New Oil Industry Suit Challenges Obama's Latest Effort to Pause Offshore Oil Drilling

Texas-based deepwater drilling contractor has filed a lawsuit in federal district court, seeking to block the Obama administration’s latest effort to temporarily halt new offshore drilling operations while the Department of the Interior investigates safety and technology concerns in light of the April 20 explosion of BP’s Deepwater Horizon oil rig. Ensco Offshore argues in their July 20 suit that the drilling suspension issued by the Interior is “substantially the same” as an earlier moratorium that was struck down in federal district court.

The administration originally issued a moratorium on deepwater drilling on May 28 that prohibited certain drilling operations from beginning work until November 30. However, this moratorium was struck down when a federal district court ruled in favor of a coalition of oil industry representatives, including Ensco, holding that the administration had not made sufficient findings that the banned drilling operations posed a threat of irreparable harm. The Fifth Circuit Court of Appeals then denied the administration’s motion to temporarily reinstate the moratorium pending the appeal. Read more.

Interior Secretary Ken Salazar issued a new drilling suspension on July 12 to address many of the concerns that prompted the district court to grant the injunction against the May 28 moratorium. While the suspension still prohibits many offshore drilling operations until November 30, it is based on new findings that some operations pose a substantial risk of irreparable harm due to safety concerns, insufficient blowout containment resources, and the strain on cleanup capabilities caused by the ongoing BP disaster. Unlike the May 28 moratorium, the suspension largely focuses on drilling technology, rather than water depth.

Ensco’s July 20 suit argues that the administration’s revised ban on offshore drilling is a “thinly-veiled and impermissible attempt” to comply with the district court’s original order. The suit alleges that the new suspension creates “a state of uncertainty and confusion with resulting dire consequences upon the domestic offshore drilling industry in the Gulf of Mexico.” Ensco filed its suit before Judge Martin Feldman, the district court judge who struck down the first moratorium.

Feldman will also consider the administration’s motion to dismiss the original case in light of the revised drilling ban, which the administration claims supersedes the May 28 moratorium and renders the original case moot. Oil industry representatives claim that Feldman’s order should stay in place because the moratoria are substantially the same. Feldman recently issued an order declining to recuse himself from the proceedings, despite having a significant financial interest in the success of the oil industry’s case. Feldman has not commented or issued an order in either case, but his past rulings and financial holdings indicate that he may be more sympathetic to the oil industry.

On the same day that Ensco filed its suit, Salazar and two former Interior secretaries testified before a House joint committee hearing to discuss the BP oil disaster. Salazar defended the administration’s decision to continue fighting for the drilling ban, saying that he believes “it would be irresponsible to take our hand off the pause button given the current circumstance.” If Feldman again strikes down the drilling ban, it is likely that the administration will appeal to the Fifth Circuit.

 

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