Deep-Water Safety Rules Thrown Out by Federal Judge

Oct. 19 (Bloomberg) -- The federal judge who overturned a moratorium on deep-water drilling threw out regulations issued after the BP Plc oil spill, saying the government failed to give proper notice for its rulemaking.

U.S. District Judge Martin Feldman in New Orleans said today that the government was obliged to offer notice and accept comments on 10 new safety measures imposed on deep-water oil and gas operators in May. Feldman didn’t address Interior Department rules, known collectively as NTL-05, when he struck down the moratorium in June.

“NTL-05 imposes additional duties on operators and lessees,” Feldman said. “Notice and comment were required by law. The government did not comply and the NTL-05 is of no lawful force or effect.”

The Obama Administration first banned deep-water drilling in May and issued new rules in July after Feldman threw out the original moratorium as too broad. Regulators lifted the second ban last week, while retaining the safety rules imposed in May.

Feldman issued today’s ruling in a lawsuit challenging the second moratorium from July. The U.S. on Oct. 12 asked Feldman to dismiss this lawsuit, calling it irrelevant given the new policy. Feldman said he’d rule on the question after a Nov. 3 hearing.

The government is studying Feldman’s ruling and has no immediate comment on it Wyn Hornbuckle, a Justice Department spokesman, said in a telephone interview today.

The case is Ensco Offshore Co. v. Salazar, 2:10-cv-01941, U.S. District Court, Eastern District of Louisiana (New Orleans).