Obama Bypasses Court, Reinstitutes Gulf Drilling Moratorium

Vessels surround a drilling rig at the site
of the Deepwater Horizon well (AP Photo)
The Obama administration has bypassed two court ruling and is reinstituting a moratorium on deep-water drilling. To justify the new moratium, they are presenting new evidence of safety concerns and no longer basing the moratorium on water depth. Last week, a federal appeals court rejected the government's effort to restore its initial offshore deep-water drilling moratorium, which was issued following the catastrophic Gulf oil spill in April. The moratorium was first blocked last month by U.S. District Judge Martin Feldman. The Justice Department said Monday it will file a motion with the U.S. District Court seeking a dismissal of that case, because the old moratorium is no longer operative, making the challenge moot. The department also will ask the appeals court to set aside Feldman's order of last month.

The new moratorium also establishes a process to gather and analyze new information on safety and response issues, which could allow for identifying conditions to resume certain deep-water drilling activities. And unlike the last moratorium, which applied to waters of more than 500 feet, the new one applies to any deep-water floating facility with blowout preventers.

The National Ocean Industries Association, an industry trade group for offshore production, believes the new moratorium doesn't apply to anchored facilities using surface blowout preventers. Such facilities are generally used in shallow water. It is not immediately clear how many facilities will be impacted."

Shallow Water Drillers Express Concerns Over Drilling Moratorium

Members of the Shallow Water Energy Security Coalition issued the following comments regarding the Department of Interior's new moratorium blocking deepwater drilling in the Gulf of Mexico (GOM) through November 30, 2010.

Randy Stilley, President and Chief Executive Officer of Seahawk Drilling, Inc., noted:

"Interior said shallow water drilling activities can 'continue to move forward' if operations are in compliance with safety and environmental regulations. However, the reality is that permits for shallow water drilling are not proceeding despite the widespread efforts being made by the industry to honor the letter and spirit of new Interior regulatory standards as reflected in Notices to Leasees, or NTLs.

"Part of reason for a lack of permits may be that Interior's BOEM has been vague regarding its compliance expectations under its environmental NTL, resulting in no new permits being granted since that NTL was issued. This is true even for low risk reservoirs with known characteristics. BOEM must be clear in the guidance it offers and stick to it."

Jim Noe, Senior Vice President and General Counsel of Hercules Offshore, noted:

"To date, and despite assurances from the White House and the Interior Department, about one-third of the shallow water fleet has been idled by the application of what can only be called a de facto moratorium. Unless Interior changes course, and matches their action with their rhetoric, another third of the fleet will be idled and thousands more workers will be furloughed within the next few weeks."

(Associated Press, Wash Post, 7/13/2010, Frank Maisano)