- The Washington Times - Monday, July 12, 2010

Saying oil companies still are at risk of another catastrophic spill, the Obama administration announced a new moratorium Monday on drilling in the outer continental shelf, three weeks after a judge rejected the first ban.

The new ban covers most of the same drilling as the old moratorium, and lawmakers from states bordering the Gulf of Mexico said it will hurt jobs and leave already sputtering economies in even worse shape.

But Interior Secretary Ken Salazar, who announced the ban Monday, said deep-water drilling must be suspended until investigators can determine the cause of the April 20 explosion that led to millions of barrels of oil being released into the Gulf.

“I remain open to modifying the new deep-water-drilling suspensions based on new information,” Mr. Salazar said, “but industry must raise the bar on its practices and answer fundamental questions about deep-water safety, blowout prevention and containment, and oil spill response.”

Mr. Salazar said the moratorium will end by Nov. 30.

Trying to answer the judge’s objections, the government’s new ban applies to all floating drilling rigs. In practice, it amounts to about the same prohibition as the previous ban on drilling at depths greater than 500 feet, because floating rigs are generally used at those deeper depths.

Gulf state lawmakers said the new moratorium is still “arbitrary and capricious” — the same criticism that led a judge to reject the initial ban.

“There’s no logic behind what they’re doing. It seems to be a knee-jerk response,” said Rep. Bill Cassidy, Louisiana Republican. “It doesn’t seem rooted in what the scientists told us to do.”

He said the ban is part of the administration’s “uncertainty campaign” to make it difficult for companies to plan on any offshore drilling. He said companies will be hard-pressed to wait out the moratorium — when it costs as much as $500,000 for every day a rig is idle in the Gulf — while they could be drilling off the coasts of other countries.

“Companies still are not drilling because they were quite aware that there was going to be some additional machination to limit their ability to drill,” Mr. Cassidy said. “These guys want certainty, and they’re not going to go out and spend a couple million dollars setting up shop and then millions more taking it down.”

For now, oil is still spilling into the Gulf as a result of the April explosion of the Deepwater Horizon drilling rig, which killed 11 people. In May, the Obama administration announced its first drilling moratorium, which banned all drilling on the outer continental shelf in depths of more than 500 feet.

A federal district judge blocked the administration’s first moratorium last month in a harshly worded decision that said Mr. Salazar failed to show any scientific basis for the blanket drilling ban.

Mr. Salazar appealed and asked for the ban to remain in place while the case is being heard, but an appeals court rejected that request last week.

The Justice Department said the new ban supersedes the original one, and it will ask the district and appeals courts to lift their rulings.

Still, the new moratorium will have to overcome some of the same objections that led district Judge Martin L.C. Feldman to block the original ban.

Story Continues →