Judge Blocks Offshore Drilling Moratorium

(CBS/AP)  Last Updated 5:01 p.m. ET

A judge has blocked the offshore drilling moratorium imposed by the Obama administration after the devastating Gulf of Mexico oil spill.

The six-month moratorium halted the approval of any new permits for deepwater drilling, and suspended drilling at 33 existing exploratory wells in the Gulf of Mexico and in the Pacific.

U.S. District Judge Martin Feldman heard two hours of arguments Monday when companies that service oil rigs asked that the moratorium be lifted.

Calling the Interior Department's decision an "invalid" one, Feldman wrote that a blanket suspension of all offshore drilling in depths of more than 500 feet "simply cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country."

White House Press Secretary Robert Gibbs said the administration would immediately appeal the decision to the 5th Circuit.

Hornbeck v. Salazar (pdf)
Special Section: Disaster in the Gulf

Asked about the ruling at the end of his briefing Tuesday, Gibbs said, "The president strongly believes ... that continuing to drill at these depths without knowing what happened does not make any sense, and potentially puts the safety of those on the rigs and in the Gulf at risk."

The April 20 disaster on the Deepwater Horizon killed 11 workers and blew out a well that has gushed anywhere from 68 million to 126 millions of oil into the Gulf.

Feldman's financial disclosure report for 2008, the most recent available, shows holdings in at least eight petroleum companies or companies that invest in them, including Transocean Ltd., which owned the Deepwater Horizon. The report shows that most of his holdings were valued at less than $15,000, though it did not provide specific amounts.

It's not clear whether Feldman still has all of the energy industry stock listed in the report. Recent court filings indicate he may no longer have Transocean shares. He did not own any shares in big companies such as BP PLC, which was leasing the rig that exploded, or ExxonMobil.

Feldman did not immediately respond to a request for comment about his current holdings.

Josh Reichert, managing director of the Pew Environment Group, said his ruling should be rescinded if he still has investments in companies that could benefit from Tuesday's ruling.

"If Judge Feldman has any investments in oil and gas operators in the Gulf, it represents a flagrant conflict of interest," he said. "It is possible that he has sold off those assets. We just don't know."

Feldman's ruling prohibits federal officials from enforcing the moratorium until a trial is held. He did not set a date.

Hornbeck Offshore Services, a Covington, La.-based company, had sued
for declaratory and injunctive relief, and was later joined by other plaintiffs who asked for a preliminary injunction prohibiting the government from enforcing the drilling moratorium.

Hornbeck CEO Todd Hornbeck said after the ruling that he is looking forward to getting back to work.

"It's the right thing for not only the industry but the country," he said.

Tim Kerner, the mayor of Lafitte, La., cheered Feldman's ruling.

"I love it. I think it's great for the jobs here and the people who depend on them," said Kerner, whose constituents make their living primarily from commercial fishing or oil.

Catherine Wannamaker, a lawyer for environmental groups that intervened in the case and supported the moratorium, called the ruling "a step in the wrong direction."

"We think it overlooks the ongoing harm in the Gulf, the devastation it has had on people's lives," she said. "The harm at issue with the Deepwater Horizon spill is bigger than just the Louisiana economy. It affects all of the Gulf."



Lawmakers came down on both sides of the ruling.

Republican Sen. David Vitter of Louisiana applauded the decision, saying it recognizes the president's powers aren't unlimited. Vitter also says the moratorium is "wreaking havoc on jobs" in his state.

Massachusetts Democrat Edward Markey, who chairs a House energy independence committee, called the ruling "another bad decision in a disaster riddled with bad decisions by the oil industry."

Earlier in the day, executives at a major oil conference in London warned the moratorium would cripple world energy supplies. Steven Newman, president and CEO of Transocean, called it an unnecessary overreaction.

"There are things the administration could implement today that would allow the industry to go back to work tomorrow without an arbitrary six-month time limit," Newman told reporters on the sidelines of the conference.

BP CEO Tony Hayward skipped the event after coming under fire for attending a yacht race in England on Saturday rather than dealing with the spill.

Shares of BP, which owns 65 percent of the blown-out well, dropped 81 cents, or 2.7 percent, to $29.52, near a 14-year-old low for the shares in U.S. trading. Shares of other companies associated with the spill remained low despite Feldman's ruling.

On the plaintiffs' complaint that the moratorium would have a devastating effect on their oil service industry business, Feldman writes, "…[A]n estimated 150,000 jobs are directly related to offshore operations. The government admits that the industry provides relatively high paying jobs in drilling and production activities. Oil and gas production is quite simply elemental to Gulf communities."

The Court, Feldman wrote, was persuaded that "the public interest weighs in favor of granting a preliminary injunction," and found that the palintiffs would likely succeed in showing that the agency's decision was "arbitrary and capricious."

In his 22-page decision, Judge Feldman excoriates the Obama administration for making what is labeled an "arbitrary and capricious" decision that "does not seem to be fact-specific," and even labels statements made to justify the moratorium as "factually inaccurate."

The judge even indicates that he sees a "pattern" to the administration's decision-making and reasoning, leading to the shutdown on deepwater exploration.

The federal moratorium had suspended all pending, current or approved drilling operations of new deepwater wells (depths greater than 500 feet) in the Gulf of Mexico and in the Pacific for six months.

Feldman writes that Interior Secretary Ken Salazar's decision was based on a finding "that new deepwater wells pose an unacceptable risk of serious and irreparable harm to life and property and a finding that the installation of additional safety or environmental protection equipment is necessary to prevent injury or loss of life and damage to property and the environment."

Also suggested as contributing to the Secretary's decision was concern that government resources already deployed to deal with the BP spill were stretched too thin to deal with another hypothetical blowout.

The findings were issued in a report released May 27 by the Interior Department.

"[T]he Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium," Feldman writes. "The Report patently lacks any analysis of the asserted fear of threat of irreparable injury or safety hazards posed by the thirty-three permitted rigs also reached by the moratorium. It is incident specific and driven: Deepwater Horizon and BP only. None others."

He also questioned the government's rationale to in effect block the use of equipment, such as shear rams, because of the failures at Deepwater Horizon.

"If some drilling equipment parts are flawed, is it rational to say all are? Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavyhanded, and rather overbearing," Feldman writes.

"The Deepwater Horizon oil spill is an unprecedented, sad, ugly and inhuman disaster. What seems clear is that the federal government has been pressed by what happened on the Deepwater Horizon into an otherwise sweeping confirmation that all Gulf deepwater drilling activities put us all in a universal threat of irreparable harm. While the implementation of regulations and a new culture of safety are supportable by the Report and the documents presented, the blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.

"On the record now before the Court, the defendants have failed to cogently reflect the decision to issue a blanket, generic, indeed punitive, moratorium with the facts developed during the thirty-day review."

[jbar116]

This judge is a very poor judge of anything especially if his personal interests come first; as indicated by his lack of integrity in this instance. What other follies of justice has he committed? We may never know due to the "Good-Ole-Boy" system in place within our government. At the very least all of his judgments should come under scrutiny for any wrong doing and he should be fired for not having himself recused from this case. Let's see what Obama will do; most likely amnesty for a crooked judge.

[alphaa10000]

CBS/AP report, "Feldman's financial disclosure report for 2008, the most recent available, shows holdings in at least eight petroleum companies or companies that invest in them, including Transocean Ltd., which owned the Deepwater Horizon."
---

The phrase "travesty of justice" applies to Feldman's blatant conflict of interest.

Feldman should have recused himself immediately, but neither the term nor the concept behind it came to mind.

The judge was a GOP Reagan appointee but his personal portfolio of legal understandings dates from the 19th century.

Accordingly, Feldman gives Americans a flashback to the Gilded Age, in which the robber barons of industry could do no wrong. The era is a logical consequence of the GOP thinking sometimes called "DEregulation".

This is little more than political prostitution to the highest dollar, in utter contempt for the American public interest.

[irreverent1-2009]

We shouldn't even be trying to mop up this oil. It should be torched wherever it is. Burn the beaches, swamps and open seas!. Capitalism at it's finest. We will save billions in the process.

[rightbehind]

Judge, There is an oil leak in the Gulf no one has been able to stop. The slick has grown to the size of the state of Texas. It's okay, I've given the order to light the last boilers. We're going to be in the headlines tomorrow.

[Lifeson2112]

by USA_is_back June 22, 2010 5:42 PM EDT
Ok Lifeson. Good. You're beginning to think on your own now. So you DO admit the Constitution through the amendment process is "progressive" - it changes with the times? You're right not all progressive ideas are good, but on the other hand not all Conservative ideas are good either. You have to admit, both sides have good and bad ideas. It's not "All things Conservative are good and all things liberal are bad" as the talking heads on Fox would have you believe, is it? ---------------------------------------------



I'll agree with you that both sides have good and bad ideas. And of course the Constitution can change. But our founders made that process very difficult for a reason. It shouldn't be tinkered with on a whim. What I've been referring to is what is known as the progressive era of the early 20th century and their big government ideals. Certain aspects of it work out alright. Most didn't. Take the national parks. Not a bad idea although I'm not sure what part of the Constitution they think gave them that power. Also take Social Security. Its a feel-good idea that was doomed from the start.

[curse914]

Yes, unless Lifeson is a descendant of one of those Robber Barons he benefited from liberal movements outside of the all seminal "liberal" Constitution. There were a great many conservatives in the UK who thought that the King was appointed by God and America's Constitution spat in the face of such "truths."

[TheTrue2]

@CBSNews...judge ruling shows clearly the power and influence of the oil industry in Louisiana. Judge rule profit over life in the decision to lift the temporary stoppage of drilling. The judge failed to recognize the big picture in the decision. Domestic oil represents only 2% of our national oil consumption and stoppage of drilling does not affect our national interest. Especially since presently there is an abundance of oil in the "pipe line". The local employment will only suffer a temporary setback, but, in return they would gain a safer industry for the long run that will reduce the risk to other industries created by spills.

[gerryrigger]

The main cause of this disaster was complacency that led to safety measures being neglected and bypassed in the name of quicker profits. The moratorium would not have been necessary if the immediate inspection of equipment and the monitoring of practices and procedures were summarily enforced. Also a requirement to drill a relief well alongside an exploratory well in deep water henceforth should have been mandated as soon as we learned how long it can take to drill a relief well.

[BigMykul]

by superdem1 June 22, 2010 3:10 PM EDT
All you southerners with your no-tax, no-regulation easy-livin' lifestyles need to just shut up when the disasters hit. Don't even ask for help from the government you hate so much. The rest of us are sick of cleaning up your messes.

Well, I don't know about all SOUTHERNERS, but I have paid taxes on my property, earnings, utilities and purchases (including tobacco, achohol, gasoline...etc) since the mid 1970's.

What messes have you cleaned up? Do you have a list? Did you get paid or tax credit for your labor and service?

As I told the guy at the store today, when he asked if the government helped to pay for my mobility scooter, (kinda hard to work when you get injured on the job and guess what, no workers comp, insurance or anything like that. But hey, I paid taxes on the earnings from that job) No, I don't ask the government to give me anything!

As for regulation, there are two sides to every/any story. Regulation is great when properly used and enforced, but can be useless if not. Also, some regulation can become overly redundant. As for the current situation, yes it needed proper regulation and enforcement. Unfortunately it didn't happen.

As for the cleanup, the expense is on BP's pocketbook rightfully where it belongs. It is their mess and they need to clean it up. However, to remove the chance for employment, especially in such a fragile economic era as we have now, for the persons who work on these other rigs is ludicris(sp). The amount of income lost, in an area already impacted so much following a natural disaster(Katrina), and man-made disasters (fragile economy, housing, mortgages, cost-of-living increases... oil rig...etc) is beyond rational thought. Yes, get inspectors on the rigs, get everything checked/fixed. That should not require half a year. Require that every existing/new well be checked out by un-corrupable inspectors. Maybe one month, it shouldn't take more than that.

As for my stake in this. I am from the South. I was born here, and lived here most of my life. I prefer the more-relaxed lifestyle. I like the fact that I don't have to be worried about getting attacked if I walk a block or two to a store. I don't have to spend a small fortune for a tiny little room/apartment on the 25th floor with a broken elevator. I have lived in the North before.

[bobnjersey]

[As I told the guy at the store today, when he asked if the government helped to pay for my mobility scooter,]

so ... did the govt. 'pay for' or 'subsidize' the scooter? or are you just viewing this as a return of 'my tax dollars'?

[p_syrus]

Judge's verdict is likely to be overturned. It is the Federal Government's role to determine offshore drilling policy. In light of the recent disaster, a temporary moratorium is quite a reasonable restriction to have imposed. Long term policy shifts require a greater need for public participation, but ad hoc measures put in place to address immediate problems do not warrant such a scrupulously inclusive approach to public policy making.

This judge is clearly a little too tightly tied to the offshore oil industry and it has affected his judgement accordingly.

So where the shrill cries from conservatives concerning the perils of "judicial activism"?

[bobnjersey]

[So where the shrill cries from conservatives concerning the perils of "judicial activism"?]

that's their other face ... the one they can't see right now.

[smoknmirrors]

Judge Feldman's logic is that only one manned shuttle exploded in the stratosphere above the launch pad, so BEFORE finding out why that happened, BEFORE making corrective safety adjustments, BEFORE knowing who was responsible for the decisions that led to the explosion, BEFORE implementing new chain of command decision making, BEFORE assuring redundancy and BEFORE bad weather sets in, let's hurry and get another manned shuttle on the pad and up in the air. There are jobs at stake here.

[Lifeson2112]

There is a difference. There were only four shuttles. There are literally dozens of drilling platforms off our coast. The platforms have run for decades without something like this happening. Their record is pretty good. The odds of this same accident occurring right away are infintesimal.

[bobnjersey]

[There is a difference. There were only four shuttles. There are literally dozens of drilling platforms off our coast. The platforms have run for decades without something like this happening. Their record is pretty good. The odds of this same accident occurring right away are infintesimal.]

is the difference signifigant from a probability perspective? that's all that matters in this discussion ... not that one has four and the other has twenty.

the odds of it happening again (right away) are infintesimal? how do you know this? do you have the calculations to prove it? how could you even begin to assess this if you don't know what caused the first one?

the wtc building stood since the '70s ... until they fell after being hit by planes. up to the day before it happened ... you could say ... 'their record is pretty good'.