The Obama Administration acted in contempt by continuing its deepwater drilling moratorium after the policy was struck down, a New Orleans judge ruled.
Interior Department regulators acted with “determined disregard” by lifting and reinstituting a series of policy changes that restricted offshore drilling, following the worst offshore oil spill in U.S. history, U.S. District Judge, Martin Feldman of New Orleans ruled yesterday.
“Each step the government took following the court’s imposition of a preliminary injunction showcases its defiance,” Feldman said in the ruling.
“Such dismissive conduct, viewed in tandem with the re- imposition of a second blanket and substantively identical moratorium, and in light of the national importance of this case, provide this court with clear and convincing evidence of the government’s contempt,” Feldman said.
President Barack Obama’s administration first halted offshore exploration in waters deeper than 500 feet in May, after the explosion and sinking of the Deepwater Horizon drilling rig off the Louisiana coast sparked a subsea blowout that spewed more than 4.1 million barrels of oil into the Gulf of Mexico.
Feldman overturned the initial ban as overly broad in June, after the offshore-drilling industry and Gulf Coast political and business leaders challenged it. Almost immediately, U.S. Interior Secretary Kenneth Salazar announced he’d find another way to block offshore exploration until the industry beefed up drilling safety and oil-spill response capabilities in reaction to the Gulf oil spill.
Salazar instituted a second drilling ban in July, which was also challenged by an industry lawsuit that claimed the ban was devastating the Gulf Coast economy, which is heavily dependant on deepwater drilling activities. That ban was rescinded in October, before Feldman could rule on its validity.
Feldman later ruled that enhanced drilling safety rules Salazar imposed to permit companies to resume offshore exploration violated federal law, and he struck those down as well. The offshore industry and Gulf Coast interests complained to Feldman that regulators were continuing to block the resumption of drilling activity despite his rulings.
Neither Justice Department spokesman Wyn Hornbuckle nor Interior Department spokeswoman Kendra Barkoff immediately returned e-mail messages sent after regular business hours, seeking comment on Feldman’s ruling.
The Offshore Marine Service Association, a group representing offshore service vessels and shipyards, urged the president to end an informal moratorium on offshore drilling that it said remains in place.
“President Obama claims to have lifted the Gulf moratorium, yet not a single deepwater permit has been issued in nine months,” Jim Adams, the association’s president, said in a release after the ruling. “As a result, thousands of workers are out of jobs, Americans are paying more for gasoline and heating oil, and our nation is becoming even more dependent on unstable nations for our energy needs.”
Feldman also ordered the government to pay the legal fees of Hornbeck Offshore Services LLC, which filed the initial lawsuit. The company had described the fees as “significant.”
The case is Hornbeck Offshore Services LLC v. Salazar, 2:10-cv-01663, U.S. District Court, Eastern District of Louisiana (New Orleans).
© Copyright 2013 Bloomberg News. All rights reserved.