Judge finds DOI in contempt for imposing second deepwater ban

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Feb. 3 -- A federal district court judge in New Orleans found the US Department of the Interior in contempt of his order to lift a moratorium on deepwater drilling, which DOI imposed following the Macondo well accident and oil spill last spring. Regulators acted with “determined disregard” by instituting a second ban after Judge Martin L.C. Feldman overturned the Obama administration’s first moratorium on June 22, Feldman said in a Feb. 2 ruling.

He said that each step DOI took after he imposed a preliminary injunction against the first moratorium showed its defiance. “Such dismissive conduct, viewed in tandem with the reimposition of a second blanket and substantially identical moratorium, provide this court with clear and convincing evidence of the government’s contempt,” Feldman said. DOI is reviewing the judge’s decision, a spokeswoman told OGJ on Feb. 3.

Hornbeck Offshore Services LLC and other offshore companies sued to overturn Interior Sec. Ken Salazar’s first deepwater drilling moratorium and continued their action when he imposed the second on July 12. Feldman also granted their request to recover their “significant” legal expenses on Feb. 2. 

He said Salazar issued orders on July 12 for the US Bureau of Ocean Energy Management, Regulation, and Enforcement to withdraw suspension letters it had issued to deepwater operators under the first moratorium, but also told the agency to issue blanket orders under the second, which was similar.

It disabled the same rigs and activities, although it dropped the 500 ft depth standard from the first and replaced it with restraints on all rigs using subsea blowout preventers or surface BOPs on a floating facility, Feldman said. It also imposed the same Nov. 30 expiration date that was in the first moratorium, he added.

Two Republican congressional energy leaders commented on Feldman’s latest ruling on Feb. 3. “While I was able to understand the administration’s initial reaction in suspending operations, the reality is that the moratorium is still in effect, and this directly violates the court’s ruling,” said US Sen. Lisa Murkowski (R-Alas.), the Energy and Natural Resources Committee’s ranking minority member.

“There are billions of barrels of oil and millions of jobs, from Alaska to Louisiana, that Americans should be benefiting from. Instead, we’re losing good jobs and paying prices at a time when Americans are already tightening their budgets,” she maintained.

US House Natural Resources Committee Chairman Doc Hastings (R-Wash.) said that both Feldman’s original ruling striking down the deepwater drilling moratorium and his latest decision to hold DOI in contempt of court “correctly puts the letter of the law ahead of the Obama administration’s agenda.” Hastings added, “Hopefully, this ruling takes us one step closer to ending the de facto moratorium in the Gulf of Mexico.”

Contact Nick Snow at nicks@pennwell.com.

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