Offshore oil drilling moratorium reopened

Obama administrators filed to restore the moratorium on deepwater oil drilling on June 6 with the U.S. Court of Appeals for the Fifth Circuit.

Following the explosion and subsequent spill on the Deepwater Horizon on April 20, the Obama administration filed for a six month moratorium on deepwater drilling in dept of over 500 feet. That moratorium was eventually lifted by a U.S. District judge in New Orleans on June 22 when he ruled it was having a significant economic impact and the federal government had arbitrarily concluded that because one oil rig had failed, others were bound to follow suit.

In the latest filing to restore the moratorium, Justice Department officials have cited the catastrophic impact of the Deepwater Horizon spill and pointed to the industries inability to contain it. "Interior had to take immediate action to minimize the risk of another spill, especially while efforts to contain and clean up this one are ongoing," the motion says. "The stakes are even higher now that it is hurricane season."

Further, the filing concludes there is "a threat of serious or irreparable harm to the marine or coastal or human environment," and that threat should not be weighed against any possible economic harm the moratorium may cause.

Attorneys for the government and Hornbeck Offshore Services LLC—an offshore oil-services provider that challenged the moratorium—are scheduled to square off on Thursday before a panel of judges assigned to the Fifth Circuit.

Stakes in the filing were raised this weekend as tar balls washed up on Texas shore, the last Gulf state to be affected by the spill.

Crude oil futures broke precipitously yesterday afternoon about $2 but has since recovered and is more than $2 higher today.

· Revived Push for Drilling Ban

· Judge blocks Gulf offshore drilling moratorium

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome