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Judge blocks offshore drilling ban
June 22, 2010
Judge blocks offshore drilling ban
A federal judge ruled today against the White House's six-month moratorium on deep-water drilling, saying that the ban will cause "immediate and irreparable harm to businesses" along the Gulf Coast.
The decision was issued by Judge Martin Feldman, one day after hearing arguments in the case in a federal court in New Orleans.
A White House official said the administration plans to appeal Feldman's decision to issue a restraining order blocking the government from enforcing the ban. Government lawyers would likely ask Feldman to say his temporary restraining order - and, if that were denied - seek a stay before the U.S. Court of Appeals for the 5th Circuit.
Feldman's decision was a win for Covington, La., based Hornbeck Offshore Services -- who filed the case roughly two weeks ago -- and other oil service companies who later joined the drilling rig owner's bid to block the ban.
The administration's ban, formalized on May 27, blocked drilling for oil and gas in water depths of at least 500 feet, effectively idling 33 deep-water rigs operating in the Gulf of Mexico. The administration had defended the move as necessary to allow federal regulators "time to step back and investigate both the root causes of the Deepwater Horizon disaster and to implement additional safety measures to ensure that we don't fall victim to another disastrous oil spill."
But Feldman dismissed those arguments in his ruling today.
Louisiana Gov. Bobby Jindal and the state's attorney general also had weighed in on the case, imploring Feldman to lift the ban, which they said could cost more than 10,000 jobs directly and indirectly.
It was unclear what practical effect the ruling would have on the 33 deep-water rigs that have been idled by the ban. The Interior Department has already issued new safety requirements for deep- and shallow-water drilling via two notices to lessees -- and at a minimum, those would have to be met before any exploration could resume.
Shallow-water operators, who must comply by many of those same newly announced standards before their stalled drilling projects can go forward, have been seeking clarification on some of the rules in discussions with Interior Department officials.
David Guest, a lawyer with Eartjustice, an environmental group that had intervened in the case, predicted that the idled rigs are unlikely to immediately pursue the voided drilling -- given the looming legal uncertainties and the high costs of moving workers and equipment to those projects.
The industry was quick to praise the ruling.
Shell Oil Co., called the ruling "an important step in returning thousands of oil service workers to their jobs" and stressed the high safety and training standards it requires in all its operations.
The American Petroleum Institute said the administration "acted appropriately" when it called for immediate rig inspections immediately after the Deepwater Horizon explosion, but said an "extended moratorium would have a tremendous impact on the nation's energy security."
It also would "cause significant harm to the region of the country that was already suffering from the spill - without raising safety or improving industry procedures," API said in a statement. "With this ruling, our industry and its people can get back to work to provide Americans with the energy they need, and do it safely and without harming the environment."
Environmental groups were not so pleased:
"It is astonishing that even as oil continues to spew into the Gulf of Mexico, oil companies are fighting the Obama administration's reasonable and measured pause on offshore drilling," said Jamie Rappaport Clark, executive vice president of Defenders of Wildlife. "We are extremely disappointed with today's ruling but will continue to oppose the industry's recklessness and disregard for American waters, natural resources and coastal communities."
Catherine Wannamaker, a senior attorney at the Southern Environmental Law Center who argued on behalf of the environmental groups, said the decision "allows short-term profit for some to trump safety, lives, and the environmental health of the Gulf Coast upon which so many depend."
"Continuing the same business as usual approach to risky deepwater drilling that led to the loss of life and environmental disaster in the Gulf as if nothing had happened is outrageous," Wannamaker said.
A separate, broader challenge has been filed by Houston-based Diamond Offshore. Lawyers representing Diamond and the federal government were set to meet with Judge Nancy Atlas in Houston this afternoon to outline the hearing schedule for that case.
A copy of the ruling is available after the jump.
--- Jennifer A. Dlouhy
LIVIN THE SALT LIFE 
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