Lawsuit settlement stalls Gulf lease sales

The State of Louisiana settled a lawsuit it filed this summer against the federal government seeking to block the sale of future oil and gas drilling leases in the Gulf of Mexico.

The suit, brought by Gov. Kathleen Blanco in the wake of significant wetlands loss caused by Hurricanes Katria and Rita, argued that the federal government and oil companies did not take environmental considerations, such as wetland erosion and deterioration, into account before permitting for drilling was allowed.

The settlement between the state and the Department of the Interior, specifically the Minerals Management Service, calls for the federal government to perform environmental impact studies prior to drilling or the issuance of leases to determine how much damage the activity causes to the state’s shoreline and surrounding wetlands.

“For the first time in history, the federal government has agreed to delay future offshore oil lease sales until a complete environmental assessment is done,” Blanco said. “One that takes into account the affects of the two storms as well as the cumulative impact of oil leasing activity on Louisiana’s coastal zone.”

The governor said no drilling plan will be allowed to be filed on Western Gulf Sale Lease 200 “until each plan reflects an appropriate environmental analysis that is approved by the state.” The Western Gulf Sale Lease was held in August and included several promising tracts.

Blanco noted that the results of the lawsuit should further the state’s cause currently being pushed in Washington, D.C., that would give the state a share of oil and gas royalties from wells drilled off the Louisiana coast. Legislation has been bogged down in a conference committee with no guarantees the measure will complete the legislative process before Congress adjourns in late November.

The Senate version of the legislation calls for the state to receive $200 million over the first decade and upwards of $700 annually thereafter. However, the House version, which is sponsored by Congressman Bobby Jindal (R- Metairie), would bring almost $9 billion to the state in the first decade and then nearly $2 billion a year after that date. The White House has spoken in favor of the Senate version of the legislation. Any monies derived from this legislation would presumably be used to restore coastal wetlands and to fortify existing hurricane barriers in southern parishes such as levees, locks and floodwalls.