Court Rejects Challenge to Shell's Central Gulf Exploration Permit

In an opinion issued June 22, 2012, the United States Court of Appeals for the Eleventh Circuit denied a petition filed by several environmental organizations challenging a Bureau of Ocean Energy Management (BOEM) decision to approve Shell's exploration plan (EP) for ten exploratory wells between 7,100 and 7,300 feet deep off the shore of Alabama in the central Gulf of Mexico.  Shell Gulf of Mexico, Inc., American Petroleum Institute, and the States of Louisiana, Alabama, and Mississippi intervened in the appeal.  The petitioners alleged that BOEM violated the National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA). Eleventh Circuit Opinion.pdf

The Court's Ruling

The court determined that BOEM met all of NEPA's requirements.  The court rejected petitioner's arguments that BOEM failed to include a site-specific analysis of potential catastrophic spills and underestimated the likelihood of a spill.  The court concluded that BOEM's environmental assessment “extensively analyzes the risks and consequences of such an event.

The court also rejected petitioner's ESA arguments, which focused on BOEM's reliance on biological opinions issued before the BP oil spill in 2007 by the National Marine Fisheries Service and the Fish and Wildlife Service.  Those opinions determined that Shell's EP “is not likely to jeopardize” any endangered or threatened species or destroy or adversely affect endangered species' habitat.  The petitioners argued that BOEM was required to delay approval of the Shell EP pending issuance of new or updated biological opinions accounting for the effects of the BP oil spill.  The court disagreed and found BOEM's position that the 2007 biological opinions remained in effect pending the issuance of new or updated opinions to be reasonable “under the facts of this case.” 

The court denied the petition ruling:

 “For the reasons stated above, we conclude that BOEM's decision to approve the Shell EP was not arbitrary or capricious and instead reflects the agency's balance of environmental concerns with the expeditious and orderly exploration of resources in the Gulf of Mexico.”

Louisiana Applauds the Decision

In a press release issued by the Louisiana Department of Natural Resources, Secretary Scott Angelle praised the court's decision.

“The regulatory burdens called for in that suit would have jeopardized everything this state has worked for, and that many working families in this state have prayed for, in restoring a pace of permitting and drilling in the Gulf of Mexico that continues to support new jobs and new economic growth,” Angelle said. “I am pleased to see that the Court’s decision was based in some of the same values we have promoted in our efforts to work with the industry and federal regulators to create a stable and efficient permitting process – the critical need to approach regulation in a manner that balances the need for energy, the need for economic development and the need to maintain safety and a clean environment.”

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