Obama Administration Will Appeal Judge’s Order On Drilling Permits

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March 10, 2011

WASHINGTON (Dow Jones)–The Obama administration will appeal a ruling from a federal judge who has ordered it to act on pending permits for oil drilling in the Gulf of Mexico, a cabinet official said Wednesday.

The administration has said it will comply with the judge’s order to act on five pending applications by the end of next week. But it will dispute the court’s authority to make such decisions in the future, Interior Secretary Ken Salazar said Wednesday.

“We will be taking an appeal of the judge’s decision,” Salazar said at a hearing of the Senate Appropriations Subcommittee on Interior, Environment, and Related Agencies. The appeal will target “what I consider to be an overreach into administrative authority,” Salazar said.

A federal judge made the order on Feb. 17, ruling in favor of London-based Ensco PLC (ESV), which had sued the Interior Department. Ensco’s lawsuit centers on five permit applications in which the company holds a stake and which have been pending for as long as nine months. Ruling for Ensco, Judge Martin Feldman of U.S. District Court in the Eastern District of Louisiana said Mr. Salazar’s agency is required to act in an “expeditious manner.”

“We have in hand a number of other permits that we expect to issue very soon in the deep water,” Salazar added. “These first permits hopefully will become a template allowing other deep-water permits to be issued.”

Lawmakers again pressed Salazar to move quickly on the permits Wednesday. Sen. Mary Landrieu (D., La.) said Salazar still needed to “press forward on the accelerator” even though one deep-water permit was issued last week, the first since the oil spill that began in April 2010. Landrieu said she supported Salazar’s request for increased funding for federal regulation of offshore drilling.

“I am interested in providing additional resources to you,” Landrieu told Salazar Wednesday.

Salazar said oil production in the Gulf of Mexico would not drop significantly as a result of the administration’s delay in issuing permits, which it says was necessary to comply with new safety standards.

“You may see a blip,” Salazar said, referring to drops in future oil production in the Gulf. But he said any drop would be “modest.”

-By Ryan Tracy, Dow Jones Newswires

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