Louisiana Gov. Kathleen Babineaux Blanco said attorneys for the state have negotiated a settlement in a lawsuit against the US Minerals Management Service, and the settlement would delay Lease Sale 201.
The lawsuit claimed MMS did not consider the environmental impact of offshore drilling when granting leases (OGJ, Aug. 28, 2006, p. 23). Blanco announced details of the proposed settlement during an Oct. 24 news conference in Baton Rouge.
A US District Court in New Orleans has yet to finalize terms of the settlement, under which Lease Sale 201-originally scheduled for Mar. 17, 2007-would be delayed for an indefinite period, said an attorney for Blanco.
He said tracts that would have been included in that lease offering might be rolled into another MMS sale, possibly Sale 205 in September 2007.
Settlement terms also call for no Outer Continental Shelf oil and gas leasing off Louisiana pending an environmental impact statement regarding damages to Louisiana’s coast from the 2005 hurricane season.
Any exploration plans submitted by oil and gas companies regarding Western Gulf Lease Sale 200 must be accompanied by an environmental assessment that will be subject to review by Louisiana, state officials said. No such environmental assessment document previously was required.
Steve Allred, Department of Interior’s assistant secretary for lands and minerals management, said, “Resolving this dispute by agreement rather than litigation benefits our nation’s energy security by assuring we can move ahead on the leases issued in Lease Sale 200. The agreement also sets the next 5-year lease program on the right track.”
Blanco reacts
Blanco called the agreement “an historic victory for Louisiana and for all states whose voices deserve to be heard in matters of their own destiny.”
She said, “This fight is not with the oil and gas industry; it is with the federal government.”
A Nov. 13 trial was scheduled in New Orleans, but the MMS said the state of Louisiana plans to dismiss the lawsuit upon court approval of the settlement.
The US Geological Survey reported Louisiana lost 217 sq miles of coastal area and barrier islands during Hurricanes Katrina and Rita.
US Dist. Judge Kurt Englehardt refused to block opening of offshore bids on Aug. 16 for Lease Sale 200 on 2.9 million acres of offshore tracts, but he said that the state had “a likelihood or substantial likelihood of prevailing.” He ordered attorneys for MMS and Blanco to enter into negotiations.
Blanco has pushed for what she calls “Louisiana’s fair share of revenues from offshore oil and gas drilling.”
She wants to secure a share of federal offshore oil revenues to mitigate the state’s loss of coastline (OGJ, Apr. 17, 2006, p. 26). Blanco said that restoring Louisiana’s coastline is essential for hunting, fishing, and protecting oil and gas infrastructure.
Offshore revenues
Meanwhile, the Louisiana congressional delegation is working for a compromise energy bill that allocates a portion of royalties from offshore drilling to the state’s Coastal Protection Fund.
The US House and Senate have conflicting revenue-sharing bills. Blanco called for Congress to reconcile the two.
“It’s time for Congress to pass a revenue-sharing bill that will allow us to get on with the business of restoring our coast and protecting the communities that support this country’s offshore energy supply,” she said.
