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Noble Energy, Inc. v. Salazar

ELR Citation: 42 ELR 20056
Nos. 11-5114, (D.C. Cir., 03/02/2012)

The D.C. Circuit remanded a Minerals Management Service (MMS) order obligating an oil and gas company to plug permanently and to abandon its oil wells off the coast of California. The company argued that its contractual obligations under the lease, including any duties to plug and abandon the well, were released when the government materially breached its lease agreement. The government countered that a breach of contract by the United States does not discharge the nonbreaching party from compliance with its independent statutory and regulatory obligations. But because the government's brief failed to include any definitive interpretation of the plug and abandon regulations, which may be due to the fact that the MMS was abolished in May 2010—more than one year before the government filed its brief in this proceeding—remand is necessary. It is up to MMS' successor to interpret its regulations in the first instance and to determine whether they apply here. If they do, the government must explain why.