Offshore Drilling Moratorium: Rejected Again By Federal Court Despite Obama's Appeal

NEW ORLEANS (AP) — A federal appeals court on Thursday rejected the federal government's effort to restore an offshore deepwater drilling moratorium, opening the door to resumed drilling in the Gulf while the legal fight continues.

The ruling is not the final word on the Obama administration's fight to suspend new drilling projects so it can study the risks revealed by the disastrous BP oil spill.

The same appeals court is expected to hear arguments on the merits of the moratorium case in late August or early September.

While it's possible that 33 exploratory wells suspended by the moratorium could resume drilling, companies might not bother with the expense while the ultimate future of the projects hangs in the balance.

Catherine Wannamaker, a lawyer for several environmental groups that support the moratorium, said she was disappointed by the ruling but expressed confidence that the Obama administration ultimately will win its appeal.

Wannamaker said it's unclear whether any offshore companies would resume drilling because Thursday's ruling doesn't resolve the case.

"Clearly, it's legally allowed," she said. "The question is, practically speaking, will anybody do it given the uncertainty? It's hard to know what will happen."

The CEO of one of the companies that sued to stop the moratorium, Covington-based Hornbeck Offshore Services, said he didn't know if any of the companies involved planned to resume drilling.

"We need to get back to work," Todd Hornbeck said of his company, which provides vessels that serve the offshore industry. "We can't work without any drilling units working."

The moratorium, which prompted a lawsuit from oil and gas service companies, was first rejected June 22 by U.S. District Judge Martin Feldman.

The Interior Department appealed, asking the 5th U.S. Circuit Court of Appeals to let the temporary ban stand until it ruled on the merits of the case.

Justice Department lawyer Michael Gray argued Feldman abused his discretion when he overturned the moratorium, which halted the approval of any new permits for deepwater projects and suspended drilling on the 33 exploratory wells.

Lawyers for the several oilfield service companies argued the administration failed to show that "irreparable harm" would take place if the drilling ban was lifted.

A three-judge panel rejected the government's arguments less than two hours after a hearing on Thursday afternoon.

Two of the 5th Circuit judges seemed to disagree about who should be shown more deference: the lower-court judge or Interior Secretary Ken Salazar, who imposed the moratorium.

Judge Jerry E. Smith leaned toward the judge, while Judge James L. Dennis said Salazar "is entitled to a lot of deference." Dennis partially dissented in the ruling, saying that he would have let the moratorium remain in place.

"Why are we in a position to second-guess the secretary on whether or not there's a threat of irreparable harm?" Dennis asked at the hearing.

After Feldman overturned the moratorium in June, Salazar announced he would issued a new, refined moratorium that reflects offshore conditions. Gray, the Justice lawyer, said Salazar was still considering crafting a new moratorium.

Hornbeck said he can only "wait and see" whether the Interior Department tries to impose a new moratorium.

"It's not solving any problems. It's creating new problems," he said. "There are better solutions than that."

Louisiana Gov. Bobby Jindal, a vocal critic of the moratorium, watched the hearing from the courtroom gallery. He said he was pleased by the ruling, but he remains concerned about the de facto moratorium that is keeping drilling from resuming and the threat of a second moratorium from Salazar.

"The federal government not being able to do its job is not a reason for thousands of Louisianians to lose their jobs," Jindal said.

___

Associated Press writer Alan Sayre contributed to this report.

Comments

[kitty61]

08:14 PM on 07/12/2010

Did you hear the news today...Exxon went to the White house and asked permission if they could buy BP or bid for BP if it comes up for sale, since when does a private company wanting to take over one private company listed on the stock exchange need permission from this administration.

Are we living in some communist country....did I wake up this morning and there has been some takeover of government I didn't hear about?

Where is that article on HP? Is it in the business section and I missed it?

[kitty61]

08:06 PM on 07/12/2010

There was a massive oil spill in the gulf of Mexico in 1979...the well was uncapped for nearly 10 months, the world didn't end.........the gulf, surprisingly....repaired itself and you would never have know that there was even a spill.

Maybe people are just over reacting to this spill...Its massive...I know...Its a catastrophe...I know...its not the end of the planet! Its now.....how about we just deal with this disaster and let the crisis go to waste this time.

Dose anyone remember it? the damage? the fish? anything? It was only 30 years ago, there must be people around that weren't allowed to fish or swim, how long, it hasn't been an impact of generations otherwise nobody would have enjoyed the Gulf over the last few years.

[professor]

09:33 AM on 07/12/2010

I might add: whenever I am out of a job, no-one, and I mean non-one, has any sympathy. "McDonald's is hiring," they say, with a laugh. Why don't they tell the oil rig workers, "Mcdonald's is hiring"?

[LittleMittens]

01:15 AM on 07/12/2010

I am sick to death of these morons screaming about the 'job'. It's just a job, you can get another one. Or a different one. What you can't get is a replacement for one third of our country being destroyed by this single well. When there are over 3,600 wells in the gulf right now, and 27,000 abandoned wells dating back to the 1940's, time to get a new 'job'

[Dr Juan]

08:01 PM on 07/25/2010

The failure statistics really do not look too bad - unless BP is drilling and taking short cuts.
Put a moratorium on BP drilling anything.
As posted many times, BP has accumulated a bad track record racking up more violations than all the other oil companies combined.

[redstateirate]

12:06 AM on 07/12/2010

The 5th Circuit upheld the LA district court judge's decision overturning the Administrations moratorium on deep-water drilling?

I'm shocked . . . shocked I tell you. Not by the outcome. Not by the fact the appeals court ruled within 2 hours. Not that the court sided with the oil industry despite the evidence all around us of the need for more study and less reckless production.

No. I'm shocked that there was actually 1 judge who dissented!

[mrJJ]

02:27 PM on 07/11/2010

BP ‘cuts payments to 40,000′ over incomplete claims forms

BP plans to cut payments to some 40,000 oil-spill claimants, potentially making life more difficult for individuals and businesses affected by the Gulf oil spill, a Louisiana official has said.

The Associated Press reports that Louisiana's secretary for children and family services, Kristy Nichols, found "a significant cut in daily payments" during a recent review of claims against BP, which appears to be related to incomplete forms.

In a letter to Ken Feinberg, the federal administrator of the oil spill claims process, Nichols wrote that it was "rash" of BP to cut payments to 40,000 of the 99,000 claims filed so far.

http://rawstory.com/rs/2010/0711/bp-cuts-payments-40000/

[Joseph Cecil Smith]

09:45 PM on 07/10/2010

this ban is not needed - we have already RUINED the gulf.. drill away, baby.. ain't nothing more you can destroy now anyway... what's the point of the last 40 years of eco-protection plans practiced by millions of caring folks along the gulf, except a few accountants at BP, who apparently were able to overrule drill-engineers on the rig-floor, to save a few bucks..
Obama is academic, when we need a warrior with brains making fast, non-dithering, accurate, battlefield decisions... instead he consults lawyers, and BP's lawyers get the power, and FEMA stands back, while BP allows the oil to ruin our coastal economy by UNDERSTATING THE SPILL(lies), and then UNDER-RESPONDING such that the oil is all in the coast/marshes.. and BP hides the oil using dispersants, but the hurricanes will pick it up and carry it all the way to Washington, DC, then on to New York.. betcha.. Obama's Katrina? no way, Katrina was easy compared to Oil in the weather, raining all up the coast.. it's likely to happen now that BP has hidden so much oil in the water column, instead of sucking it up fast as it's coming out of the ground. we should have DONE THIS MONTHS AGO- only now, 80 days late, are the fools running washington coming to the smart answer.. get the oil out of the water. but it's late now.

[research]

08:40 PM on 07/10/2010

wow, even the federal judges are bought and paid for.

[Kurfco]

10:10 AM on 07/10/2010

Just to establish a common base of facts, here is a listing of the offshore rigs working in the Gulf of Mexico as of July 9, 2010 (per the Baker Hughes weekly rig count):

Alabama: 0
Louisiana: 14
Texas: 2
Mississippi: 12

To all of you who continue to believe that the moratorium has not shut down the offshore drilling industry, you are wrong. You don't understand the difference between a driling "rig" and a drilling "platform". See my post below.

[fredisfred]

05:03 PM on 07/12/2010

Link, please.

[Kurfco]

09:48 AM on 07/10/2010

The LA Times ran a good article on the economic effects of the spill that contains some information on the size of the Louisiana fishing and tourism industries vs the oil industry. Hint: the oil industry dwarfs the other two combined.
See http://www.latimes.com/news/nationworld/nation/la-na-oil-spill-economy-20100709,0,5146345.story

[RetiredArmy04]

10:42 AM on 07/10/2010

Exactly why I can't believe the 1d10t in chief wants a moratorium. Does he want people out of work?

[daikon86]

12:19 PM on 07/10/2010

like the fishing, tourism and everything that involves the ocean, including the workers who install offshore wind turbines. These oil companies aren't even proud to be American either, they are mulitnational corporations, they are all based in some offshore island to avoid paying taxes for America which also screws all American workers, employed and unemployed.

[john649]

12:50 PM on 07/10/2010

ummmm, didn't offshore drilling PUT people out of work and cost millions??

or are we pretending that didn't happen?

[mlkx]

06:29 AM on 07/10/2010

No justice for the environment anywhere.

[GaryCharles]

03:51 AM on 07/10/2010

America, meet your Oil Cartel.

[noaxe397]

02:33 AM on 07/10/2010

Here is a simple way to get those 33 exploratory rigs shut down.

Unionize the workers, then the Republicans will blame the union for all the problems (like they do with the UAW or teachers) and immmediately take steps to shift the jobs to another country.

You listen to these Republican crying about the 9200 jobs lost due to the moratorium. It was a different tune in early 2009 when they were willing to accept hundreds of thousands of lost jobs with the collapse of GM and Chrysler.

"Don't worry, they will find jobs at the other auto makers." Well, I'm sure those oil workers will find jobs on other rigs.

[Tommygun264]

04:02 AM on 07/10/2010

It was actually closer to 2 million jobs that would have been lost if GM had gone bankrupt when you take into account the support businesses for whom GM & Chrysler were their either their largest or only customer. And you are right - the pubs were not only willing to accept the job losses, but rooting for them because it would have meant busting yet another one of the largest unions that has done the most to promote and uphold worker's rights, not only for their members, but helping to set minimum standards for all manufacturing businesses, including those without unions through competition in the marketplace. The dwindling of the middle class in America, the expansion of lower class and working poor, wage stagnation for the lower 95% and simultaneous septupling of income for the top 2% (while everyone else in the US have lost income in the past decade, income for the top 2% has increased 700%) creating an ever widening gap between the masses and the wealthiest 2% that has not existed in such disparity since 1029, can be directly correlated with the busting and shrinking of unions over the past 30 years. This is a recipe for a global depression which will be unavoidable unless there is massive financial reform and a return to financial regulation.

[yemaya]

09:41 AM on 07/12/2010

excellent post

[Word Watcher]

02:27 AM on 07/10/2010

So, after all the economic and environmental damage the BP oil spill (a euphemism for "gusher") has inflicted on his state, Jindal opposes the moratorium. And the courts have said that there is no proof that there will be "irreparable damage" if the moratorium is lifted. If the deep-sea drilling is allowed to continue, the Gulf states will deserve every tar ball that despoils their beaches. And I'm going to insist that my market clearly labels any seafood from the Gulf so I can avoid it as a hazard to human consumption.

[Lunamoth]

02:20 PM on 07/10/2010

WW-I like to call it "The Gulf War against Nature" or "The Gulf OIl Disaster..." Oh but wait, we already have one of those going on in another part of the world...hmmm...

[abbyrose86]

01:35 AM on 07/10/2010

This just pisses me off. I mean really...How MUCH was the judge paid for this ruling?

[Tommygun264]

04:13 AM on 07/10/2010

What I want to know is on what planet do they expect to enjoy their wealth or whatever status they hope to gain by pandering to their transnational corporate masters? Crops are developing a form of blight that has never been seen before, starting in the Gulf states and has now been seen as far north as Ohio, believed to be cause by rainwater which has been found to contain toxic carcinogenic chemical compounds that just happen to be released when the chemical dispersant Corexit (which BP has already dumped 1.4 million gallons of into the Gulf) reacts with crude oil. These chemical byproducts, which include benzine, evaporate into the air and come back down in rainwater, blighting crops and possibly causing the deaths of several inland birds (not sea birds, but inland birds) which are being found dead in their nests throughout the Gulf region in the past few weeks. What good is wealth and political clout when there is no uncontaminated food or water left to buy?

[Chip W]

06:31 AM on 07/10/2010

Well yeah. On what planet will they spend their money?
I don't think there's room in their world view for that question.
Money over life, and that's not going to stop.

[RetiredArmy04]

10:48 AM on 07/10/2010

Makes me laugh

[fredisfred]

05:06 PM on 07/12/2010

Yes, I'm sure this whole oil spill business is a real hoot to someone of your intelligence level.