Judge Blocks Obama's Ban on Offshore Drilling
Updated: 13 hours 42 minutes ago
(June 22) -- A federal judge in New Orleans today overturned President Barack Obama's six-month moratorium on any new deepwater drilling for oil in the Gulf of Mexico.
The White House said the administration would appeal. The ban on new drilling was imposed after an April 20 explosion on Transocean Ltd.'s Deepwater Horizon rig -- which was run by BP -- set off the country's worst oil spill in history.
Press Secretary Robert Gibbs said Obama believes strongly that drilling at such depths does not make sense and puts the safety of workers "at a danger that the president does not believe we can afford," according to The Associated Press.
U.S. District Judge Martin Feldman, who has owned stock in several oil-related companies, the AP reported, disagreed after hearing testimony from both sides Monday.
"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," Feldman said in his 22-page decision.
The Ronald Reagan appointee characterized the suspension as "generic, indeed punitive."
However, the AP reported Feldman's financial disclosure report for 2008, the most recent available, shows holdings in at least eight petroleum companies or funds that invest in them, including Transocean. The report shows that most of his holdings were valued at less than $15,000; it did not provide specific amounts.
It is not clear whether Feldman still has any of the energy industry stocks, the AP reported. Recent court filings indicate he may no longer have Transocean stock.
Feldman did not comment, the AP said.
Josh Reichert, managing director of the Pew Environment Group, told the AP that the ruling should be revoked if the judge still has investments in companies that could benefit from the decision.
"If Judge Feldman has any investments in oil and gas operators in the gulf, it represents a flagrant conflict of interest," Reichert said.
Since the explosion, the Interior Department has stopped approving any new drilling permits and suspended drilling at 33 wells already exploring for oil in the gulf. The government said it needed time to do a thorough safety evaluation to ensure that disasters like BP's blast don't happen again.
But Hornbeck Offshore Services, an oil services company based in Louisiana, filed a lawsuit challenging the moratorium. It argues that there's no evidence that continued drilling poses any threat of future oil spills, and that halting such operations could cost Louisiana thousands of jobs and millions of dollars in lost wages. The lawsuit was backed by oil companies, Louisiana's governor and other state officials.
CEO Todd Hornbeck said after the ruling that he is looking forward to getting back to work.
"It's the right thing for not only the industry but the country," he said, according to Bloomberg News.
A friend-of-the-court brief filed over the weekend by Louisiana Gov. Bobby Jindal says the moratorium could push oil companies to relocate their drilling operations to Brazil or Africa, with "little chance of their immediate return."
Henry Dart, special counsel for the Louisiana attorney general, also told Feldman that the government rushed to make the decision without consulting with state officials about the impact of the drilling ban, according to Bloomberg.
"Even after the catastrophic events of Sept. 11, the government only shut down the airlines for three days," Louisiana said in court papers that sought to lift the ban.
Lawyers for the Interior Department, backed by environmentalists, argued that time is needed to implement new safety rules for offshore rigs, especially those pertaining to undersea blowout preventers like the one that failed to halt BP's oil leak.
"The safeguards and regulations in place on April 20 did not create a sufficient margin of safety," Justice Department attorney Guillermo Montero said at the hearing Monday.
Asked by Feldman why the U.S. government didn't implement a similar moratorium after the 1989 Exxon Valdez spill, Montero called the Deepwater Horizon blowout a "game changer."
"It really illustrates the risks that are inherent in deepwater drilling," Montero said.
The U.S. government estimates that up to 60,000 barrels of crude may be flowing into the gulf each day, devastating coastal tourism and fishing industries.
The White House said the administration would appeal. The ban on new drilling was imposed after an April 20 explosion on Transocean Ltd.'s Deepwater Horizon rig -- which was run by BP -- set off the country's worst oil spill in history.
Press Secretary Robert Gibbs said Obama believes strongly that drilling at such depths does not make sense and puts the safety of workers "at a danger that the president does not believe we can afford," according to The Associated Press.
U.S. District Judge Martin Feldman, who has owned stock in several oil-related companies, the AP reported, disagreed after hearing testimony from both sides Monday.
"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," Feldman said in his 22-page decision.
The Ronald Reagan appointee characterized the suspension as "generic, indeed punitive."
However, the AP reported Feldman's financial disclosure report for 2008, the most recent available, shows holdings in at least eight petroleum companies or funds that invest in them, including Transocean. The report shows that most of his holdings were valued at less than $15,000; it did not provide specific amounts.
It is not clear whether Feldman still has any of the energy industry stocks, the AP reported. Recent court filings indicate he may no longer have Transocean stock.
Feldman did not comment, the AP said.
Josh Reichert, managing director of the Pew Environment Group, told the AP that the ruling should be revoked if the judge still has investments in companies that could benefit from the decision.
AFP/Getty Images
500 photos A satellite image released Tuesday shows oil spreading northeast from the leaking Deepwater Horizon well in the Gulf of Mexico. Click through for more photos.
Eyewitness to a Disaster
A satellite image released Tuesday shows oil spreading northeast from the leaking Deepwater Horizon well in the Gulf of Mexico. Click through for more photos.
AFP/Getty Images
NASA
"If Judge Feldman has any investments in oil and gas operators in the gulf, it represents a flagrant conflict of interest," Reichert said.
Since the explosion, the Interior Department has stopped approving any new drilling permits and suspended drilling at 33 wells already exploring for oil in the gulf. The government said it needed time to do a thorough safety evaluation to ensure that disasters like BP's blast don't happen again.
But Hornbeck Offshore Services, an oil services company based in Louisiana, filed a lawsuit challenging the moratorium. It argues that there's no evidence that continued drilling poses any threat of future oil spills, and that halting such operations could cost Louisiana thousands of jobs and millions of dollars in lost wages. The lawsuit was backed by oil companies, Louisiana's governor and other state officials.
CEO Todd Hornbeck said after the ruling that he is looking forward to getting back to work.
"It's the right thing for not only the industry but the country," he said, according to Bloomberg News.
A friend-of-the-court brief filed over the weekend by Louisiana Gov. Bobby Jindal says the moratorium could push oil companies to relocate their drilling operations to Brazil or Africa, with "little chance of their immediate return."
Henry Dart, special counsel for the Louisiana attorney general, also told Feldman that the government rushed to make the decision without consulting with state officials about the impact of the drilling ban, according to Bloomberg.
"Even after the catastrophic events of Sept. 11, the government only shut down the airlines for three days," Louisiana said in court papers that sought to lift the ban.
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Lawyers for the Interior Department, backed by environmentalists, argued that time is needed to implement new safety rules for offshore rigs, especially those pertaining to undersea blowout preventers like the one that failed to halt BP's oil leak.
"The safeguards and regulations in place on April 20 did not create a sufficient margin of safety," Justice Department attorney Guillermo Montero said at the hearing Monday.
Asked by Feldman why the U.S. government didn't implement a similar moratorium after the 1989 Exxon Valdez spill, Montero called the Deepwater Horizon blowout a "game changer."
"It really illustrates the risks that are inherent in deepwater drilling," Montero said.
The U.S. government estimates that up to 60,000 barrels of crude may be flowing into the gulf each day, devastating coastal tourism and fishing industries.
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