Oil Spill Drilling Ban OverturnedJun 23, 2010 | Parker Waichman LLP
A federal judge who may have financial ties to the oil and gas industry has overturned the Obama administration’s six-month moratorium on deepwater drilling. The ban was imposed following the April 20 explosion on the Deepwater Horizon oil rig in the Gulf of Mexico, which spawned the largest oil spill in U.S. history.
According to the Associated Press, the moratorium had halted approval of any new permits for deepwater drilling and suspended drilling of 33 exploratory wells in the Gulf. It was first declared on May 6, and later it was extended for six months.
The moratorium was challenged by oil services companies. Politicians from states affected by the ban had also supported its end. They had argued the ban would result in tens of thousands of job losses if it stayed in place.
Yesterday in New Orleans, U.S. District Judge Martin Feldman ruled that the blanket moratorium in the Gulf was unjustified because it assumed that all deepwater drilling was as dangerous as BP’s operation aboard Deepwater Horizon.
“What seems clear is that the federal government has been pressed by what happened on the Deepwater Horizon into an otherwise sweeping confirmation that all Gulf deepwater drilling activities put us all in a universal threat of irreparable harm,” he wrote.
The ruling prohibits federal officials from enforcing the moratorium until a trial is held.
The decision means drillers – including BP – are free to resume deepwater operations. BP operates at least on of the 33 Gulf rigs impacted by the now-lifted ban. The company has not said if it will resume deepwater drilling there.
Two other firms, Shell and Marathon, said they would wait for any appeal before resuming drilling, the Associated Press said.
Yesterday after Feldman’s ruling was made public, Interior Secretary Ken Salazar suggested that the administration was not giving up on the ban. A statement he released yesterday read in part:
“We see clear evidence every day, as oil spills from BP’s well, of the need for a pause on deepwater drilling. That evidence mounts as BP continues to be unable to stop its blowout, notwithstanding the huge efforts and help from the federal scientific team and most major oil companies operating in the Gulf of Mexico. The evidence also continues to mount that industry needs to raise the bar on blowout prevention, containment, and response planning before deepwater drilling should continue.
“Based on this ever-growing evidence, I will issue a new order in the coming days that eliminates any doubt that a moratorium is needed, appropriate, and within our authorities.”
Last night, the White House said it would seek an immediate injunction against the ruling. “Continuing drilling at these depths without knowing what happened does not make sense,” said spokesman Robert Gibbs.
Not long after Judge Feldman made his decision public, environmental groups began questioning his motives. According to a report in The Guardian, the judge has owned shares in Transocean which owned Deepwater Horizon, and other firms in the industry. His most recent disclosure forms, from 2008, also showed that he sold stock in Halliburton, a firm that did cement work on Deepwater Horizon. Feldman’s other interests included Ocean Energy, Quicksilver Resources, Prospect Energy, Peabody Energy, Pengrowth Energy Trust, Atlas Energy Resources, and Parker Drilling, the Guardian said.
Judge Feldman is just one of many Gulf Coast jurists with interest in the industry, according to The Guardian. Several have already disqualified themselves from proceedings related to the spill, while others have sold holdings so that they can preside over such cases.
Josh Reichert, managing director of the Pew Environment Group, told The Guardian that the ruling should be rescinded if Judge Feldman still held the shares he disclosed in 2008.