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Blanco sues to halt sales of energy leases

Making good on her threat, Gov. Kathleen Blanco and the State of Louisiana on Thursday filed suit against the federal government to stop a sale of offshore oil and gas leases next month.

The suit, filed in U.S. District Court in New Orleans, requests no money from the federal government, but asks that the Minerals Management Service be ordered to conduct a further environmental analysis on the impact more oil and gas drilling will have on the coast of Louisiana.

However, if the suit spurs Congress to action on pending revenue sharing legislation, all the better, said Sidney Coffee, executive assistant to Blanco for Coastal Activities. "The governor is playing the piece of the puzzle that she can," Coffee said Thursday during a press conference announcing the filing.

Oil and gas royalties are looked upon by Louisiana's delegation as a logical means to rebuild Louisiana's coast, which in part was damaged by oil- and gas-related development.

Ryan Seidemann, an attorney with Attorney General Charles Foti's office, said the initial environmental impact statement for the lease sale was done in 2002 "and completely fails to take into account the impact of the storms."

He said the lawsuit alleges that increased offshore activity "will cause substantial degradation of the wetlands . . . through (increased) pipelines or vessel traffic."

Next week, state attorneys will ask for a preliminary injunction against the Aug. 16 sale.

On Monday, despite objections to the sale raised by the state, the Minerals Management Service announced it would go forward with the Western Gulf of Mexico lease sale.

Blanco filed suit in the names of the state and the citizens of Louisiana against the Minerals Management Services and its director, Johnnie Burton, and the Department of the Interior and its secretary, Dirk Kempthorne. The Minerals Management Service on Thursday said it does not comment on lawsuits, but said it has fully assessed the environmental, economic and coastal zone impacts of the upcoming lease sale.

"The MMS shares the state's concerns regarding the impacts of the 2005 hurricanes on infrastructure and socioeconomic and environmental resources, but we are confident that we have conducted sufficient analyses to make an informed decision on proceeding with Lease Sale 200," the agency said in a statement.

It's unclear what impact, if any, the lawsuit will have.

While Blanco has the right to object to the lease sale, she has no ability to stop it. Such suits have been filed and won in California, but Louisiana has historically been in favor of drilling off its coast, including previously approving a plan for off-coast oil and gas leasing through 2006.

Coffee said that the state believes the suit has merit.

"We feel very strongly that we do have a good case," she said.

The Aug. 16 sale includes 3,865 unleased blocks covering about 20.9 million acres offshore from Texas and in deeper waters off the coast of Louisiana. MMS said the sale could result in the eventual production of up to 262 million barrels of oil and 1.44 trillion cubic feet of natural gas.

The Minerals Management Service administers the offshore sales. The agency has said that Congress alone has the power to give the state more of the offshore royalties.

Blanco and the state's legislative delegation have been pushing for years for 50 percent of the federal royalties that oil and gas companies pay to lease land in federal waters. Blanco has stepped up her demand since Hurricanes Katrina and Rita, saying had the money been in place, the storms would not have caused so much damage to the state's coast.

The federal government collects about $7 billion a year from offshore royalties.

Different versions of royalty sharing are working their way through the U.S. House of Representatives and the Senate but face tough opposition. Under the Senate proposal, Louisiana would earn about $200 million a year, gradually increasing to $650 million annually by 2017. Under the House proposal, Louisiana could expect about $2 billion a year in new royalty sharing by 2017.

The bill in the House is by U.S. Rep. Bobby Jindal, R-Kenner, who on Thursday backed Blanco's action.

"We are closer than ever to finally getting these royalties," Jindal said in a statement. "We are pleased that Louisiana is united in the effort to get our fair share of our own oil and gas royalties."

Sens. Mary Landrieu and David Vitter echoed similar sentiments supporting Blanco's action on Thursday.

"Our state leaders are all communicating the same message to America: the status quo cannot be extended. Louisiana cannot continue to pick up the tab for the nation's energy needs while $8 billion flows through our coast to the federal treasury each year. Senator Vitter, our House delegation and I are using all our leverage in Congress to deliver this message, and Governor Blanco is using her leverage to reach the same goal," Landrieu said in a statement.

Vitter said he is focused on drafting legislation to secure more offshore money for Louisiana." I support all efforts to get our fair share of federal royalties from the oil and gas production off our coast," he said.

The America's WETLAND Foundation manages the largest, most comprehensive public education campaign in Louisiana's history, raising public awareness of the impact of Louisiana's wetland loss on the state, nation and world. The America's Energy Coast initiative works to sustain the environmental and economic assets of the Gulf Coast region. The initiative is supported by a growing coalition of world, national and state conservation and environmental organizations and has drawn private support from businesses that see wetlands protection as a key to economic growth. For more information, visit www.americaswetland.com or www.futureofthegulfcoast.org.

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