Judge to Rule on Drilling Moratorium


A New Orleans federal judge plans to decide by Wednesday whether the Obama administration’s temporary ban on deepwater offshore drilling can continue, a court official said Monday.

At a hearing Monday in the U.S. District Court for the Eastern District of Louisiana, Judge Martin Feldman said that he aimed to rule “no later” than Wednesday at noon on a lawsuit brought against the government by oil-service companies affected by the ban, said Judge Feldman’s case manager, Steve Hill. Mr. Hill said the judge would try to rule as early as Tuesday.

The lawsuit, filed in early June by Hornbeck Offshore LLC, a small oil-services company based in Covington, La., says the U.S. Department of Interior’s May 28 move to stop offshore drilling for six months after the Gulf of Mexico spill is “arbitrary” and “capricious.”

The suit was joined by a host of other small providers of services to the offshore oil industry, and counts the support of Louisiana Gov. Bobby Jindal, underscoring the growing rebellion against the moratorium in the Gulf Coast, a region where oil and gas drilling plays a significant economic role. On Friday, giant drilling contractor Diamond Offshore Inc. filed a similar lawsuit in Houston.

In a filing with the court, the Department of Interior said that it instituted the moratorium with a view “for the long-term future,” to reduce the likelihood of another disaster. “The public’s interest weighs heavily in favor of making sure that a tragedy like this does not occur again,” the filing said. Environmental groups—such as the Sierra Club, the Natural Resources Defense Council and the Center For Biological Diversity—have filed briefs backing the moratorium.

Oil has been leaking into the Gulf of Mexico since the explosion and sinking of the Deepwater Horizon rig in late April. As the oil slick has grown, the owner of the well, BP PLC, has faced withering criticism and deepwater drilling has come under scrutiny.

The announcement of the moratorium last month sparked big losses for the share prices of companies involved in deepwater drilling, particularly in the Gulf of Mexico. Since then, uncertainty has swirled about the possibility of tighter regulations.

Separately, Interior Secretary Ken Salazar on Monday renamed the agency that oversees offshore drilling and swore in a new official to manage the unit as it undergoes a reorganization.

The Interior chief renamed the Minerals Management Service the Bureau of Ocean Energy Management, Regulation and Enforcement. He also swore in Michael Bromwich, a former Justice Department inspector general, to lead the newly named agency.

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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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