Court upholds stay on drilling moratorium

NEW ORLEANS – A federal appeals court on Thursday rejected the Obama administration’s request to keep a six-month moratorium on deep-water oil drilling in place while it mounts a legal defense of the ban.

The decision, issued shortly after the three-judge panel of the 5th U.S. Circuit Court of Appeals heard arguments in a crowded New Orleans courtroom, was a second blow to one of the administration’s key responses to the April 20 Deepwater Horizon oil rig explosion and massive spill.

Attorneys for Interior Secretary Ken Salazar had urged the appeals court panel to leave the ban in effect while the administration appeals the lower court’s rejection of the moratorium. The ban had halted exploratory drilling at 33 well sites in waters deeper than 500 feet.

But the panel, in a 2-1 decision, said the administration failed to show it would suffer “irreparable harm” if work resumed on the approved well sites in the Gulf of Mexico.

Eleven people were killed when the Deepwater Horizon rig exploded and collapsed, unleashing a torrent of oil that has flowed at as much as 60,000 barrels a day for more than two months, coating wildlife and fragile coastal areas in three states.

One judge dissented, saying he would have granted the government’s request to stay a lower court’s order to end the ban. The panel ruled unanimously, however, to hold an expedited hearing, set for late August, on the merits of the government’s argument for a drilling halt.

U.S. District Judge Martin L.C. Feldman struck down the government moratorium on deep-water drilling on June 22, at the urging of drilling support companies that argued the halt threatened economic harm to the region. The companies, led by Hornbeck Offshore Services, argued Thursday that Feldman’s ruling was correct in deeming the administration action excessive and unsupported by facts.

Catherine Wannamaker, a lawyer with the Southern Environmental Law Center appearing on the government’s side, said her agency would again petition the court for a stay if drilling commenced.

“We were all surprised it came out so quickly and obviously disappointed that they didn’t grant us the stay,” she said.