Judge Denies Motion to Keep Drilling Ban during Appeal

(Dow Jones Newswires), June 24, 2010

The U.S. federal judge who earlier this week overturned a six-month ban on deepwater drilling activity denied on Thursday a motion filed by the Obama administration to allow the ban to stay in place during the appeal process.

U.S. District Court Judge Martin Feldman in New Orleans had issued an injunction Tuesday that bars the government from enforcing a drilling ban put in place in late May in response to the massive oil spill in the Gulf of Mexico. U.S. Interior Secretary Ken Salazar filed a motion Wednesday to stay that injunction while the government pursued an appeal with the New Orleans-based 5th U.S. Circuit Court of Appeals.

In an order Thursday, Judge Feldman denied this motion "for the same reasons given" in the Tuesday ruling. In his original ruling, Feldman said the administration hadn't provided enough facts and that the administration's decision "simply cannot justify the immeasurable effect" on the plaintiffs, local economy, Gulf region and domestic energy needs that rely on oil.

The judge gave Salazar 30 days rather than 21 days "to report compliance" with Tuesday's order. Officials from Interior Department referred questions to the Department of Justice, whose officials weren't immediately available for comment.

Feldman on Thursday also denied a motion by plaintiffs, including Hornbeck Offshore, to enforce his own injunction. This means the government can file an emergency motion with the appeals court asking them to keep in place the drilling moratorium until the legal fight over Feldman's injunction is resolved.

The government is expected to file an emergency motion with the 5th Circuit asking them to keep the moratorium in place until the legal fight over Feldman's injunction is resolved. An official in the 5th Circuit clerk's office has said that the court has emergency three-judge panels on standby to handle emergency motions.

The judge's rulings on the drilling ban have been a blow to the Obama administration's efforts to respond to the ongoing oil spill and counter growing concerns about the impact it is having on the environment. The administration has found itself battling the competing interests of those who are concerned about the environmental toll even as they fret about the economic impact that the moratorium could have on the Gulf Coast.

Amid the legal wrangling over the six-month drilling ban, the executive branch is already considering issuing a new, scaled-back drilling moratorium, Salazar told lawmakers Wednesday

Offshore drilling companies and oilfield services companies with extensive operations in the Gulf of Mexico have been hit particularly hard by the uncertainty surrounding the future of deepwater drilling. Shares of companies such as Diamond Offshore and Noble briefly jumped on the judge's latest ruling before quickly giving back those gains.

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