On June 22nd, federal Judge Martin Feldman overturned the six-month drilling moratorium the Obama administration put in place. The lead plaintiffs in the case were Hornbeck Offshore Services, which represented five other companies that would be impacted by the moratorium, and the State of Louisiana. The plaintiffs argued that the drilling moratorium would cripple the oil and gas industry and the economy, causing massive job losses for hundreds of thousands of Gulf coasts residents. Over 30 percent of America’s domestic oil production comes from the Gulf Coast and 64 percent of active releases are in the deep water of the Gulf Coast. (pg. 6)

In his 22-page ruling, Judge Feldman provided important background for what the federal government needs to impose a moratorium. Overall, he noted that the federal government “may direct a suspension of operations or suspension of production ‘when activities pose a threat of serious, irreparable, or immediate hard or damage. This would include a threat to life (including fish and other aquatic life), property, any mineral deposit, or the marine, coastal or human environment.’” (pg. 8)

This is exactly what Interior Secretary Ken Salazar and the Obama administration based their actions on, saying the moratorium was based on the recommendations of a bipartisan commission the president created after the Gulf oil spill. The commission included “experts from state and local governments, academic institutions, and industry and advocacy organizations.” (pg. 2) Salazar stated that the conclusions of the commission were peer reviewed by seven independent experts of the National Academy of Engineering. But the plaintiffs rejected this. The Judge summarized their rebuttal by saying:

“The experts charge [the statement] was a ‘misrepresentation' ... Although the experts agreed with the safety recommendations contained in the body of the main Report, five of the National Academy experts and three of the other experts have publicly stated that they ‘do not agree with the six-month blanket moratorium’ on floating drilling ... A blanket moratorium was added after their final review, they complain, and was never agreed to by them.”

After a 14-day consideration, Judge Feldman ruled in favor of the plaintiffs. Here are his key findings:

• Broadly, “the Report makes no effort to explicitly justify the moratorium: it does not discuss any irreparable harm that would warrant a suspension of operations, it does not explain how long it would take to implement the recommended safety measures.” (pg. 4)

• Responding to the disagreement over experts in the report: “Indeed, while the government makes light of the fact that several of the experts disagree with the recommendations of the Report by noting that they do not disagree with the findings, of greater concern is the misleading text ... that seems to assert that all of the experts agree with the Secretary’s recommendation. The government’s hair-splitting explanation abuses reason, common sense, and the text at issue.” (pg. 19)

• Even though the Report explains there is much greater risk in drilling in deeper water, that isn’t an explicit reason for putting in place an industry wide moratorium as needed under the Outer Continental Shelf Lands Act.

• After reviewing all of the reports submitted by both sides, “the Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium.” (pg.17)

• Concerning immediate possible risks of immediate danger, “the Report patently lacks any analysis of the asserted fear of the threat of irreparable injury or safety hazards posed by the thirty-three permitted rigs also reached by the moratorium.” (pg. 19) In other words, just 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.” (pg. 21)

• In conclusion, “the defendants have failed to cogently reflect the decision to issue a blanket, generic, indeed punitive, moratorium with the facts developed during the thirty-day review.” (pg. 21)

Here is the Wall Street Journal Article that includes the link to the report-- http://blogs.wsj.com/law/2010/06/22/new-orleans-judge-blocks-offshore-dr...