US Judge Blasts Obama Administration on Offshore Drilling Ban Order

(Dow Jones Newswires), Feb. 3, 2011

A U.S. federal judge blasted the Obama administration for "determined disregard" of his order to lift a ban on offshore oil and gas drilling last year, giving fresh ammunition to the oil industry and its allies on Capitol Hill who want the Interior Department to speed approvals of new offshore drilling projects.

The ruling by Judge Martin Feldman of the U.S. District Court for the Eastern District of Louisiana means the Interior Department could have to reimburse Hornbeck Offshore Services LLC, a Louisiana drilling company, for the costs of litigation that the firm brought last year challenging the legality of the drilling moratorium.

The drilling halt was first ordered last May in the aftermath of the April 20, 2010, Deepwater Horizon rig explosion and oil spill. Judge Feldman struck down the initial ban in June, and the Interior Department quickly ordered a second one.

In his ruling, Judge Feldman said Hornbeck was owed the money because the government's conduct amounted to contempt of court.

A spokeswoman for Interior Ken Salazar declined to comment late Wednesday.

In a written statement, Hornbeck's general counsel, Sam Giberga, said, "What is striking about today's ruling is that it holds the government, acting through its highest levels, in contempt of a federal court order."

Judge Feldman's slap at the Interior Department comes as some lawmakers are pressing the administration to speed up granting new permits for offshore exploration, pointing to the recent run-up in oil and gasoline prices. Gulf Coast lawmakers of both parties attacked the moratorium, and the Interior department's subsequent slow pace of issuing new drilling permits since the moratorium was officially ended in October.

The Obama administration justified its first moratorium on deep-water drilling in offshore areas by saying a timeout was needed to determine the causes of the Deepwater Horizon spill, the worst offshore oil spill in U.S. history. That ban was struck down in June by Judge Feldman on the grounds that it was overly broad.

The Obama administration immediately announced it would impose a second moratorium on deep-water drilling--a ban that lasted until October. The administration has also significantly reduced the offshore areas it will consider for new drilling in coming years, citing safety concerns raised by the Gulf spill.

The government has not issued any new permits to drill in deep water since the moratorium formally ended.

"Judge Feldman's decision is a sharp rebuke of the Interior Department for continuing to place politics before all else following the BP spill," said Sen. David Vitter (R., La.). "Federal permitting has fallen off a cliff, and the resulting impact on Louisiana families, jobs and domestic energy production has caused a lot of pain in coastal Louisiana."

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