In a case with potentially far-reaching consequences, a federal appeals court has again found that the U.S. Chemical Safety Board has the authority to investigate the causes of offshore oil spills.
The board has been looking into the catastrophic blowout of a BP PLC well five years ago in the Gulf of Mexico that killed 11 people and caused the nation's worst offshore oil spill. The ruling -- unless it is overturned by the U.S. Supreme Court -- means that the Chemical Safety Board may also investigate other types of chemical spills in offshore waters in the future.
The drilling company, Transocean Deepwater Drilling Inc., contends the safety board does not have the authority to investigate.
Last September, a three-judge panel of the 5th U.S. Circuit of Appeals disagreed. On Thursday, the full court rejected by a vote of 9-6 Transocean's request to reconsider the panel's finding.
"It has some significant ramifications for offshore operators," said David Baay, a lawyer for Transocean. He said the board "will now be emboldened" to investigate offshore rig spills and "that means that any offshore incident of significance is likely to face one more federal agency among an already crowded field."
The ruling could increase costs for drilling companies and add confusion about which agency has the authority to investigate spills, he said.
Baay said Transocean was uncertain if it would appeal the ruling to the high court.
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The Chemical Safety Board's investigators are still looking into BP's Macondo well blowout on April 20, 2010, which sank Transocean's massive drilling rig, the Deepwater Horizon, after it erupted into flames.
Daniel Horowitz, a senior adviser for the board, said the agency's work on the blowout has so far uncovered important causes for what went wrong with the BP blowout that previous probes had not found.
"It's a very important case for us," he said of the court fight over the board's role.
The Chemical Safety Board was set up in 1990 and modeled on the National Transportation Safety Board. It looks at a broad set of issues during its investigations and makes recommendations, but does not set rules.
The dispute between the board and Transocean began in October 2011. That's when the board sued the company in federal court in Texas after Transocean declined to hand over thousands of pages of documents the board had subpoenaed.
Specifically, Transocean contended the board was not authorized by law to investigate accidents involving moving vessels or marine oil spills.
But the Justice Department's lawyers argued that the Deepwater Horizon was, in effect, a stationary piece of equipment in the middle of the Gulf and that the board was not investigating the oil spill but what happened to cause the spill.
In 2013, U.S. District Judge Lee H. Rosenthal agreed with the board and ordered Transocean to turn over the documents. The company complied with the ruling but appealed Rosenthal's decision to the 5th Circuit in New Orleans.
