specific questions.  Hornbeck Offshore Services LLC v. Salazar, No. 10-30585, slip op. at 2-3 (5th Cir. August 16, 2010)(capitalization in original).  

The court reasoned that it did not have before it a sufficient record on which to determine whether the second moratorium rendered moot the injunction the District Court had entered with respect to the first moratorium.  The three issues on which it ordered the District Court to rule are:

• Whether Secretary Salazar has the authority to terminate the original moratorium filed on May 28^th due to original decisions held by both the District Court and the U.S. Court of Appeals under the Outer Continental Shelf Lands Act and the Administrative Procedures Act;
• Whether the evidence provided for the July 12^th revision of the moratorium was available or unavailable for Secretary Salazar at the time he originally filed the May 28^th moratorium; and
• Describing the differences, if any, between the May 28^th and the July 12^th moratorium memoranda, what circumstances may have changed since the two were made, and if the issuance of the July 12^th moratorium rendered the May 28^th moratorium moot.

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On August 16, 2010, the White House Council on Environmental Quality (CEQ) released a report on the National Environmental Policy Act (NEPA) procedures for environmental reviews conducted by the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEM), the successor agency to the Minerals Management Service (MMS).  BOEM is the bureau in the Department of the Interior that regulates oil and gas exploration and production activities in the outer continental shelf (OCS).  Predictably, CEQ is recommending that BOEM undertake more extensive NEPA reviews before issuing permits.

As previously discussed on Akin Gump’s climate change blog, ClimateIntel.com, the Obama administration’s initiatives to “reinvigorate” NEPA have resulted in unnecessary and redundant obstacles to project development.  In analyzing CEQ’s “Draft NEPA Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions,” issued February 18, 2010, in which the Council expressed the view that NEPA requirements apply to GHGs and climate change impacts, ClimateIntel recommended that CEQ promulgate categorical exclusions and seek necessary amendments to the statute to minimize redundancies in the modern environmental regulatory system.

In the August 16 report , CEQ does precisely the opposite.  Under the guise of “promot[ing] more robust and transparent implementation of NEPA practices, procedures and policies,” the administration announced a ban on the use of “categorical exemptions” for deepwater drilling activities.  The administration also announced that shallow water drilling activities would be subject to enhanced environmental review.  While the current moratorium on deepwater drilling renders these actions “academic,” as the moratorium is lifted, the oil and gas industry will face increased costs and further delays in obtaining regulatory approvals.

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On April 28, 2010, Secretary of the Interior Ken Salazar approved “Cape Wind,” a $1 billion, 130-turbine wind farm south of Cape Cod.  The announcement came nine years after the developer filed an initial permit application, and Secretary Salazar promised that in the future the “layers of review upon layers of review” responsible for the delay would be streamlined into a more “rational and orderly process.” It also came eight days after the Deepwater Horizon drilling rig accident in the Gulf of Mexico, and as the scale of that spill became apparent, clean energy advocates greeted this first federal approval of offshore wind as a positive, but belated, first step.

Opponents, however, simply vowed to keep fighting. On June 25, 2010 a coalition of six environmental groups and three individuals filed suit alleging that the Secretary’s approval violated the Endangered Species Act, Migratory Bird Treaty Act, National Environmental Policy Act, and Administrative Procedure Act, through various inadequacies in its consideration of project impacts on the roseate tern, piping plover and right whale. Officials have dismissed the suit as groundless, and the project’s developers have attacked the plaintiffs and their motives. Rancor and rhetoric have been abundant enough throughout the saga that Cape Wind has yielded both an acclaimed book and a soon-to-be-released feature film.

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Several amici filed briefs last week in support of the industry appellees in the Kivalina Village greenhouse gas case.  The District Court granted the defendants’ motions to dismiss on standing and justiciability grounds and plaintiffs appealed to the Ninth Circuit.The parties filing amicus briefs included:

• The American Chemistry Council,
• The Association of International Automobile Manufacturers,
• The United States Chamber of Commerce,
• Congressman Lamar Smith and Congressman F. James Sensenbrenner, Jr.,
• Center for Constitutional Jurisprudence,
• National Association Of Manufacturers, National Federation of Independent Business Small Business Legal Center, and American Tort Reform Association,
• NATSO, Inc,
• Pacific Legal Foundation, and
• Washington Legal Foundation.

The Court of Appeals has not yet set the date for oral argument.

For further information about this topic, please contact Akin Gump.

 On July 8, the U. S. Court of Appeals for the Fifth Circuit denied the Obama Administration’s request to stay a lower court’s order lifting a six-month moratorium on offshore drilling. The Department of the Interior issued the moratorium following the explosion of a BP platform in the Gulf of Mexico. The moratorium impacted 33 exploratory drilling projects, but did not interrupt production at established platforms. Hornbeck Offshore Services and other companies that supply vessels and support to offshore drilling rigs quickly challenged the moratorium. These companies argued that the ban unnecessarily compromised much-needed jobs in the Gulf. On June 22, 2010, the U.S. District Court for the Eastern District of Louisiana granted Hornbeck’s motion for preliminary injunction, finding the Interior’s moratorium arbitrary and capricious under the Administrative Procedure Act. The Obama administration immediately appealed to the Fifth Circuit.

The Fifth Circuit’s ruling denied the government’s request to reinstate the moratorium while the Interior’s appeal is pending. According to the court’s brief per curium opinion, Hornbeck Offshore Services, L.L.C. v. Salazar, No. 10-30585, “[t]he motion for stay pending appeal is denied because the Secretary has failed to demonstrate a likelihood of irreparable injury …; he has made no showing that there is any likelihood that drilling activities will be resumed pending appeal.” Judge Dennis dissented in part, indicating that he would have granted the Secretary’s motion to stay. All three judges agreed that the Secretary could apply for emergency relief “if he can show that drilling activity by deepwater rigs has commenced or is about to commence.”

The court set an expedited brief schedule for the Interior’s appeal of the district court’s preliminary injunction. The merits argument will take place the week of August 30.

Some sources have suggested that the Fifth Circuit’s decision will lead the Interior to issue a revised moratorium that addresses the district court’s concerns. The New York Times reported that the Interior is releasing a new moratorium as early as this week.

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On June 30, three groups of industry appellees - oil company appellees; utility appellees and Peabody Coal - filed their briefs with the U.S. Court of Appeals for the 9^th Circuit. 

The briefs urge affirmance of the district court’s dismissal of the complaint seeking damages for the alleged harms caused by greenhouse gas emissions under theories of common law public nuisance.

The Court of Appeals has not yet set the date for oral argument.

For further information about this topic, please contact Akin Gump.

The U.S. District Court for the Eastern District of Louisiana yesterday issued a preliminary injunction lifting the Department of Interior’s six-month moratorium on deepwater oil drilling. Hornbeck Offshore Services v. Salazar, E.D. La., No. 2:10-cv-01663, preliminary injunction 6/22/10.  

Following the explosion of the Deepwater Horizon drilling platform on April 20, the U.S. Department of Interior issued the moratorium after completing a report reviewing the safety of deepwater drilling. The Secretary of Interior made a finding that, under current conditions, deepwater drilling poses an unacceptable threat of serious and irreparable harm or damage to wildlife and the marine, coastal and human environment, as set forth in 30 C.F.R. 250.172(b). The Secretary further determined that the installation of additional safety or environmental protection equipment is necessary to prevent injury or loss of life and damage to property and the environment, as set forth in 30 C.F.R. 250.172(c).  The moratorium prohibits drilling at depths greater than 500 feet for the 33 permitted wells located in the Gulf.

Led by Hornbeck Offshore Services, a company that operates vessels and supplies support services needed for deepwater drilling in the Gulf filed suit, alleging that Interior’s action in ordering the moratorium was arbitrary, capricious, an abuse of discretion and otherwise not in accordance with the Administrative Procedure Act (APA), the Outer Continental Shelf Lands Act (OCSLA) and its implementing regulations. Hornbeck sought an injunction precluding the government from enforcing the drilling ban.

The court entered the requested injunction, finding numerous flaws in the study that Interior used as the grounds for the moratorium. The court noted that:

• Interior’s report failed to justify the moratorium in terms of the irreparable harm it would avert or the time it would take to put in place adequate safety measures; and
• there were also unexplained discrepancies between the report’s recommendations and the moratorium, such as the report recommended halting drilling beyond 1,000 feet, not 500 feet as the moratorium required

Finally, the court found that “the blanket moratorium…seems to assume that because one rig failed although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.” This “patent lack of analysis,” in the court’s view, rendered Hornbeck likely to succeed on the merits of its claim.

The court then turned to the harm suffered by Hornbeck. The court noted that 150,000 jobs are directly connected to the drilling industry, adding, “[o]il and gas production is quite simply elemental to Gulf communities.” This public interest, the court concluded, when weighed alongside Hornbeck’s likelihood of succeeding on the merits, supported granting the motion for a preliminary injunction.

Press Secretary Robert Gibbs says the government plans to immediately appeal the decision to the 5^th Circuit. The likelihood of success of this appeal is uncertain. Under the Administrative Procedure Act, courts are required to give Interior’s decision to issue the moratorium a great deal of deference, overturning it only when it finds the agency acted arbitrarily and capriciously. The discrepancies between the report and the moratorium, the scope of the moratorium, its lack of timelines and the immensity of the economic harm to the industry may be enough to satisfy Hornbeck’s heavy burden of proof. Still, the enormity of the environmental damage and the unprecedented nature of this national emergency weigh heavily in the government’s favor.

Industry has applauded the injunction as ensuring a more thoughtful decision-making process. The Sierra Club called lifting the moratorium “one of the worst ideas ever proposed.”  Secretary Salazar announced his intention to issue a new directive, after providing additional factual support for the moratorium.  If that ploy is not effective, the district court’s decision means that until a trial is held or the court of appeals acts to overturn or stay the district court’s ruling, Gulf oil drillers could be going back to work

For further information about this topic, please contact Akin Gump.

Yesterday GreenLaw and the Southern Environmental Law Center filed five petitions for hearings with the Georgia Office of State Administrative Hearings concerning the state-approved air and water permits issued to two Georgia coal-fired plants-LS Power Group’s proposed Longleaf Energy Station and Plant Washington.  The petitions assert that the permit terms and conditions are not adequate to protect the surrounding community and environment.

GreenLaw challenges the air quality permit and the construction deadline for the Longleaf Energy Station.  GreenLaw opposes the characterization of the 1200-megawatt Longleaf as “a minor source” of pollution, claiming the plant will not be held to sufficiently stringent air pollution standards.  They also oppose a construction extension for the plant, which they argue could enable LS Power Group to build with outdated technologies.

Three petitions, filed by GreenLaw and the Southern Environmental Law Center, for the Washington Plant alleged three basic deficiencies in the permits.  First, they challenge the air permit, asserting that it inadequately controls sulfuric acid mist and particulate matter.  Second, the petitioners argue that the water permits authorize unlawful amounts of water usage from the Ogeechee River watershed.  Third, they claim that the permit insufficiently controls the temperature of wastewater discharge that would flow into the Oconee River.

LS Power Group, supported by a group of six electric membership cooperatives, labeled Power4Georgians, believes that Georgia correctly issued the permits and that petitioners challenges will be rejected.

ClimateIntel has previously written about the Longleaf Power Plant.  To view these posts, please visit the below links.

“Implications of Regulating CO2 as an NSR Pollutant”

“Georgia Appeals Court to Review Rejection of Coal-Fired Power Plant Permit”

“Georgia Court Revokes Air Pollution Permits for Coal-Fired Power Plant”

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In the late ‘60’s and early 70’s, as Congress enacted NEPA and established the Environmental Protection Agency and environmental issues became subject to greater public attention, plaintiffs sought to use common law nuisance claims to augment the relatively meager federal statutory schemes.  In recent years, states, local government units, nongovernmental organizations and private individuals have revived the public nuisance doctrine.  Plaintiffs have commenced civil actions in federal district courts against corporations characterized as “large” emitters of greenhouse gases under theories that the emissions of GHGs constitute a public nuisance for which the defendants can be assessed damages or enjoined from continuing to emit.To date, the courts have disposed of these cases on jurisdictional issues related to the plaintiffs’ “standing to sue” and whether the claims asserted may not be heard by reason of the political question doctrine. Should plaintiffs in any of the cases survive the jurisdictional challenges, attention will turn to the elements of proof for federal common law claims of public nuisance.

A critical line of cases on which plaintiffs have been relying arose under the Clean Water Act in which the states of Illinois and Michigan sued Milwaukee, three other cities in Wisconsin, and local sewer and water agencies for discharging untreated sewage into Lake Michigan.  The states contended that such actions constituted a public nuisance and sought an order requiring that the discharges be abated. 

Illinois originally sought to invoke the Court’s original jurisdiction.  The Court denied that motion, ruling that Illinois could sue the Wisconsin public entities in federal district court.  (Illinois v. City of Milwaukee, 406 U.S. 91, 101 (1972)).  The Court went on to review the Water Pollution Control Act, determined that the remedies therein did not cover the relief sought by Illinois, and ruled that “application of federal common law to abate a public nuisance in interstate or navigable waters is not inconsistent with [the statute].”  (Id. at 104).  The Court also noted that “[i]t may happen that new federal laws and new federal regulations may in time preempt the field of federal common law of nuisance.”  (Id. at 107). 

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 As discussed in the previous post in this series, when first enacted, NEPA played a significant role in requiring the consideration of environmental impacts in connection with covered projects because the substantive environmental laws then in effect did not provided comprehensive, or in many cases, effective regulation.  Over forty years later, while federal and state statutes and regulations have expanded across the spectrum of environmental media and issues, NEPA’s mandates remain essentially unchanged.  In recent weeks, the White House’s Council on Environmental Quality, seemingly oblivious to this history, issued three draft guidance documents intended to “reinvigorate” the statute.One of the three documents, “Draft NEPA Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions,” issued February 18, 2010, affirmed CEQ’s view that NEPA requirements apply to GHGs and climate change impacts.  The draft guidance advised federal agencies that they should consider opportunities to reduce GHG emissions caused by proposed federal actions.  Moreover, federal agencies would be required to adapt their actions to climate change impacts throughout the NEPA process and to address these issues in their agency NEPA procedures.

The draft guidance on GHG emissions provides examples of proposals for federal agency action that “may warrant a discussion of the GHG impacts of various alternatives, as well as possible measures to mitigate climate change impacts.”  Specific examples provided by CEQ include: “approval of a large solid waste landfill; approval of energy facilities such as a coal-fired power plant; or authorization of a methane venting coal mine.” 

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