Deepwater Drilling Moratorium Overturned

The U.S. Court of Appeals for the Fifth Circuit ruled last week that the Obama administration could not impose a six-month moratorium on Gulf of Mexico deepwater drilling, according to the New York Times.  

A three-judge panel ruled 2-1 that the administration did not prove “irreparable injury” is likely if the moratorium is not restored while the administration appeals a lower court’s decision lifting the ban.

In May, President Obama stopped approval for new deepwater drilling permits and suspended drilling at 33 exploratory wells while an independent panel conducts a six-month study of offshore drilling safety. Hornbeck Offshore Services, an oil-field service company, and other services and shipbuilding companies sued over the moratorium, saying it would have severe economic consequences.

The U.S. Court of Appeals stated in its ruling that the administration failed to show that there is “any likelihood” that deepwater drilling activities will resume before the appeal is heard. On the other hand, the panel stated the Interior Department “has the right to apply for emergency relief” if it can show that deepwater drilling “has commenced or is about to commence.” Any renewed request by the administration to reverse the lower court’s decision “will be evaluated on existing circumstances,” the court ruled.

The judges also expedited the administration’s appeal of the lower court’s ruling, scheduling arguments for the week of Aug. 30.

When the case was originally heard on June 22, the U.S. District Court had sided with Hornbeck, ordering the administration to lift the moratorium, saying the government had not provided adequate reasoning for it and that it would have a permanent and harmful effect on the economy of the Gulf region.

But the administration has asked the appeals court to reinstate the moratorium, while it appeals the lower court’s verdict on the ban, implements new safety measures and issues a modified version of the moratorium. It also cited hurricane season and the consequences of a second spill at a time when most of the country’s resources are being devoted to cleaning up the BP Gulf Spill.

The Interior Department is expected to issue a new deepwater ban soon, which would include modifications.






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