2010 U.S. Deepwater Drilling Moratorium

On May 30, 2010, in response to the Deepwater Horizon Oil Spill which occurred in the Gulf of Mexico, U.S. Secretary of the Interior Ken Salazar, issued a moratorium on all deepwater offshore drilling on the Outer Continental Shelf for a period of six months.

According to Secretary Salazar:

The six month moratorium on deepwater drilling will provide time to implement new safety requirements and to allow the Presidential Commission to complete its work... Deepwater production from the Gulf of Mexico will continue subject to close oversight and safety requirements, but deepwater drilling operations must safely come to a halt. With the BP oil spill still growing in the Gulf, and investigations and reviews still underway, a six month pause in drilling is needed, appropriate, and prudent.

The moratorium was to impact 33 deepwater drilling sites, less than 1% of the 3,600 oil and natural gas production platforms in the Gulf of Mexico. On May 27, 2010, the DOI issued a press release which noted:

Secretary Salazar is ordering a moratorium on drilling of new deepwater wells until the Presidential Commission investigating the BP oil spill has completed its six-month review. In addition, permitted wells currently being drilled in the deepwater (not counting the emergency relief wells being drilled) in the Gulf of Mexico will be required to halt drilling at the first safe stopping point, and then take steps to secure the well.

The Obama White House assembled a panel to advise his administration on how to address offshore drilling in the wake of the spill. Salazar's May 27 report incorrectly portrayed their agreement with the blanket six month ban. The panel responded thus:

We broadly agree with the detailed recommendations in the report and compliment the Department of Interior for its efforts. However, we do not agree with the six month blanket moratorium on floating drilling. A moratorium was added after the final review and was never agreed to by the contributors.

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We understand the need to undertake the limited moratorium and actions described in the draft report to assure the

public that something tangible is being done. A blanket moratorium is not the answer. It will not measurably reduce risk further and it will have a

lasting impact on the nation’s economy which may be greater than that of the oil spill.

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A blanket moratorium will have the indirect effect of harming thousands of workers and further impact state and local economies suffering from the spill. We would in effect be punishing a large swath of people who were and are acting responsibly and are providing a product the nation demands. A blanket moratorium does not address the specific causes of this tragedy. We do not believe punishing the innocent is the right thing to do. We encourage the Secretary of the Interior to overcome emotion with logic and to define what he means by a "blanket moratorium" in such a way as to be consistent with the body of the report and the interests of the nation.

Louisiana officials also expressed concern that the moratorium would further harm the economies of coastal communities. The oil industry employs about 58,000 Louisiana residents and has created another 260,000 oil-related jobs, accounting for about 17 percent of all Louisiana jobs.

Litigation

Main article: Hornbeck Offshore Services LLC v. Salazar

Soon after, Hornbeck Offshore Services, a company with financial interests in deepwater drilling, filed suit (Hornbeck Offshore Services LLC v. Salazar) in U.S. District Court seeking an injunction to bar enforcement. Judge Martin Feldman of the U.S. District Court in the Eastern District of Louisiana issued a decision for Hornbeck on Tuesday, June 22, 2010, granting a preliminary injunction, barring enforcement of the order. It has been observed that Judge Feldman, a Reagan appointee, may have a conflict of interest in this matter, as he may hold several petroleum industry securities, as indicated by his 2008 Ethics in Government Act Financial Disclosure Report. Most notable are his holdings in Transocean, the owner of the Deepwater Horizon rig.

The White House has indicated that they will immediately appeal the injunction. Salazar has indicated that the Department of the Interior will also "issue a new order in the coming days that eliminates any doubt that a moratorium is needed, appropriate, and within our authorities."

References

• Initial Department of the Interior press release
• Department of the Interior press release on the revised moratorium