NOIA Encouraged by Federal Court Decision on Drilling Moratorium

NOIA is encouraged by the decision in Federal court in New Orleans. Judge Martin Feldman's ruling means that, from this point forward, more attention must be paid to the rule of law and that the Administration must fully consider the economic impacts of its blanket moratorium on offshore drilling operations.

By imposing the moratorium on offshore drilling operations, the Administration had side-stepped the standard processes that ensure fact-based decision making. The lawsuit's success underscores that federal decisions must be made on the basis of demonstrable proof that ongoing operations pose some risk, not on the simple political expediency of declaring a stop work order. Since the 33 deepwater drilling platforms were closely re-inspected after the Deepwater Horizon accident and deemed safe to continue their work, there remains no basis for maintaining a ban on drilling operations.

Further, although not the subject of the lawsuit specifically, this decision also recognizes that the Administration's outright ban imperiled tens of thousands of jobs in the Gulf region, potentially delivering a blow to the region's economy. Each idled deepwater drilling rig would result in a loss of approximately 1,400 direct and indirect jobs, for a grand total of 46,200 jobs lost. If left in place for months, the resulting job loss in the region could reach twice that amount as the layoffs and loss of revenue have a cascading effect throughout the economy.

NOIA calls upon Secretary Salazar to abandon the Administration's efforts to re-institute the moratorium. After all, ending the moratorium does not mean that additional safety measures could not be instituted, many of which have been recommended by industry. Casting aside the "one size fits all" cloak of the moratorium allows the industry and the Administration to mutually explore other remedies, including increased inspections during the drilling process, the use of a third party team of experts to oversee exploration activities, and renewed guarantees of response capabilities as exploration continues.

NOIA hopes that this decision today serves as a wake-up call to the Administration to re-think their blunt response to the Deepwater Horizon incident. We encourage them to work with industry to find a way for drilling operations to continue, albeit with perhaps greater safeguards against accidents. To do otherwise would cripple this vital sector in the region's overall economy.


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