The offshore jurisdiction of states in the southeastern U.S. could triple in the relatively near future. Two Louisiana Congressmen, U.S. Sen. David Vitter and U.S. Rep. Bill Cassidy, recently introduced companion bills styled as the Offshore Fairness Act (OFA), which would extend the offshore jurisdictions of Louisiana, Mississippi, Alabama, Florida (partially), Georgia, South Carolina, North Carolina and Virginia to three marine leagues (nine nautical miles) from their respective coastlines. That amounts to an expansion of approximately six nautical miles from their current jurisdictional limits of approximately one marine league or three nautical miles.

At present, two states in the Union – Texas and Florida (in part) – already have offshore jurisdictions extending 3 marine leagues from their coastlines. The Supreme Court of the United States has held that, upon Texas’s admission into the Union in 1845, Congress affirmed Texas’s boundary of three marine leagues, as established by Texas’s First Congress in 1836, through the Annexation Resolution of 1845. U.S. v. States of La., Tex., Miss., Ala. & Fla., 363 U.S. 1, 80 S. Ct. 961, 4 L. Ed. 2d 1025 (1960), supplemented sub nom., U.S. v. Louisiana, 382 U.S. 288, 86 S. Ct. 419, 15 L. Ed. 2d 331 (1965). The Supreme Court similarly has held that Congress’s approval of Florida’s Constitution in 1868, which was done as part of the implementation of the Reconstruction Act of 1867, affirmed the three league boundary along Florida’s Gulf Coast as set forth in that Constitution. Id. However, Florida’s boundary on its Atlantic/eastern boundary was not defined as extending three marine leagues from its coastline in its Constitution, so its offshore jurisdiction extends only three nautical miles off of that coast.

The major hurdle the OFA will face certainly will be its impact on rights to the massive amount of revenue, actual and potential, generated from resources derived from the submerged lands between the existing and potential boundaries. In its current form, the OFA expressly excludes the Outer Continental Shelf Lands Act (43 U.S.C. § 1443, et seq.) and the Gulf of Mexico Energy Security Act of 2006 (43 U.S.C. § 1331 note; Public Law 109-432) from its reach, and it would not impact federal oil and gas leases in affected areas on the date of the transfer of jurisdiction from the federal government to the states. However, the proposed bill expressly provides that it “shall not apply to any interest in the expanded submerged land that is granted by the State after the date on which the land is conveyed to the State” by the federal government. It also provides that the states in question may exercise all sovereign powers of taxation over interests in the expanded submerged lands acquired or created after the date the lands are transferred to the states.  Whether the states or the federal government should receive the tax revenues generated by such future interests certainly will be a point of contention.

In its present form, the OFA also would grant the subject states exclusive management over the red snapper fish, the lutjuanus campechanus, within 200 miles from their coastlines consistent with the U.S.’s exclusive economic zone. At present, the National Oceanic and Atmospheric Administration (NOAA) is responsible for conducting scientifically based fishery stock assessments for the red snapper fish. However, NOAA’s assessments have recently come under increased criticism from states and special interest groups.  If passed, the states would remain in charge of red snapper management until each state’s governor certifies to the Secretary of Commerce, in writing, that NOAA’s stock assessments are accurate and based on sound science.

UPDATE: New Orleans CityBusiness has reported that on Monday, April 22, Texas and Louisiana sued to block federal fishery officials from regulating the length of the red snapper recreational fishing season in federal waters off their coasts.

Other resources:
http://www.boem.gov/Oil-and-Gas-Energy-Program/Leasing/Outer-Continental-Shelf/Index.aspx
http://www.gpo.gov/fdsys/pkg/BILLS-113hr1430ih/pdf/BILLS-113hr1430ih.pdf (House bill)
http://www.gpo.gov/fdsys/pkg/BILLS-113s681is/pdf/BILLS-113s681is.pdf (Senate bill)

Bureau of Ocean Energy ManagementThe Center for Sustainable Economy, a non-profit public interest consulting firm, filed a lawsuit today against the Bureau of Ocean Energy Management (BOEM) in an attempt to halt that agency’s first approved five-year Outer Continental Shelf (OCS) Oil and Gas Leasing Program since the BP oil spill. The Program, which establishes a schedule for 2012-2017 to be used as a basis for considering where and when oil and gas leasing might be appropriate in both the Gulf of Mexico and Alaska, received final approval from U.S. Department of the Interior on August 27, 2012.

The Center for Sustainable Economy contends that the BOEM’s implementation of the Program was a hasty, uniformed, and illegal course of action. In a press release, the Center stated that “[i]ncomplete and flawed economic analysis led BOEM to rush ahead with new offshore leases that may not be economically justified in violation of the National Environmental Policy Act, Outer Continental Shelf Lands Act, and Administrative Procedure Act.”

Industry leaders and GOP members on Capitol Hill certainly are opposed to the lawsuit. E2-Wire, an energy and environmental blog based in Washington D.C., reports that “a number of industry groups—including the American Petroleum Institute and the International Association of Drilling Contractors—have also petitioned the appeals court to intervene in the case on Interior’s side, noting their interests are at stake in the case.” While they believe the Program is too modest and should have made more Outer Continental Shelf areas available for drilling and energy exploration, they recognize that the Center’s success in the litigation would be another setback for an industry still coping with the aftermath of the BP oil spill.

The lawsuit was filed in the United States Court of Appeals for the District of Columbia.

Photo via ABC News

When the Costa Concordia ran aground on a reef off Giglio Island near the Tuscan coast of Italy last month, owners and insurers of vessels certainly paid attention.  How could they not?  The incident was the most noteworthy shipping casualty since the Exxon Valdez disaster, and it is now being called the biggest ever shipping loss for insurers.

While the investigation into the causes of the incident is ongoing, early indications are that it could have been avoided.  And even if it was unavoidable, the management of the ensuing emergency by the captain and the crew of the Costa Concordia apparently left a lot to be desired.  The fallout has been immense, and a magnifying glass has been placed over many issues relating to proper navigational practices and emergency management.  Environmental concerns have arisen amid reports of spilling oil and fuel  from the Costa Concordia’s hull.  And, now, the ship’s owner is faced with determining whether it should salvage, cut or sink it, a decision that should have major financial, logistical, and environmental risks and ramifications.

In short, the current and potential issues associated with the incident are limitless.  Thus, marine companies should view the matter as motivation to shore up their own policies and procedures.  As suggested by Kevin Gilheany of Maritime Compliance International, marine companies should take this opportunity to review their own navigation standards, as navigational error by the captain of the Costa Concordia is widely regarded as the main cause of the entire incident.  It also would be beneficial to use this incident to refresh both captain and crew with those navigation standards and to drive home the need to be vigilant at all times.  Marine companies also should ensure that their crew knows their emergency and evacuation protocol.  Moreover, if passenger vessels are in their fleet, they should ensure captain and crew understand that, in emergency evacuation scenarios, there is a responsibility on their part to evacuate the passengers first.  By taking such steps, vessel operators will improve their chances of avoiding a casualty of their own and certainly be in a better position to handle such a casualty in the event that one occurs.

Image from www.inquisitr.com

With 2011 in the rearview, businesses all over the country are looking forward to fresh start in 2012.  But the opportunity to start fresh will elude natural gas producers partaking in hydraulic fracturing operations, as recent events in Ohio have caused additional uproar concerning the practice.  On December 30, 2011, Ohio state officials ordered the indefinite closure of a fluid-injection well in Eastern Ohio.  The injection well, which is 9,200 feet deep and used for the disposal of used hydraulic fracturing fluids, was shut following a series of low-level seismic events in the area.

During the eight months preceding the closure, the Ohio Department of Natural Resources (ODNR) recorded ten seismic events within two miles of the well.  None of the seismic events registered above a magnitude of 2.7 (the threshold for surface damage is generally considered to be 4.0).  The ODNR acknowledged that there is no clear and direct correlation to drilling at the site of the injection well and seismic activity.  Nevertheless, the mere presence of the seismic activity was enough for Ohio officials to take action in light of the relatively low frequency of seismic activity traditionally occurring in the area.  Thus, the well was closed.  Then, on December 31, 2011, a 4.0 magnitude earthquake struck the area.  That prompted the Director of the ODNR and Ohio Governor John Kasich, who is a supporter of oil and gas exploration and spearheaded the opening of Ohio’s state parks and other public lands  to hydraulic fracturing operations in 2011, to halt the planned opening of four nearby injection wells indefinitely.

Scientists have opined that the cause of the seismic activity could be that some of the wastewater injected into the well may have migrated into deeper rock formations, allowing an ancient fault to slip .  While similar links between disposal wells and earthquakes have been suspected in Arkansas and Texas, this issue is the first of its kind in Ohio.

The events in Ohio represent yet another blow to hydraulic fracturing operations and may be representative of a tough year for the industry in 2012.

The EPA issued drafts of two vessel general permits seeking to regulate discharge from commercial vessels (military and recreational vessels are excluded) on November 30. The draft permits (1) Vessel General Permit for Discharges Incidental to The Normal Operation of Vessels (VGP) and (2) Small Vessel General Permit for Discharges Incidental to The Normal Operation of Vessels Less Than 79 Feet (sVGP) address environmental risks relating to ship-borne pollutants and invasive species from ballast water discharges. The new standards, if approved, will require commercial vessels to install technology strong enough to kill at least some of the fish, mussels and other organisms in ballast water before it’s dumped into harbors after ships arrive in port. The EPA’s brief overview of the two draft permits can be found here.

The draft VGP, if approved, will replace the current VGP (effective February 6, 2008) and will impose numeric ballast water discharge limits for most vessels. The draft VGP also contains more stringent effluent limits for oil to sea interfaces and exhaust gas scrubber washwater.

The draft sVGP, which is an entirely new permit, would authorize discharges incidental to the normal operation of non-military and non-recreational vessels less than 79 feet in length. Currently, a Congressional moratorium (initiated by Public Law 110-299 and subsequently extended by Public Law 111-215) exempts all incidental discharges, with the exception of ballast water, from commercial fishing vessels and non-recreational, non-military vessels less than 79 feet in length from having to obtain a Clean Water Act permit until December 18, 2013.  When the moratorium expires, the draft sVGP, if approved, would provide permit coverage for such vessels.  However, vessel owners/operators will be required to complete the sVGP Permit Authorization and Record of Inspection form, which must be signed and maintained onboard the vessel for the entire permit term.  Moreover, vessel owners/operators will be required to conduct an annual self-inspection and certify that he or she has done so by signing the form each year.

Undoubtedly, the drafts will be subject to much debate during the 75-day public comment period and beyond.  Comments can be submitted during the comment period online at http://www.regulations.gov (instructions are provided), by email to ow-docket@epa.gov, or by mail to Water Docket, U.S. Environmental Protection Agency, Mail Code: 2822T, 1200 Pennsylvania Avenue NW Washington DC 20460 Attention Docket ID No: EPA-HQ-OW-2011-{place appropriate number here} (0141 for VGP; 0150 for sVGP).  Additionally, the EPA will hold two public meetings and one webcast to give an overview of the proposed permits and to take comment. The webcast date and time has not been established, but the meetings are scheduled as follows:

1. January 11, 2012, 9:00 am – 5:00 pm (EST) or until all comments have been heard at EPA East 1153, 1201 Constitution Ave NW, Washington DC 20460;

2. January 23, 2012, 10:00 am – 5:00 pm (CST) or until all comments have been heard at Ralph H. Metcalfe Federal Building, Room 331, 77 West Jackson Blvd, Chicago IL 60604.

Following the public comment period, the EPA anticipates releasing a final draft of the permit in November 2012.