Appeals court says no to Obama drilling moratorium


The administration may try to redraft the six-month ban imposed after the Deepwater Horizon spill in the gulf.

A federal appeals court Thursday rejected the Obama administration’s request to keep a six-month moratorium on deep-water oil drilling in place while it mounts a legal defense of the ban.

The decision, issued shortly after the three-judge panel of the U.S. 5th Circuit Court of Appeals heard arguments in a crowded New Orleans courtroom, was a second blow to one of the administration’s key responses to the April 20 Deepwater Horizon oil rig explosion and massive spill.

Attorneys for Interior Secretary Ken Salazar had urged the panel to leave the ban in effect while the administration appeals a lower court’s rejection of the moratorium. The ban had halted exploratory drilling at 33 well sites in waters deeper than 500 feet.

But the panel, in a 2-1 decision, said the administration had failed to show there would be “irreparable harm” if work resumed on the approved well sites in the Gulf of Mexico.

Eleven people were killed when the Deepwater Horizon rig exploded and sank. The broken well unleashed a torrent of oil that has flowed at as much as 60,000 barrels a day for more than two months, coating wildlife and fragile coastal areas in four states.

One judge dissented, saying he would have granted the government’s request to stay the lower court’s order to end the ban. The panel ruled unanimously, however, to hold an expedited hearing, set for late August, on the merits of the government’s argument to halt drilling.

U.S. District Judge Martin L.C. Feldman struck down the government moratorium on deep-water drilling on June 22, at the urging of drilling support companies that argued the ban threatened economic harm to the region. The companies, led by Hornbeck Offshore Services, argued Thursday that Feldman’s ruling was correct in deeming the administration action excessive and unsupported by facts.

Louisiana Gov. Bobby Jindal sat in the front row of the courtroom as the appeals court judges peppered lawyers for both sides with questions that foreshadowed their 2-1 ruling.

“We’re pleased the court did not reinstate the moratorium,” Jindal, a Republican, said in a statement. “However, it’s clear from the ruling that this matter is not resolved and there remains uncertainty about the future of deep-water drilling and thousands of jobs in our state.”

Jindal said the administration and Salazar “ignored the advice” of an independent panel, noting that five of seven National Academy of Engineering experts did not agree with the six-month blanket moratorium.

“The reality is that we absolutely want drilling to be done safely and do not want another spill or one more drop of oil on our coast or in our water, but thousands of Louisianans should not have to lose their jobs because the federal government can’t adequately do its job of ensuring drilling is done safely,” he said.

Catherine Wannamaker, a lawyer with the Southern Environmental Law Center appearing on the government’s side, said the organization would petition the court for a stay if drilling commenced.

“We were all surprised it came out so quickly and obviously disappointed that they didn’t grant us the stay,” she said. “If there is any sign that drilling would start again, we would all be prepared to go back to the court and seek a stay at that point. The court explicitly left open the door for that.”

Prior to arguments, a White House spokesman suggested the administration would recraft a moratorium, something Salazar has promised as well. “I would stay tuned on that,” spokesman Bill Burton said.

Carl D. Rosenblum, representing Hornbeck and the other plaintiffs, called the moratorium indiscriminate and noted that Louisiana officials had not been consulted before the government ordered the ban. He said the risk of another spill was “not zero” but very low.

“People are being put out of jobs, out of work. The rigs are leaving and going to foreign waters,” Rosenblum said.

Judge W. Eugene Davis said shutting down deep-water drilling was a “risky, pricey process.”

Judge Jerry E. Smith asked, “Why shut down all of them when you don’t really know the cause or commonality?”

Davis and Smith, appointees of President Reagan, represented major oil and gas industry interests during their years in private practice, according to a report released Thursday by the Alliance for Justice.

The third judge on the panel, James L. Dennis, was the dissenter. An appointee of President Clinton, he has significant investments in the energy industry, listing as much as $300,000 in such assets on his 2008 financial disclosure form, the liberal advocacy group reported.

In Washington, senior administration officials said they had asked BP about the feasibility of stepping up oil recapturing operations at the same time they attempt to replace the “top hat” well cap with a “capping stack” to better stanch the flow of crude into the gulf.

The emergency response teams struggling to contain the spill had planned to move in another ship, the Helix, to collect an additional 25,000 barrels a day, which would double the current capture rate. But at least one of the two ships now siphoning spilled oil would have to move away from the wellhead site to allow the new capping equipment to be put in place.

BP has been asked whether the crews can move in the Helix at the same time they attempt to replace the well cap with a more effective seal, to take advantage of a forecast of a week of calm weather.

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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