Gov. Kathleen Blanco warned Jan 31, 2006 that the state would not support future offshore lease sales in the Gulf of Mexico unless Louisiana gets a share of the $5.7 billion in federal royalties generated by oil production there.

"It is abundantly clear that allowing development to occur where inadequate provisions are made for the protection of that development is irresponsible," Blanco wrote to the Mineral Management Service. "The amount of oil and gas activity off our coast means little if we have no coastal communities to take advantage of this activity."

August 14 saw U.S. District Judge Kurt Engelhardt rule that the August 16 lease sale #200 could proceed on August 16th over Gov. Blanco's objections however he warned potential bidders that Louisiana was likely to prevail in the scheduled November 14, 2006 trial. The crux of the legal argument seems to be the lack of an environmental impact study in the wake of Katrina and Rita. Leases for 3,865 blocks are at stake. Those leases are expected to produce 260 million barrels of oil and over one trillion cubic feet of natural gas.

When the USGS reported in October 2006 that overall wetlands loss from Rita and Katrina was 218 miles² or double their previous report, Blanco commented that this would strengthen the state's position that an undated environmental impact study should have been done.

Lousiana agreed to drop the case in October when the feds promised to update the environmental studies.