Charlie Savage at the NYT:
A federal judge in New Orleans on Tuesday blocked a six-month moratorium on deep-water drilling projects that the Obama administration had imposed in response to the vast oil spill in the Gulf of Mexico.
The White House swiftly said the administration would appeal the decision.
In a 22-page ruling, Judge Martin L. C. Feldman of Federal District Court issued a preliminary injunction against the enforcement of a May 28 order halting all floating offshore drilling projects in more than 500 feet of water and preventing the government from issuing new permits for such projects.
Citing the economic harm to businesses and workers in the gulf caused by the moratorium, Judge Feldman — a 1983 appointee of President Ronald Reagan — wrote that the Obama administration had failed to justify the need for the sweeping suspension, which he characterized as “generic, indeed punitive.”
He wrote that “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.”
Roger Pilon at Cato:
A quick review of Judge Feldman’s 22-page opinion indicates that the injunction was granted, under the Administrative Procedures Act, because the plaintiffs “would likely succeed in showing that the [Interior Department’s] decision was arbitrary and capricious. An invalid agency decision to suspend drilling of wells in depths of over 500 feet simply cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country.”
Judge Feldman took particular note of the Interior secretary’s May 27 Report, from which its moratorium order followed: “Much to the government’s discomfort and this Court’s uneasiness, the Summary also states that ‘the recommendations contained in this report have been peer-reviewed by seven experts identified by the National Academy of Engineering.’” As has been widely reported, those “experts” never signed off on any such moratorium.
As the court went on to say, “After reviewing the Secretary’s Report, the Moratorium Memorandum, and the Notice to Lessees, the Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium. …[T]he 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.”
Needless to say, the Obama administration is filing an immediate appeal. But for now, its sweeping moratorium is on hold.
Kate Sheppard at Mother Jones:
A federal judge in New Orleans on Tuesday sided with the oil industry, striking down the temporary moratorium on new offshore exploration and deepwater drilling the Obama administration imposed last month. That judge, it turns out, has in recent years had interests in Transocean—the world’s largest offshore drilling company and the owner of the Deepwater Horizon rig—as well as other energy companies engaged in offshore oil extraction.
According to the most recently available financial disclosure form for District Court Judge Martin Feldman, he had holdings of up to $15,000 in Transocean in 2008. He has also recently owned stock in offshore drilling or oilfield service providers Halliburton, Prospect Energy, Hercules Offshore, Parker Drilling Co., and ATP Oil & Gas. Feldman was appointed by President Ronald Reagan in 1983.
Obama’s six-month moratorium put the brakes on the approval of new permits for deepwater drilling and suspended work at 33 exploratory wells in the Gulf. A group of oil and gas companies, with the support of the state of Louisiana, asked the court to throw out the moratorium so they can continue drilling. Feldman heard two hours of arguments Monday on whether grant an injunction to lift the moratorium before rendering his decision today. Describing the moratorium as “arbitrary and capricous,” Feldman wrote in his opinion: “If some drilling equipment parts are flawed, is it rational to say all are? Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavy-handed, and rather overbearing.”
It hardly inspires confidence. Indeed, Ian Millhiser recently explained, “Industry ties among federal judges are so widespread that they are beginning to endanger the courts’ ability to conduct routine business. Last month, so many members of the right-wing Fifth Circuit were forced to recuse themselves from an appeal against various energy and chemical companies that there weren’t enough untainted judges left to allow the court to hear the case.”
This ruling is potentially a Godsend to the Obama Administration on a level with Joe Barton’s “apology.” Any opportunity to act aggressively against oil spills ought to be gratefully grasped.
Every one of those deep-water permits was issued in response to an application that included a plan for dealing with a blow-out. The BP fiasco demonstrated that those plans weren’t worth the paper they were printed on, even before the oil execs admitted they’d just Xeroxed them all from the same worthless source. (Listing a biologist who’s been dead for several years as a key resource was sort of a give-away.)
So if the permits can be revoked en bloc, why not revoke them one-by-one? It’s certainly not arbitrary or capricious to say that the drillers shouldn’t be allowed to go ahead and run the risk of accidents they don’t know to either prevent or cure, or continue to be rewarded for filing fraudulent documents.
And unless the (petroleum-soaked) Fifth Circuit steps in right away, why not a legislative fix? I’d love to see the Senate Republicans filibustering on behalf of the oil companies.
Nicolas Loris at Heritage:
While the effects on the price of gasoline from a drilling ban would be marginal, the economic effects felt by the Gulf would dump salt into the wound of a region coping with not just the spill but the recession in general. The American Petroleum Institute forecasts that if the drilling ban continues, more than 120,000 jobs could be lost in the Gulf Coast and key resources abandoned or moved elsewhere.
In fact, the Washington Times reports that “Oil company executives told Congress last week they would have to move their rigs to other countries because they lose up to $1 million a day per idle rig, and said there are opportunities elsewhere.” And let’s not forget the president’s pro-offshore drilling announcement included new bans on access to American energy, such as in Alaska’s Bristol Bay, where some lease sales were already pending.
Those who support the ban on offshore drilling warn about the risks of another disaster, but that’s why Department of Interior Secretary Ken Salazar had his list of recommendations for the president reviewed by the seven experts from the National Academy of Engineering. Their recommendation?
“A blanket moratorium is not the answer. It will not measurably reduce risk further and it will have a lasting impact on the nation’s economy which may be greater than that of the oil spill. We do not believe punishing the innocent is the right thing to do.”
The White House promised they would appeal right away. But they shouldn’t. The moratorium is unnecessary will have significant adverse economic impacts. Why take more jobs away from a region that is already struggling to manage a crisis?
UPDATE: Ed Morrissey