“At some point this must end. With a permit, or without.” With those words, an exasperated federal judge punctuated his latest decision ordering the Obama administration to process applications to drill for oil and gas offshore. More than a year after the BP Deepwater Horizon oil spill caused the administration temporarily to halt the federal permitting process, Judge Martin Feldman of the Eastern District of Louisiana was prepared to accept no further bureaucratic delay by the federal regulators who continue to bottle up almost all drilling applications.
The court’s May 10 order would have been remarkable if only for its emphatic rhetoric. But even more noteworthy was the fact that the Obama administration—i.e., the Interior Department, with jurisdiction over offshore drilling—claimed to have ended its moratorium seven months earlier.
Yet an unofficial moratorium is seemingly still in place. And Judge Feldman is joined in his frustration by restive congressmen of both parties, especially from the delegations of coastal oil- and gas-producing states. To force an end to the gridlock, the House has begun passing bills imposing deadlines on federal regulators’ review of drilling applications.
Congress’s frustration is understandable, but its strategy is underwhelming. New statutory deadlines, by themselves, will not end the drilling moratorium. Drilling proponents who pin their hopes on procedural “fixes” are setting themselves up for disappointment.
That Congress feels compelled to order the Interior Department to -hasten the review of drilling applications shows how dramatically the Obama administration reacted to last summer’s Gulf of Mexico oil spill. Just 16 months ago, President Obama—surrounded by Interior Secretary Ken Salazar, Energy Secretary Steven Chu, climate “czar” Carol Browner, and other officials—announced an energy strategy that would include expanded drilling in the Atlantic and Gulf waters. That policy, he insisted, would be “guided not by political ideology, but by scientific evidence.”
The administration’s new strategy was shortly thereafter engulfed in a deluge of oil—BP’s Deepwater Horizon well erupted just three weeks later. Desperate to forestall more disasters, Salazar imposed a six-month moratorium on drilling in water deeper than 500 feet, including 33 wells then under construction. President Obama reiterated this ban in an Oval Office address two weeks later, urging that “we need to know the facts before we allow deepwater drilling to continue.”
But the administration’s commitment to a science-not-politics-based policy quickly proved to be empty rhetoric. Would-be drillers challenged the moratorium in federal court, and Judge Feldman issued his first of several decisions, concluding that the moratorium was far more expansive than the factual record warranted. Undeterred by the judge’s order, the administration “rescinded” that moratorium and imposed a virtually identical new one. Further litigation ensued.
When Salazar ultimately announced the end to that moratorium in October 2010, after months of litigation, pro-drilling advocates reacted with a distinct sense of skepticism. The American Petroleum Institute’s president warned that “without additional resources and a serious commitment by the government to process and approve permits . . . a de facto moratorium . . . will continue to cripple the already hard-hit Gulf region.”
And by all appearances, that warning has proved correct. According to the House Oversight Committee’s recent report, the administration’s official moratorium “was replaced by a ‘permitorium’—whereby drilling activity remained at a standstill not by operation of law—but because of inaction on the part of [Interior].” As proof of the “permitorium,” the House report noted that before the Deepwater Horizon spill, Interior had “processed and issued permits to drill in two weeks”; since the moratorium ended last year, only one new well had been approved. In the words of Judge Feldman, “Where there should be a queue” of applications receiving orderly review, “there is instead an untended pile.”
With the administration unwilling to accelerate the regulatory process, and the federal courts seemingly unable to effect change, Congress increasingly has sought to force the administration’s hand itself. Its most recent strategy is to impose new deadlines on federal regulators reviewing drilling permit applications.
For example, the “Putting the Gulf of Mexico Back to Work Act,” which passed in the House by a 263-163 vote, would require Interior to “decide whether to issue a permit” within 60 days of receiving the application; if no decision is made within 60 days, then “the application is deemed approved.” Another bill, Senator David Vitter and Representative Rob Bishop’s “3-D Act” (as in “Domestic Jobs, Domestic Energy, and Deficit Reduction”) would require Interior to “approve or disapprove an application for a permit to drill . . . not later than 20 days after the date the application is submitted to the Secretary.” If the sponsors believe that setting deadlines will result in Interior issuing more drilling permits, then they likely will be disappointed.
To understand why new statutory deadlines cannot achieve the change their sponsors seek, consider the statutes underlying the offshore drilling scheme. More to the point, consider how those laws assign the “burden of proof.”
The Outer Continental Shelf Lands Act (OCSLA), which governs offshore drilling permits, places the burden of proof on the applicant. Specifically, OCSLA requires Interior to reject a drilling permit application “if the [applicant] fails to demonstrate that he can comply with the requirements of this act or other applicable Federal law.”
In other words, if Interior concludes that the applicant has not yet carried its burden of proving that it is entitled to a drilling permit when the new statutory deadline expires, then Interior will reject the application.
The newly proposed deadlines do not shift the burden of proof from the applicant to the government. And so even if Interior were required to make a final decision within 20 or 60 days of receiving the application, the ultimate outcome would not likely change. Most obviously, permit applications that fall far short of convincing Interior would not benefit from a deadline. At the end of the statutory period, Interior will reject those applications.
But even applications seemingly more deserving of approval will probably not benefit from the deadline. Even with a deadline on the books, Interior likely could claim discretion to belatedly approve applications; federal courts have recognized that a statutory deadline for agency action may not, by itself, prevent the agency from issuing a final decision even after the deadline has expired.
Armed with that discretion to hold out hope for belated approval, Interior would easily be able to convince applicants to waive the deadline. Better for an applicant to await a belated approval than to force a timely rejection.
But if deadlines alone will not suffice to force prompt Interior review of drilling applications, then what would? A seemingly obvious remedy would be to combine a deadline with a reversal of the burden of proof: require Interior to grant permits before the deadline, unless Interior proves that the applicant should not be allowed to drill.
Such a combined proposal would foster more drilling—but at what cost? It is not clear how, under this system, Interior could obtain from the applicant all of the information that it needed, and analyze that information, before the deadline expired. Given how complicated any drilling project is, and the risks that often remain hidden from even the most inquisitive regulators and operators (as seen in the Deepwater Horizon incident), Interior might not even know which questions to ask to cover all possible project-specific contingencies. And that is precisely why laws traditionally assign the burden of proof to the party that has the best access to the information at the center of the dispute, or to the party that seeks to change the status quo. In other words, the would-be drillers, not the regulators. If Congress’s goal is to force Interior to approve good projects, then the burden of proof should remain with the applicant.
Another option would be for Congress to take the permitting statutes, which are phrased in very broad terms, and to narrow the scope of the agency’s discretion by specifying in great detail precisely what a “good” project must demonstrate in order to receive a permit.
This proposal, too, has clear virtues. Too often, the agency malfeasance that Congress denounces is simply the product of poorly drafted statutes—a prime example being overbroad grants of power to agencies that allow Congress to take credit for “tackling” a policy problem, while leaving the agencies responsible for translating the broad mandate into actual policy. Under this theory, Congress has only itself to blame for the inevitable problems that result from giving agencies far too much discretion over a given issue. If Congress doesn’t like how agencies administer statutes, then it should amend the statute, and specify precisely what factors it wants the regulators to examine.
But federal statutes providing for approval or disapproval of energy infrastructure development, as it happens, have always been broadly worded precisely to give the relevant agency maximum discretion to identify, evaluate, and resolve the complicated technical problems that surround complex infrastructure. Narrowly specifying the considerations that Interior can consider in reviewing drilling permit applications would depart from the history of energy infrastructure regulation, and would risk preventing the agency from exploring issues crucial to public safety yet beyond the statutory mandate.
These concerns illustrate the fundamental problem with Congress’s new deadline-centered approach: On questions of law and regulation, there often are issues that legal draftsmanship cannot solve. Stated differently, sometimes the problem isn’t the prescription; it’s the personnel. The statutes governing offshore drilling almost certainly give regulators the tools they need to promptly and effectively approve good drilling proposals and disapprove bad ones. If the Obama administration personnel are not faithfully administering those laws, then Congress’s recourse is political, not legal.
And the political tools at Congress’s disposal are myriad. It can convene hearings designed to browbeat regulators; it can hold up executive or judicial branch nominations; it can use the power of the purse to defund other administration priorities; it can appeal directly to the voters, stating the pro-drilling case and driving the public to pressure the administration.
Congress is doing many of these things already; the House Oversight Committee has held hearings and issued a report condemning the Obama administration; Louisiana’s senators, Vitter and Mary Landrieu, have held up administration appointments as payback for drilling permit delays. In the end, Congress will find much more success in a vigorous strategy focused on such political leverage than it will in even the most elegantly drafted legislation.
Adam J. White is a lawyer in Washington.
