Gov't hopes new offshore drilling moratorium can survive legal challenge

Published July 13, 2010

| Associated Press

Rebuffed twice by the courts, the Obama administration is making another attempt to get a moratorium on deep-water drilling, stressing new evidence of safety concerns and no longer basing the moratorium on water depth.

But those who challenge the latest ban question whether it complies with a judge's ruling tossing out the first one.

The new order does not appear to deviate much from the original moratorium, as it still targets deep-water drilling operators but defines them in a different way.

Last week, a federal appeals court rejected the government's effort to restore its initial offshore deep-water drilling moratorium, which was issued following the April explosion of the Deepwater Horizon oil rig in the Gulf of Mexico and the catastrophic oil spill that followed. The moratorium was first blocked last month by U.S. District Judge Martin Feldman.

Government lawyers on Monday evening asked the U.S. 5th Circuit Court of Appeals in New Orleans to lift its order barring the moratorium because the new plan had been filed.

Lawyers also filed papers in U.S. District Court arguing that lawsuits brought by oilfield service companies seeking to block the original moratorium should be dismissed, given the terms of the new moratorium order.

White House spokesman Robert Gibbs said the new order responds to the judge's criticism that the original moratorium simply assumed that because one rig exploded, other rigs in the Gulf pose an imminent danger, too.

The new order "takes into account the varying circumstances of and the different types of technologies that are used for different blowout preventers in different depths of water in the Gulf," Gibbs said Tuesday.

Administration officials believe the new moratorium "will survive a federal judge looking at it again," Gibbs said.

Carl Rosenblum, a lawyer for the plaintiffs who sued to block the moratorium, said they are reviewing the new moratorium and "we have substantial concerns about its consistency with Judge Feldman's order." He wouldn't elaborate or say if they planned to challenge it in court.

Todd Hornbeck, CEO of the Covington, La.-based Hornbeck Offshore Services, said the companies that sued to block the original moratorium are weighing "all options" in the aftermath of the government's filing. Hornbeck said the companies aren't bound by the Justice Department's assertion that the plaintiffs would have to file a separate lawsuit to challenge the new moratorium.

"That's their view," he said Tuesday. "We're trying to figure out what we're going to do."

Interior Secretary Ken Salazar said he decided to put in place a new moratorium because of "evidence that grows every day of the industry's inability in the deep water to contain a catastrophic blowout, respond to an oil spill and to operate safely."

The new moratorium was panned by industry groups and generally supported by environmentalists.

The Interior Department said that like the original ban, this one applied to most deep-water drilling activities. But the department said the suspensions in the new moratorium "are the product of a new decision by the secretary and new evidence regarding safety concerns, blowout containment shortcomings within the industry, and spill response capabilities that are strained by the BP oil spill."

The new moratorium also establishes a process to gather and analyze new information on safety and response issues, which could allow for identifying conditions to resume certain deep-water drilling activities. And unlike the last moratorium, which applied to waters of more than 500 feet, the new one applies to any deep-water floating facility with blowout preventers.

The National Ocean Industries Association, an industry trade group for offshore production, said that while the new moratorium doesn't apply to anchored facilities using surface blowout preventers, "such facilities are generally used in shallow water, which makes the new suspension glaringly similar, if not even more restrictive than the original moratorium. It is not immediately clear how many facilities will be impacted."

In a Q&A document, the Interior Department said any count represents a snapshot in time. The document said that at the time of the BP spill, there were 36 floating drilling rigs that would have been affected by the new ban. It's unclear whether the new moratorium would be more or less restrictive than the original one.

The offshore industry also complained that while the new moratorium opens the door to lifting the restrictions if industry provides assurance for adequate containment and response, "the problem for industry is that it is unclear what exactly it will take to convince the administration that such capability exists."

Other industry groups also criticized the new moratorium.

"It is unnecessary and shortsighted to shut down a major part of the nation's energy lifeline while working to enhance offshore safety," said Jack Gerard, president and CEO of the American Petroleum Institute. "The new moratorium threatens enormous harm to the nation and to the Gulf region."

Environmental groups expressed support, but not all of it was unqualified. Jacqueline Savitz, senior campaign director for Oceana, an international ocean conservation group, said the administration had no other choice.

Kieran Suckling, executive director of the Center for Biological Diversity, said that while she supported the moratorium on deep-water drilling, "we're deeply disappointed that the secretary is still ignoring the very real dangers of shallow water drilling."

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Associated Press writers Michael Kunzelman in New Orleans and Pete Yost and Matthew Daly in Washington contributed to this report.

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