A new lawsuit filed by an independent American oil and gas company charges that the Obama administration is blocking legitimate efforts to find and produce oil from offshore wells.
“Given the challenges still facing the U.S. economy, the government needs to move aside and let private industry do what private industry does best: create jobs and increase our oil supply to help lower the price at the pump,” a report from the Heritage Foundation states.
“And yet the Obama administration remains committed to strangling America’s economic revival by doing everything in its power to prevent companies that obtain offshore leases from actually drilling and producing oil — a fact evidenced by a new lawsuit just filed in the U.S. Court of Federal Claims by an independent U.S. oil and gas company.”
By March 2010, ATP Oil & Gas Corporation received oil leases and necessary permits to drill in the Gulf of Mexico, and installed state-of-the-art drilling and processing equipment to safely access already-penetrated oil reservoirs, according to the report. The project was financed with $1.5 billion from J.P. Morgan.
Then in April 2010, the BP-operated Deepwater Horizon rig in the Gulf exploded while drilling a well into a previously unexplored reservoir. In response, the Obama administration ordered moratoria on deep-water drilling and barred consideration of new permits.
As a result, the ATP operation was shut down.
ATP has now struck back by filing a lawsuit alleging that the Interior Department “improperly and illegally suspended all deep-water offshore drilling activities and imposed two illegal moratoria on the deep-water drilling permit application process and then unreasonably and unlawfully delayed the issuance of drilling permits after the lifting of the formal moratoria.”
ATP is essentially asserting that the government breached its offshore leases with ATP by violating the Administrative Procedure Act in two ways, according to the Heritage Foundation report written by Hans von Spakovsky and Nicolas Loris: “By issuing overbroad moratoria, and by manipulating seven experts from the National Academy of Engineering (NAE) to bolster a recommendation for the moratoria.”
They also point out that all seven NAE experts denied supporting moratoria recommendations, and a previous court case concluded that a White House official had changed the report used to justify the moratoria.
The authors write: “ATP’s lawsuit provides a revealing glimpse into the capital-intensive oil and gas industry where unfair and illegal actions by a government agency can cost companies (and the U.S. economy) enormous sums of money.”
Opening the outer continental shelf to drilling, they add, “would generate hundreds of thousands of new jobs, generate hundreds of billions of dollars in government revenue, and bring more oil to the world market, thereby lowering gas prices.”