Company asks judge to overturn drilling moratorium

Published 12:00 am Thursday, September 30, 2010

NEW ORLEANS (AP) — A company that owns and operates offshore drilling rigs asked a federal judge Wednesday to throw out the latest moratorium on deep water oil drilling in the Gulf of Mexico.

U.S. District Judge Martin Feldman didn’t immediately rule after hearing arguments on Ensco Offshore’s bid to overturn a six-month drilling ban imposed July 12 by the Interior Department.

The department issued an earlier moratorium, on May 28, after the BP PLC oil spill triggered by the April 20 explosion on the Deepwater Horizon rig. It issued the second moratorium after Feldman overturned its initial May directive to halt approval of new deep water permits and suspend drilling on 33 exploratory wells.

The government appealed Feldman’s June 22 ruling, but the 5th U.S. Circuit Court of Appeals dismissed its challenge Wednesday.

A divided three-judge panel from the 5th Circuit said the Obama administration’s appeal is moot because Interior Secretary Ken Salazar rescinded the first moratorium after Feldman overturned it and imposed the second.

In a dissenting opinion, 5th Circuit Judge James Dennis chided his colleagues for dismissing the appeal without deciding anything.

“This decision shirks our responsibility to render judgment upon the matter before us,” Dennis wrote.

Ensco claims Salazar issued the second moratorium to circumvent Feldman’s order. Company attorney Adam Feinberg called it a “complete sham” and an “improper, preordained decision.”

“The decision-making process has to be a reasoned decision-making process,” he told the judge. “You have to do your analysis first, then you make your decision.”

Government lawyers say the July directive came after a “reasoned decision-making process” based in part on new information. The second moratorium isn’t a “facade” just because it is nearly identical to the first, Justice Department lawyer Guillermo Montero said.

“They have to prove that, and they haven’t done that here,” Montero said of Ensco.

In July, Salazar said he imposed the new moratorium due to mounting evidence that the industry was ill-equipped to contain a catastrophic deep water blowout. Montero said none of the Gulf of Mexico’s offshore operators had valid oil spill response plans when the second moratorium was issued.

“That is a systemic flaw. That is a systemic risk,” he said.

The moratorium is set to expire Nov. 30, but federal officials have indicated it could end early.