Gulf oil spill: Government argues to reinstate drilling moratorium

The Obama administration will argue its case on deepwater drilling Thursday. The government issued the moratorium in the wake of the Gulf oil spill, but a judge blocked it last month.

By , Staff writer

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    As the sun sets cleanup crews continue to work to remove tar balls and patties from the Deepwater Horizon oil spill that washed ashore in Long Beach, Miss., Wednesday, July 7 2010.
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The Obama administration is set to argue Thursday before a federal appeals court that its six-month moratorium on deepwater drilling was the right thing to do – and still is.

On June 22, US District Judge Martin Feldman ruled that the moratorium, which halted drilling at 33 deepwater sites in the Gulf of Mexico in the wake of the Gulf oil spill, was overly broad and did not rely on "the facts.” But the administration is ready to fight both arguments in its bid to win a temporary suspension of Judge Feldman's order, pending a full appeal of the injunction itself.

In a Tuesday filing with the Fifth Circuit Court of Appeals, the administration took a muscular stance, basically thumbing its nose at the injunction last month, legal experts and observers of the case say.

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Indeed, while many legal analysts had speculated that the Obama administration might in advance of the hearing quickly recast and narrow the scope of its moratorium to respond to the judge's ruling, it appears to have hardened its legal stance instead.

"The stakes are even higher now that it is hurricane season," the US Department of Justice argued in its Tuesday filing. "The suspension orders give [the Department of the] Interior time to further implement 22 already identified new safety measures and to develop others."

The three-judge appeals panel will also probably hear from the government’s Tuesday filing that "harm from a potential second incident is inestimable" and that "most cleanup resources are already devoted to the current spill."

"Their central argument is that this is our business and we're going about it in reasonable and diligent fashion and making progress," says Elgie Holstein, oil-spill response coordinator for the Environmental Defense Fund in Washington. "They will argue that long ago, Congress gave the Department of Interior the responsibility for regulating oil and gas development – and the courts should stay out of it."

But other legal analysts say the government’s case has some clear weaknesses.

"They're not actually addressing the argument that was successful with Judge Feldman – the argument that just because one rig blew doesn't make other rigs unsafe," says Jeffrey Rachlinski, a professor of environmental law at Cornell University Law School in Ithaca, N.Y. "Instead, they are arguing things like the Gulf of Mexico can't tolerate another deepwater spill. But the point is that they have to show there's a risk of another spill ... and they're not showing there's a risk of a second bad spill."

Such issues will probably emerge full blown since the panel of judges in Thursday's hearing will not simply allow the government and the plaintiff to argue the outlines of what they've already put in their filings, says Howard E. Shapiro, a legal expert with Van Ness Feldman, a Washington law firm.

"These judges will have questions about the balancing of the risks – questions like: Was there an assessment by the government of the probability of risk of another blowout? They will want to balance this against the significant economic damages claimed by the plaintiffs."

Much hangs on the federal government’s 30-day review of safety measures in the Gulf. It's not apparent that that review, which was released in May and identified numerous safety issues, conducted a risk assessment for a future spill.

In issuing his preliminary injunction, Feldman asked: "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 heavy handed, and rather overbearing."

Such questions are likely to come up Thursday, legal experts say. But the court will also be considering something else: the consequences if it allows the injunction to proceed – and something bad happens.

"The judges will be probing to see if Judge Feldman's conclusion was justified and try to make a judgment," Mr. Shapiro says. "But in the back of their minds, if they are wrong and if something like a hurricane occurs before they can fully assess the injunction, of course they know they'll be blamed for it."

If the government were to lose Thursday’s motion, it still has the option to quickly recast the moratorium in a narrower way – for instance, having the moratorium apply to 1,000-foot or deeper wells rather than those 500 feet or deeper.

"If they get success on this, they won't have to remake the moratorium," Professor Rachlinski says. "But if they don’t win, they will reissue the moratorium and provide a different rationale for it. They might argue that all the rigs are using basically the same blowout-preventer technology – and suggest that they are all dangerous."

If that happens, most deepwater drilling will still be shut down. For that reason, oil drillers should not be too hopeful of shortening their wait. A six-month moratorium "remains a practical minimum expectation," writes Kevin Book, an energy analyst with ClearView Energy Partners in Washington.

A decision from the panel of judges is expected within a week.

IN PICTURES: The Gulf oil spill's impact on nature

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