Judge rules Obama deepwater drilling ban “arbitrary and capricious”

Yesterday, Judge Martin Feldman of the Eastern Louisiana District Court lifted the Obama administration’s six-month moratorium on all oil and gas drilling in the Gulf of Mexico in waters over 500 feet in depth.

Feldman held that the moratorium was ”arbitrary and capricious” and would do “irreparable harm” to businesses that own, operate, and service vessels used to support offshore drilling — an industry critical to the region’s economy.

Department of Interior Secretary Ken Salazar imposed the moratorium on May 28 in response to the BP Deepwater Horizon blowout and oil spill. Judge Feldman found the moratorium to be “arbitrary and capricious” on several grounds.

First, it was based on “misrepresentation.” In a Report issued the day before imposing the moratorium, Salazar claimed his policy had been “peer-reviewed by seven experts identified by the National Academy of Engineering.” Not so, says Feldman:

As the plaintiffs, and the experts themselves, pointed observe, this statement was misleading. The experts charge it was a “misrepresentation.” It was factually incorrect. Although the experts agreed with the safety recommendations contained in the body of the main Report, five of the National Academy experts and three of the other experts have publicly stated that they “do not agree with the six month blanket moratorium” on floating drilling. They envisioned a more limited kind of moratorium, but a blanket moratorium was added after their final review, they complain, and was never agreed to by them.

Second, the agency’s decision is not supported by the evidence on which it was ostensibly based. The Report notes that “the risks associated with operating in water depths of 1,000 feet are significantly more complex than in shallow water,”  yet the moratorium would apply to all floating rigs – i.e. all rigs operating at depths greater than 500 feet. The agency makes no effort to explain why it set the cutoff at 500 feet rather than 1000 feet.

Third, “There is no suggestion that the Secretary considered any alternatives: for example, an individualized suspension of activities on target rigs until they reached compliance with the new federal regulations said to be recommended for immediate implementation.”

Fourth, the agency provided no “analysis of the asserted” hazards posed by the 33 deepwater rigs already permitted and operating in the Gulf. Rather, Interior “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.” This is like assuming that all oil tankers are like the Exxon Valdez. “That sort of thinking seems heavy-handed, and rather overbearing.”

Feldman’s ruling is unlikely to go unchallenged. According to Greenwire, David Guest, an attorney with EarthJustice who represented environmental groups in the case, opined that, “the Department of Justice will file an immediate motion for a stay and seek expedited review in the 5th Circuit Court of Appeals.”