On January 29, 2016, the Bureau of Ocean Energy Management (“BOEM”) and the Bureau of Safety and Environmental Enforcement (“BSEE”), agencies within the federal Department of the Interior (“DOI”), agreed to put a temporary moratorium on issuance of fracking permits in the Pacific Outer Continental Shelf until environmental review is conducted. The temporary moratorium is the result of a settlement agreement between the DOI and the Center for Biological Diversity (“CBD”). CBD sued the federal agencies in February 2015, alleging violations of the National Environmental Policy Act (“NEPA”), the Outer Continental Shelf Lands Act, and other federal statutes. The litigation culminated in this settlement agreement.
Under the settlement agreement, the DOI must complete a programmatic environmental assessment pursuant to NEPA by May 28, 2016, and there must be a 30-day public comment period on the environmental document. Until the completion of the environmental assessment, BOEM and BSEE must withhold approvals of “future Applications for Permits to drill.” This means that no new permits will be approved, but current permits are still valid.
While CBD is hailing this as a win for environmentalists, there has in fact been no fracking off the coast of California since 2013, and in this current price environment, we doubt there will be any new permit applications made during the environmental study period in any event. Until the environmental assessment is released, it is uncertain what impact the settlement agreement will have on future offshore operations or the permitting process in particular. Stay tuned for updates.