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Judge Dismisses Challenge to Deep-Water Drilling Ban

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Nov. 3 (Bloomberg) -- An oil industry challenge to the Obama administration’s ban on deep-water drilling was rendered irrelevant by new rules that rescinded the moratorium, a U.S. judge said today in dismissing the industry’s claim.

U.S. Interior Secretary Kenneth Salazar imposed the moratorium on drilling in waters deeper than 500 feet on July 12, replacing a ban struck down by U.S. District Judge Martin Feldman in New Orleans. Feldman threw out the first ban, imposed after the BP Plc oil spill, as too broad.

Offshore service companies challenged the second moratorium as well, claiming Salazar broke federal statutes by imposing a ban that was harming the economy of the Gulf Coast. Regulators rescinded the second ban Oct. 12 and asked Feldman to scrap the lawsuit as moot. Feldman today agreed with the U.S.

“The suspension orders imposing both moratoriums have been lifted,” Feldman said. “The Secretary of Interior claims no intention to institute a new moratorium; and this court has no right or authority to speculate that the government’s improper conduct will persist.”

Feldman didn’t rule on additional claims in the lawsuit that alleged regulators delayed permitting decisions and exceeded their authority in requiring drilling permits. He scheduled a status conference on Nov. 9.

Meeting Milestones

Salazar last month terminated the deep-water moratorium six weeks before it was set to expire, saying the industry was meeting milestones for improving drilling safety. Vital oil-spill response capabilities also had become available since BP’s blown-out well was permanently sealed in September, he said.

“In lifting the moratorium, the government cut the plaintiff’s chief complaints at their roots and provided them with the specific relief they seek from this court,” Feldman said today.

The Obama administration initially suspended deep-water drilling in May after an explosion aboard the Deepwater Horizon drilling rig in the Gulf of Mexico caused the worst marine oil spill in U.S. history.

After Feldman struck down the first moratorium, Salazar ordered a second in July. Ensco Offshore Co. filed a separate lawsuit directly challenging this ban, calling it a “mirror image” of the overturned policy.

Ensco vice president Sean O’Neill and Kendra Barkoff, press secretary of the Department of Interior, didn’t immediately respond to calls for comment.

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

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