U.S. Loses Bid to Shield Papers in Drill-Ban Case

Interior Secretary Kenneth Salazar must turn over materials to opponents of a deep-water drilling moratorium after a judge found the records supported claims the U.S. didn’t weigh new evidence in ordering a revised ban.

Salazar had agreed to give drilling-ban opponents all of the materials dated after July 12 when he issued a second moratorium to replace the first one imposed after the BP Plc oil spill. U.S. District Judge Martin Feldman in New Orleans on June 22 struck down the first moratorium as overly broad.

Ensco Offshore Co. and other oil industry opponents claim Salazar issued the second moratorium without considering new evidence. They sought a court order for the U.S. to turn over about 8,000 pages of documents and e-mails written between the two bans. U.S. Magistrate Judge Joseph C. Wilkinson Jr. today ordered the U.S. to turn over the papers after reviewing them.

“The record of withheld materials dated after June 21, 2010, which I am ordering must be disclosed, is rife with evidence that the second moratorium decision was made on June 22 and that the subsequent agency deliberations were after-the-fact justifications for that decision,” Wilkinson said in his order.

Feldman, in a separate ruling today, gave the parties until Sept. 20 to appeal Wilkinson’s decision.

“We are reviewing the judge’s decision,” Kendra Barkoff, a spokeswoman for Salazar, said in an e-mail.

Sean O’Neill, Ensco’s investor relations chief, didn’t immediately return a call seeking comment.

‘Unequivocal’ Statements

Drilling ban opponents claim Salazar broke federal laws by issuing the second moratorium without properly considering new evidence and conferring with governments and businesses affected by the policy.

Wilkinson said he gave great weight to Salazar’s “unequivocal” press statements and congressional testimony on June 22 and June 23 that, in the secretary’s words, the agency would “issue a new order in the coming days that eliminates any doubt that a moratorium is needed, appropriate and within our authorities.”

“These actions,” Wilkinson said, “establish that a final decision had already been made by the decision maker and that any subsequent deliberative discussions among his subordinates would only serve to buttress that fait accompli.”

Spill Response

Salazar and other regulators claim they withdrew the first moratorium on Feldman’s order and issued a second set of drilling suspension rules only after investigating and re-evaluating the industry’s deep-water drilling practices and spill-response capabilities. Salazar turned over 28,063 pages of material documenting his deliberative process, withholding about 8,000 pages, saying federal law allowed him to shield the agency’s pre-decision process.

Ensco claims the second moratorium is an illegal mirror image of the first ban, which Feldman ordered the U.S. not to enforce.

President Barack Obama imposed the first moratorium on drilling in waters deeper than 500 feet on May 28 in reaction to the worst oil spill in U.S. history, caused by the sinking of Transocean Ltd.’s Deepwater Horizon rig in April.

Feldman overturned that ban in a lawsuit brought by Hornbeck Offshore Services Inc. and joined by Louisiana Governor Bobby Jindal and scores of business and industry groups.

The Hornbeck case, which remains focused on the initial drilling moratorium, has been appealed to the U.S. Court of Appeals in New Orleans. That court is weighing whether Salazar had the legal authority to withdraw and then re-impose an agency policy that had been overturned by a federal judge.

Ensco filed its suit targeting the second drilling ban in July. Feldman has scheduled oral arguments in that case for next week.

The case is Ensco Offshore Co. v. Salazar, 2:10-cv-01941, U.S. District Court, Eastern District of Louisiana (New Orleans). The appeal case is 10-30585, U.S. Court of Appeals for the Fifth Circuit (New Orleans).

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