On October 12, 2010, the Secretary of the Interior lifted the moratorium on deepwater drilling in the Gulf of Mexico, after extensive consultations with the Bureau of Ocean Energy Management. When the Bureau approved Shell's exploration plan (EP), some environmental groups sued to halt the exploration. They sought to overturn the Bureau's "Finding of No Significant Impact," claiming that erroneous assumptions led the agency to understate the risk of an oil spill.
The court reviewed the issues whether Shell’s EP violated the environmental assessment provisions of the National Environmental Policy Act (NEPA) or the interagency consultation provisions of the Endangered Species Act (ESA). On June 22, 2012, the court denied the petition for review, refusing to overturn the Bureau's approval of Shell’s EP to conduct deepwater drilling in the Gulf of Mexico because the environmental group petitioners failed to overcome the extremely deferential “arbitrary and capricious” standard of review for the Bureau's actions.
On Nov. 23, 2011, the NAM joined with other business organizations in an amicus brief in support of the Bureau's decision. Reimposing a moratorium would do little to protect the environment and would stall America's economic recovery and compromise our energy security. The toll would be particularly high for communities in the Gulf States that have faced more than their fair share of disasters and are still recovering from losses caused by Hurricanes Katrina and Rita, the Macondo oil spill, the drilling moratorium and the current slowdown in regulatory approvals. Slow approvals also affect the overall U.S. economy, meaning fewer jobs, less oil and gas production, foregone tax revenue and royalties, and increased dependence on foreign oil.
Our argument focused on the Bureau's statutory obligation to balance economic and energy-policy interests with environmental effects. Jobs and energy security must be taken into account under the law, and exploration of the Outer Continental Shelf involves billions of dollars in investments and hundreds of thousands of jobs. This lawsuit threatened to require extensive Environmental Impact Statements (EIS) for every exploration plan. However, the court explained that it is within the Bureau's discretion to not require a separate EIS for every exploration and that it could rely on prior EISs to approve future EPs. In addition, the court held that when interagency consultation is reinitiated, the prior consultations remain valid until the new process is completed.
Ultimately, the court deferred to the Bureau's balancing of environmental concerns with the expeditious and orderly exploration of resources in the Gulf of Mexico and denied the environmental groups petition for review of the Bureau’s action.