US Interior Dept Defends Decision to Re-Issue Drilling Ban

WASHINGTON (Dow Jones Newswires), Aug. 25, 2010

The U.S. Interior Department is defending its decision to withdraw, revise and re-issue a controversial ban on deep-water drilling after a federal judge questioned the department's ability to change the ban while it was being challenged in court.

In a supplemental briefing filed Tuesday with the U.S. District Court for the Eastern District of Louisiana, the Interior Department said its actions were "beyond question" under federal law.

The Interior Department also highlighted a number of documents, including email and hearing testimony, that provided the basis for its most recent ban.

The briefing represents the latest skirmish in a months-long battle over the administration's decision to suspend work on roughly 30 Gulf of Mexico drilling projects in the wake of an oil spill involving Transocean's Deepwater Horizon drilling rig.

Oil companies and service providers that work in the Gulf of Mexico say the moratorium punishes them unfairly, while some U.S. lawmakers say the halt on drilling kills jobs in a region already weakened by the BP oil spill.

The department was forced to revise and re-issue its moratorium after U.S. District Court Judge Martin Feldman overturned the initial ban, calling the action "heavy-handed" and "overbearing."

The department issued its first moratorium in May and then released a revised ban in July.

Shortly after the department issued the revised ban, Judge Feldman questioned its ability to cancel a ban that was still embroiled in a legal challenge.

On Tuesday, the department defended its actions by saying Interior Secretary Ken Salazar "has merely fulfilled his continuing duty to manage the [Outer Continental Shelf] by reanalyzing the previously directed suspensions, evaluating new information on the adequacy of safety and environmental protection standards for OCS lease operations in the Gulf of Mexico, and issuing a new decision."

A representative for Hornbeck Offshore Services Inc. (HOS), the company that challenged the department's moratorium in court, couldn't comment on the department's most recent position.

The department also submitted a list of several dozen documents that influenced its decision to release a revised ban.

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