U.S. to Issue New Drilling Moratorium


The Obama administration plans to issue a new order to halt deepwater oil and natural-gas drilling projects Monday, two people familiar with the matter said.

Details of the new order—such as how many rigs it would cover, and how it would be structured—were not immediately available. A spokeswoman for the Department of Interior didn’t immediately respond to messages seeking comment. Interior Secretary Ken Salazar is expected to announce the new moratorium order Monday afternoon.

In addition, the new chief of the federal agency that regulates offshore drilling is expected to announce a series of public hearings at which the administration will solicit public comment on the future of offshore drilling policy.

Michael Bromwich, director of the Bureau of Ocean Energy Management, is expected to describe his plans for hearings when he testifies Tuesday in New Orleans before a presidential commission set up to investigate the Gulf of Mexico oil spill.

The administration has been battling the oil industry in federal court for weeks over the legality of halting deepwater drilling operations in the wake of the April 20 accident involving BP PLC’s Macondo well.

The administration announced its moratorium on May 27, effectively halting new drilling operations in water depths greater than 500 feet. But a federal judge blocked the moratorium last month, saying it was arbitrary and capricious.

Last week, the Fifth Circuit Court of Appeals in New Orleans declined to suspend the lower court’s order lifting the ban. The Fifth Circuit is expected to hear the administration’s appeal of the lower court ruling by the end of August.

The administration’s moratorium has idled 33 rigs, including eight that had received permits to drill but which had not started drilling wells yet, according to the International Association of Drilling Contractors. The drilling industry has estimated the moratorium will cost rig workers as much as $330 million a month in direct wages, not counting businesses servicing those rigs.

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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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