U.S. Deepwater Drilling Ban Lifted by Federal Judge

[jiimbergin]

http://noir.bloomberg.com/apps/news?...vSv_GGgA&pos=1

June 22 (Bloomberg) -- A New Orleans federal judge lifted the six-month moratorium on deepwater drilling imposed by President Barack Obama following the largest oil spill in U.S. history. Shares of drilling services companies jumped on the news.
Obama temporarily halted all drilling in waters deeper than 500 feet on May 27 to give a presidential commission time to study improvements in the safety of offshore operations. More than a dozen Louisiana offshore service and supply companies sued U.S. regulators to lift the ban.
U.S. District Judge Martin Feldman today granted a preliminary injunction, halting the moratorium. Government lawyers told Feldman that ban was based on findings in a U.S. report following the sinking of the Deepwater Horizon rig off the Louisiana coast in April.
“The court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium,” Feldman said in his 22-page decision. “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.”
U.S. Will Appeal

Looks like the right decision to me.

jim

[oddlots]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

Tend to agree, though I found this revelation about one of BP's other platforms alarming:

http://www.cbsnews.com/stories/2010/...n6487129.shtml

Maybe it should just apply to BP.

Incidentally I came across a useful analysis of the economic fallout in David Kotok's Slickonomics series here:

http://www.cumber.com/commentary_archive.aspx

Lots of good detailed analysis here.

[Roughneck]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

I just read where Salazar is issuing a "new order to ban drilling which clearly defines the risks". These people just don't get it. The rule of law means nothing to them.

[Chomsky]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

I just read where Salazar is issuing a "new order to ban drilling which clearly defines the risks". These people just don't get it. The rule of law means nothing to them.

I'll take the other side of this coin.

The suit was not brought by the drilling industry, but by related support industries based in Louisiana that help supply the rigs. They objected to the undue financial hardship they supposedly were going to suffer due to the loss of business. The 6-month moratorium, however, only affects 33 deepwater rigs and suspends, temporarily, new projects; there are still over 3600 oil and natural gas platforms in the Gulf that are exempt from the moratorium. I.e., less than 1% of the currently producing platforms are to be shut down -- and only shut down for 6 months while safety standards for deepwater rigs are reviewed in light of the government's total abrogation of its regulatory mandate to ensure safety in the first place -- this is hardly undue financial hardship for the plaintiffs.

The only reason the judge sided with them is because the appeals court is in Louisiana. On appeal this one's going (rightly IMO) for the White House.

[Chomsky]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

Judge who nixed drilling ban has oil investments

NEW ORLEANS – The Louisiana judge who struck down the Obama administration's six-month ban on deepwater oil drilling in the Gulf of Mexico has reported extensive investments in the oil and gas industry, according to financial disclosure reports. He's also a new member of a secret national security court.

U.S. District Judge Martin Feldman, a 1983 appointee of President Ronald Reagan, reported owning less than $15,000 in stock in 2008 in Transocean Ltd., the company that owned the sunken Deepwater Horizon drilling rig.

Feldman's 2008 financial disclosure report — the most recent available — also showed investments in Ocean Energy, a Houston-based company, as well as Quicksilver Resources, Prospect Energy, Peabody Energy, Halliburton, Pengrowth Energy Trust, Atlas Energy Resources, Parker Drilling and others. Halliburton was also involved in the doomed Deepwater Horizon project.

Feldman did not respond to requests for comment and to clarify whether he still holds some or all of these investments.

He's one of many federal judges across the Gulf Coast region with money in oil and gas. Several have disqualified themselves from hearing spill-related lawsuits and others have sold their holdings so they can preside over some of the 200-plus cases.

http://news.yahoo.com/s/ap/20100623/...gulf_oil_spill

[Roughneck]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

The 6-month moratorium, however, only affects 33 deepwater rigs and suspends, temporarily, new projects; there are still over 3600 oil and natural gas platforms in the Gulf that are exempt from the moratorium. I.e., less than 1% of the currently producing platforms are to be shut down -- and only shut down for 6 months while safety standards for deepwater rigs are reviewed in light of the government's total abrogation of its regulatory mandate to ensure safety in the first place -- this is hardly undue financial hardship for the plaintiffs.

This is the comment verbatim from the administration. It reflects a lack of understanding or ignorance of the difference between oil drilling and oil production. Oil drilling is a very specialized business which utilizes unique services. While many of the companies also service production rigs, there are a lot of them who service mainly the drilling industry. Also, anyone who thinks this will only be a six month stoppage needs to understand the cost of letting one of these rigs sit idle. If this drags on they will move to Brazil or Africa and they won't be back anytime soon. So six months could turn into years. This is higly specialized equipment which is in high demand. 80% of gulf drilling now is in water over 500' deep. Also, even though the ban applies to deep water no shallow water permits,mostly gas rigs, have been issued since the ban.

[GRG55]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

The strongest rationale for shutting down the other deepwater rigs is that if there is another serious incident/blowout [no matter how unlikely] before the Macondo blowout is killed, there is insufficient capability by all parties to handle two serious incidents at the same time.

Other than that, I agree with Roughneck...the US offshore drilling capability is going to be degraded as the best equipment and most experienced personnel leave.

[mesyn191]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

Small loss.

They could quadruple the number of offshore deep water rigs and only get enough oil to supply the US for a few years, then we'd be totally tapped out and back to relying on foreign oil only more so.

They should just do massive make work programs to build up renewable energy where ever possible. It'd do more for the economy in the short term and the long run, and it'd fix that foreign energy reliance issue once and for all, or at the very least reduce it significantly.

[we_are_toast]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

It doesn't matter whether the ban makes sense or not, as long as oily birds wash up on shore, the public will choose a ban over a few thousand drilling jobs. After the next price spike in oil, the ban will be lifted, regulations will be softened, and we'll all go back to watching American Idol until something like a Fracking accident destroys the water supply to a small city.

[KGW]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

What those who brought the suit seem to overlook is the much larger damage to the region's economic base. They are a smaller percentage of the pie to the region than those whose livelihoods are being impacted. I would suspect the Oil Industry to be quite "supportive" of such suits.

[Roughneck]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

So what is more important to the energy security of the US oil sector jobs in LA or tourism in FLA? If all the end of the oil world alarmists are right no one will be able to afford to travel to the beaches anyway,right;)

[VIT]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

I started to believe everything related to oil industry is emotional rather than rationale in US. Still not sure about the roots, maybe somebody could put the light on this and the history of why.

What I see is both parties (pro-oil and ant-oil) spins in their own direction:

Pro-oil always talk about jobs and US dependence from foreign oil - what a bshit, but Anti- is even worse: US independence with alternative or do it in some "other backyard" or some other misconceptions. Both of these stinks and makes it difficult to do a comprehensive strategy accepting some facts you probably do not like:

- for oil that you have to work on alternatives (as society) and it is not oil industry discretion to direct the legislation.
- for anti-s is to understand the implications of the decisions: both short and long term, take the scientific approach to the problem without any biases.

It is so simple but so far away. Does it absolutely require some shocks like this oil spill or price shocks and possible instabilities to come up with understanding and work plan for policy makers at least for 10+ years.

[chr5648]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

I started to believe everything related to oil industry is emotional rather than rationale in US.

This benefits the oil industry because real solutions are never provided just pie in the sky thinking, utopian aspirations, and 'hope' which has no scientific proof of working. The so called environmentalists don't pose a threat at all, they may create some PR trouble but, none of their solutions are credible and if anything contribute to the circular pattern of blame and no change in the whole system.

[nathanhulick]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

It doesn't matter whether the ban makes sense or not, as long as oily birds wash up on shore, the public will choose a ban over a few thousand drilling jobs. After the next price spike in oil, the ban will be lifted, regulations will be softened, and we'll all go back to watching American Idol until something like a Fracking accident destroys the water supply to a small city.

Fracking accident? Considering that the process of fracking involves injecting millions of gallons of toxic chemicals into the earth, and recovering only about half of them, I dont think an accident is required.

[Starving Steve]

Re: U.S. Deepwater Drilling Ban Lifted by Federal Judge

Fracking accident? Considering that the process of fracking involves injecting millions of gallons of toxic chemicals into the earth, and recovering only about half of them, I dont think an accident is required.

You Sierra Club and Greenpeace members are now out to destroy the oil industry, just as you destroyed the atomic energy industry in 1979, and just as you destroyed the hydro-electric energy industry.

Why are you so intent on destroying our economy and freedom in the Western World?

You will hear from people like me, people who have starved for decades because of the radical environmentalist agenda, and you will hear from us in public meetings and at the polls during elections. Just wait! "I'll be back," with my entire neighbourhood.

Here in Victoria, the NDP so-called, "opposition" caucus in the BC Legislature refuses to even speak with me by telephone on the subject of severing their ties with the greens....The CRD would not even take my calls this past spring. Then, on June 9th at the CRD offices, I led my entire neighbourhood in revolt against outrageous water rates and their anti-people and anti-growth, radical green agenda.

We are not finished yet! We've only just begun.