Deep-Water Drill Ban Public Policy, U.S. Tells Judge
U.S. regulators told a federal court that a revised deep-water oil drilling ban was a matter of public policy and should be upheld, while another court declared the original moratorium “legally and practically dead.”
“This is a policy call,” Guillermo Montero, a lawyer for the Interior Department, told U.S. District Judge Martin Feldman at a hearing in New Orleans today to consider a challenge to the revised rules.
“A policy call which I’m not enslaved to accept unless I find it was reasonably discerned,” the judge responded.
President Barack Obama’s administration in May imposed the first six-month ban on drilling in waters deeper than 500 feet in response to BP Plc’s Gulf of Mexico oil spill, the biggest offshore spill in U.S. history. Interior Secretary Kenneth Salazar issued new rules July 12 after Feldman found the first ban overly broad and threw it out.
The oil industry, joined by governors in Louisiana and Texas, has been fighting the bans in Feldman’s court and before the U.S. Court of Appeals in New Orleans.
The second moratorium was challenged in a suit filed by Ensco Offshore Co., which claims Salazar overstepped his authority, setting new rules in an attempt to circumvent Feldman’s June 22 order.
‘Mirror Image’
The latest ban is an illegal “mirror image” that should be overturned, because Salazar imposed it without considering new evidence to reach a new decision, as required by law, Ensco said in court papers. The second ban was “plainly engineered to evade the consequences” of Feldman’s order rejecting the original one, Ensco said.
Feldman said today he found it “staggering” that the day after the appeals court “temporarily upheld” his first ruling, regulators circulated an internal memo describing the need for a moratorium as “fact.” Three days later, Salazar implemented the second ban, which Feldman said led him to question how much reconsideration of new evidence the secretary undertook before issuing the same policy.
Feldman told lawyers today he would “try to get a decision out as quickly as is reasonable.”
Feldman overturned the first ban in a lawsuit brought by Hornbeck Offshore Services Inc. and joined by Louisiana Governor Bobby Jindal and scores of business and industry groups.
Appeal Dismissed
Salazar imposed the second ban July 12 and appealed Feldman’s order rejecting the first. The appellate court today dismissed the government’s appeal of Feldman’s order stopping enforcement of the May moratorium, finding the second ban made the first irrelevant.
The second ban remains in effect.
Feldman said today he was concerned regulators had unfairly “tainted” the entire deep-water drilling industry “because of perhaps improper conduct by a company or companies involved in the Deepwater Horizon explosion.”
The risks were systemic because “not a single operator” had the ability to adequately contain and clean up a massive oil spill in deep water, requiring the government to keep rigs idle until the industry rectified the problem, Montero, the government lawyer, replied.
“It wasn’t just BP trying to cap that well,” he told Feldman. “As of July 12, there was no capability.”
Government Objections
Feldman proceeded with today’s hearing over the objections of the government, which urged him to delay the session until regulators announced new findings that could lead to an early end to the ban.
Ensco’s lawyer, Adam Feinberg, said the industry has concerns that regulators have been trying to evade judicial review by withdrawing and reinstituting policies under consideration by Feldman and the appellate court.
“Here we are challenging the second moratorium, and we’re four months in, and they may be trying to do it again,” Feinberg said of the government’s request for a delay.
The new rules announced July 12 addressed Feldman’s concerns about the original ban, government lawyers said in court papers. The regulations suspend deep-water drilling until Nov. 30 at the latest. The government may lift the ban earlier if officials determine such operations may safely resume.
The original moratorium “has been revoked and superseded by a new directive” based on additional information, separate analysis and a separate administrative record, lawyers for the U.S. said in court papers. “The decision challenged by the plaintiffs’ complaint no longer exists.”
The case is Ensco Offshore Co. v. Salazar, 2:10-cv-01941, U.S. District Court, Eastern District of Louisiana (New Orleans). The appeal is Hornbeck Offshore Services v. Salazar, 10-30585, U.S. Court of Appeals for the Fifth Circuit (New Orleans).
To contact the reporters on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net; Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.
To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.
More News:
- Law ·
- U.S. ·
- Energy Markets
Rate this Page