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Gulf Disaster
The New York Times, June 22, 2010

Drilling Ban Blocked; U.S. Will Issue New Order
By Charlie Savage

WASHINGTON — A federal judge in New Orleans on Tuesday blocked a six-month moratorium on deep-water drilling projects that the Obama administration imposed after the massive oil spill in the Gulf of Mexico. The White House swiftly vowed to appeal the ruling.

In a 22-page opinion, the judge, Martin L. C. Feldman of United States District Court, issued a preliminary injunction against the enforcement of a late May order halting all offshore exploratory drilling in more than 500 feet of water.

Citing potential economic harm to businesses and workers, Judge Feldman wrote that the Obama administration had failed to justify the need for such “a blanket, generic, indeed punitive, moratorium” on deep-water oil and gas drilling.

“The blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger,” wrote Judge Feldman, a 1983 appointee of President Ronald Reagan. The administration’s order halted 33 exploratory drilling projects and suspended new permits, but did not affect platforms that were already in production.

In a statement on Tuesday evening, Interior Secretary Ken Salazar said that within days he would issue a new order imposing a moratorium on deep-water drilling that would contain additional information showing why it was necessary.

Robert Gibbs, the White House press secretary, said the administration “will immediately appeal” the judge’s ruling to a federal appeals court in New Orleans. He said it made sense to suspend exploratory deep-water drilling until the completion of the investigation into the April 20 explosion at the Deepwater Horizon rig leased by BP and the still-flowing leak from the underwater well.

President Obama “strongly believes,” Mr. Gibbs said, “that continuing to drill at these depths without knowing what happened does not make any sense” and would jeopardize “the safety of those on the rigs and safety of the environment in the gulf.”

The immediate impact of the ruling was not clear. A White House official said the administration would likely seek a stay pending its appeal. And the decision left room for the government to assemble a stronger record in support of suspending such operations.

The ruling on Tuesday was the result of a lawsuit filed this month by a coalition of businesses that provide services and equipment to offshore drilling platforms. The coalition asked the judge to block the moratorium, arguing that there was no evidence that existing projects were unsafe. The state of Louisiana filed a brief supporting the lawsuit, arguing that the suspension would cause irrevocable harm to its economy.

Judge Feldman agreed, noting that “oil and gas production is quite simply elemental to gulf communities.” He portrayed the Interior Department’s record in support of the moratorium as inadequate and misleading, saying that a preliminary injunction was necessary because the suspension would likely be ruled “arbitrary and capricious” after a trial.

“Some of the plaintiffs’ contracts have been affected; the court is persuaded that it is only a matter of time before more business and jobs and livelihoods will be lost,” he wrote, adding, “The effect on employment, jobs, loss of domestic energy supplies caused by the moratorium as the plaintiffs (and other suppliers, and the rigs themselves) lose business, and the movement of the rigs to other sites around the world will clearly ripple throughout the economy in this region.”

Several groups critical of the ruling highlighted a financial disclosure form filed by Judge Feldman in May 2009. It showed that as recently as 2008, he owned stock in several energy-related firms — including Transocean, which owned the Deepwater Horizon rig.

A coalition of environmental groups released a statement by Catherine Wannamaker, senior lawyer at the Southern Environmental Law Center, decrying the ruling as “outrageous.”

“The tragic explosion, the unstopped gushing of oil, and resulting damage to fishing and tourism industries, cultures, wildlife and the whole Gulf Coast should be more than enough cause for pausing risky deep-water activities until safety and environmental protection is assured,” she said. “Unfortunately, today’s court decision allows short-term profit for some to trump safety, lives and the environmental health of the Gulf Coast upon which so many depend.”

Members of Congress issued warring statements over the ruling. Representative Darrell Issa, a California Republican, criticized the Obama administration’s efforts to impose the moratorium as “cold and irresponsible,” saying it would put “tens of thousands of jobs” in danger because oil and gas companies could move their equipment elsewhere in the world.

Representative Bill Cassidy, a Louisiana Republican, praised the ruling against the moratorium as “welcome news for thousands of Louisiana welders, pipefitters, engineers and roustabouts whose jobs were threatened by a political decision.”

But Representative Edward J. Markey, a Massachusetts Democrat, pointed out that the moratorium did not apply to the vast majority of rigs because they are already in production. He criticized resuming deep-water exploratory drilling before new safety measures are established.

“This is another bad decision in a disaster riddled with bad decisions by the oil industry,” Mr. Markey said. “The only thing worse than one oil spill disaster in the Gulf of Mexico would be two oil spill disasters. This judge’s decision flies in the face of mounting evidence that there are serious safety risks that must be examined with these 33 deep-water rigs before they start drilling again.”

Jackie Calmes contributed reporting.

Copyright 2010 The New York Times Company

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