Judge to Decide Ban on Deepwater Drilling

A federal judge in New Orleans is considering whether to lift the U.S. government’s six-month ban on deepwater drilling imposed after the BP Deepwater Horizon disaster. Judge Martin Feldman said he will decide by Wednesday. The Interior Department imposed the drilling moratorium as part of the Obama administration’s effort to show it was responding to the disaster. No new permits for deepwater drilling in the Gulf are being approved and drilling at 33 existing exploratory wells has been suspended. But the lawsuit Feldman is considering, filed by Hornbeck Offshore Services of Covington, La., claims the government arbitrarily imposed the moratorium without any proof that the operations posed a threat. Hornbeck, which ferries people and supplies to offshore rigs, says the moratorium could cost Louisiana thousands of jobs and millions of dollars in lost wages.

Feldman, who was appointed by President Ronald Reagan in 1983, has called the case by Hornbeck Offshore Services LLC and other marine service and shipyard companies against the Interior Department a matter “of national significance” and that the case will proceed on a “highly expedited basis.” A federal judge from Houston with a similar case brought June 17 by rig operator Diamond Offshore Co. listened by telephone.

Government lawyers said the Interior Department has demonstrated industry regulators need more time to study the risks of deepwater drilling and identify ways to make it safer. “The safeguards and regulations in place on April 20 did not create a sufficient margin of safety,” argued the Justice Department.

During Monday’s hearing, Feldman asked a government lawyer why the Interior Department decided to suspend deepwater drilling after the rig explosion when it didn’t bar oil tankers from Alaskan waters after the Exxon Valdez spill in 1989 or take similar actions in the wake of other industrial accidents. “The Deepwater Horizon blowout was a game-changer,” said the Government. “It really illustrates the risks that are inherent in deepwater drilling.”