The National Ocean Industries Association (NOIA) reported it is pleased with the Fifth Circuit's decision, which once again confirms the lack of legal merits of the Department of the Interior's moratorium on deepwater drilling, imposed on May 27, 2010. However, the Department's announcement that a revised moratorium is waiting in the wings and that the appeal of the lifting of the moratorium continues only adds confusion and uncertainty for the offshore industry at the worst possible time and portends additional economic devastation to an area already on its knees.
The Fifth Circuit ruled late last night that the lifting of the moratorium ordered by Judge Feldman would stay in place, at least until August 30, 2010, when a panel of judges is scheduled to hear the matter in more detail. Although a moratorium on deepwater drilling does not, at this moment, technically exist, companies are extremely hesitant to proceed with any exploration plans without more certainty that DOI won't order them to stop, either after the August 30th hearing or under a new moratorium.
The Court has opened the door, for the second time, for the Administration to constructively sit down with the oil and gas industry to reach a sensible agreement that would allow exploration to proceed in the safest possible manner. However, it appears that the desire to reach an amicable solution is not as appealing to the Department as the urge to slap the industry with another political moratorium, and delay progress further through a likely inevitable future round of litigation.
While industry battles with government lawyers, exploration is stalled, deepwater rigs are being stacked, companies are looking for work outside the United States, and Americans who work hard to provide energy for our country are being laid off. Recent estimates indicate that for every deepwater rig not working, 1,400 jobs are lost.
The environmental and economic impacts of the Deepwater Horizon accident are devastating, but the imposition of the original moratorium and ensuing litigation has already idled exploration for 43 days, and now the promise of a "new and improved" moratorium will continue to put more people out of work and unnecessarily compound the economic plight of those living in the Gulf. All this, and the President's Commission has not yet begun work on its six-month review tied to the original moratorium.
Meanwhile, members of NOIA - and the oil and gas industry as a whole - have been working tirelessly to assist in the containment and clean up of the oil since April 20. In addition, the industry has done a top to bottom review of safety procedures to guard against a similar accident now and in the future. As part of this top to bottom review, industry has voluntarily suggested additional safety checks and backups to regain the public's confidence in offshore exploration.
NOIA and its members stand ready to provide assistance and suggestions outside the courtroom to a safe and sensible solution. Other countries have found a way to continue to explore without a moratorium or litigation, and so should we.
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