GULF SPILL:

Judge rules against Obama's deepwater-drilling ban

A federal judge today ordered the Obama administration to lift its six-month moratorium on deepwater drilling in the Gulf of Mexico, saying the government had not provided adequate reasoning for the blanket drilling ban.

U.S. District Court Judge Martin Feldman issued a preliminary injunction today blocking the Interior Department's moratorium on new drilling in waters deeper than 500 feet.

The White House and environmental groups said they would appeal the ruling.

"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," Feldman wrote in his 22-page ruling. "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."

Obama late last month halted approval of new deepwater drilling permits and suspended drilling at 33 exploratory wells while an independent panel conducts a six-month study of offshore drilling safety. But industry and Gulf state politicians have criticized the move, saying it will serve as an economic blow to an already struggling region.

Earlier this month, a group of offshore service companies that shuttle people and supplies to offshore drilling rigs filed the lawsuit challenging the moratorium. In the injunction granted today, Feldman said Interior had failed to provide adequate reasoning for the moratorium.

Feldman said the moratorium went too far and would have a permanent and harmful effect on the economy of the Gulf region.

"It is only a matter of time before more business and jobs and livelihoods will be lost" as a result of the moratorium, he wrote.

David Guest, an attorney with Earthjustice, which represented the environmental groups acting as defendants in the case, said the judge's block on the moratorium may not mean an immediate restart of deepwater drilling.

"I think that the Department of Justice will file an immediate motion for a stay and seek expedited review in the 5th Circuit Court of Appeals," Guest said.

Guest added that he hopes the courts "defer to the expertise of the government on matters of public safety."

"My thought is that if, due to mechanical and other failures, there was disclosure that something went wrong that made a 747 crash, it would be reasonable to expect the government to ground 747s for long enough until the government felt confident they were safe," Guest said.

But a lengthy appeals process could provide even more uncertainty for industry, Sen. Lisa Murkowski (R-Alaska) said.

"It's a terrible situation for us to be in, in terms of uncertainty on top of more uncertainty," the senator said. "If you've got litigation ongoing, that's probably going to take you far beyond your six-month moratorium, so in effect, it's worse than the moratoria itself because you will not have any operators go out there when you have the legal uncertainty, you have the administrative uncertainty, and what you will see is a shutdown, an effective shutdown in the Gulf."

Feldman is likely to be blasted by offshore drilling opponents because of his financial ties to the oil industry. In a 2008 financial disclosure report, the most recently available information, the judge reported owning stock in ATP Oil and Gas Corp., Transocean Ltd., Halliburton Co. and other companies in the oil industry.

ATP was drilling in the Gulf when the moratorium was put in place. It has suspended operations at one deepwater well and delayed drilling at two other wells. Transocean owned the Deepwater Horizon drilling rig that exploded in April, sparking the ongoing oil spill. And Halliburton had also been contracted by BP PLC to work on the failed well. But none of the companies were direct parties to the lawsuit challenging the moratorium.

Reports earlier this month found that more than half of the federal judges in the districts affected by the BP oil spill have financial ties to the oil and gas industry.

Reactions

Lawmakers, environmental groups and industry were all quick to react to Feldman's decision, with industry praising the move and environmentalists lamenting it.

"The moratorium was an initial reaction to concerns about the safety of offshore oil and natural gas operations," the American Petroleum Institute said in a statement. "With this ruling, our industry and its people can get back to work to provide Americans with the energy they need, and do it safely and without harming the environment."

The Independent Petroleum Association of America echoed those thoughts, calling the moratorium "misguided" and saying it "fundamentally failed to recognize how critical America's oil and natural gas industry is to the livelihoods of so many Gulf families."

But environmental groups that had praised the administration's drilling ban are calling the judge's decision astonishing and "one of the worst ideas ever proposed."

"To resume drilling as the disaster in the Gulf continues to unfold would be a slap in the face to the communities that have been hit hard by this tragedy," said Sierra Club Executive Director Michael Brune in a statement. "This disaster should be a wakeup call. We can't return to business as usual and face another disaster like this."

Catherine Wannamaker, an attorney at the Southern Environmental Law Center who argued before the court yesterday on behalf of the environmental groups, said the decision allows "short-term profit for some to trump safety, lives and the environmental health of the Gulf Coast."

Erich Pica, president of Friends of the Earth, had harsh words about the injunction.

"The judge's biased and out-of-touch injunction reads like it was written by Big Oil lobbyists, not an impartial arbiter of the law," Pica said. "I'm surprised that the judge failed to issue an apology to BP while he was at it."

Lawmakers are also taking heated positions on the issue. Rep. Bill Cassidy (R-La.) called the ruling "welcome news." And Sen. Mary Landrieu (D-La.), who has been pushing the administration to lift the ban, said she was "encouraged by the judge's decision" and that she thought "he made the right decision."

Landrieu told reporters she would urge the administration not to appeal the ruling, but instead to look for a better path forward "that would achieve the president's goals for safety and responsibility but at the same time would not jeopardize and threaten" the Gulf Coast economy.

But other Democrats are blasting the ruling.

Sen. Frank Lautenberg (D-N.J.) said the ruling was "incredibly shortsighted to say that similar rigs do not pose a danger."

"This is another bad decision in a disaster riddled with bad decisions by the oil industry," Rep. Ed Markey (D-Mass.) said. "The only thing worse that one oil spill disaster in the Gulf of Mexico would be two oil spill disasters."

Reporters Robin Bravender and Mike Soraghan contributed.