Obama’s Drilling Moratorium Is Moratoriumed

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Almost exactly a week ago, executives from the major international oil companies stood before Congress for questioning. They defended the oil industry’s record on offshore drilling and distanced themselves from BP and its mistakes. But on one area they had to admit defeat. After Representative Edward Markey of Massachusetts showed copies of the companies’ oil spill response plan—and showed that they were virtually identical, with telephone numbers of deceased experts and plans to protect the cold-water walrus in the hot Gulf of Mexico—they had to admit that a major spill was not something they could easily control. As Exxon CEO Rex Tillerson put it:

The answer is when these things happen we are not well equipped to handle them. There will be impacts. We have never represented anything different from that. That’s why the emphasis is on prevention, because when they happen we are not equipped to deal with them.

That much has obvious over the past 70 days as BP and the government have struggled to cope with an ongoing oil spill that seems to be far larger and harder to contain than anyone ever imagined. And the threat of another spill is partially what prompted President Barack Obama to institute a six-month moratorium on deepwater drilling on May 28, while a Presidential commission examined the Horizon accident and drilling. As the ongoing investigation into the Deepwater Horizon showed evidence of equipment failures, management failures and regulatory failures, it seemed clear that a timeout would be needed on drilling. The economic pain—especially for the Gulf region—would be significant, but for once, safety had to come first.

But that argument wasn’t good enough for U.S. District Judge Martin Feldman, who in a New Orleans courtroom today overturned Obama’s drilling moratorium, granting an emergency injunction that had been requested by Hornbeck Offshore Services and supported by several similar drilling service companies. In a 22-page ruling (you can read the text here), Feldman dismisses the government’s arguments that there is a danger presented by allowing deepwater drilling without immediate and long-term safety reforms. He looks at the government’s findings on deepwater drilling safety—presented in a May 27 report by Interior Secretary Ken Salazar, who just can’t seem to catch a break—and finds them wholly insufficient to support a six-month mothballing of an industry that employs tens of thousands of people and supplies a good chunk of America’s oil and natural gas:

The Deepwater Horizon spill is an unprecedented, sad, ugly and inhuman disaster. What seems clear is that the federal government has been pressed by what happened on the Deepwater Horizon into an otherwise sweeping confirmation that all Gulf deepwater drilling activities put us all in a universal threat of irreparable harm. While the implementation of regulations and a new culture of safety are supportable by the Report and the documents presented, 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 immediate harm.

The White House has promised an immediate appeal, and Press Secretary Robert Gibbs, asked about the ruling at the end of his daily briefing, said Obama still supported the moratorium. “The president strongly believes, as the Department of Interior and the Department of Justice argued yesterday, that continuing to drill at these depths without knowing what happened is—does not make any sense,” he said. Whatever the fate of the appeal, though, the ruling is another blow to Obama’s authority on a bad day, when the White House was already busy parrying critical quotes from General Stanley McChrystal and his staff in a Rolling Stone article.

Drilling companies—and many Gulf coast politicians, who had opposed the drilling moratorium even as they fought off the spill—celebrated the ruling. They’d made the case that the moratorium would be a double blow for the Gulf , which is heavily dependent on the oil industry, turning an environmental disaster into an economic one. After the ruling, the roughnecks prepared to get back to work. “It’s the right thing for not only the industry but the country,” said Todd Hornbeck, the CEO—not surprisingly—of Hornbeck Offshore Services.

Environmentalists—several green groups had joined the government as defendants—blasted the ruling, which they say exposes the Gulf coast to the threat of another spill while Deepwater Horizon still gushes. “In light of the ongoing catastrophe spreading across the Gulf, this lawsuit to lift the federal drilling moratorium is reckless and shows a lack of respect to the people working to cleanup this mess,” said David Petit, a senior attorney with the Natural Resources Defense Council, in a statement. “Given that we don’t have those answers, to rush into drilling activities that have been shown to be loosely monitored at best would only expose the Gulf to unnecessary peril.”

It won’t be surprising in a blog called Ecocentric, but I’m siding with the greens here. Every day new evidence comes to light that demonstrates Deepwater Horizon was an accident waiting to happen—the result not just of BP’s internal problems but mechanical mistakes and a failure of regulation. And most damning, oil industry executives themselves admit that they can’t really respond to a blown well thousands of feet beneath the surface of the ocean. That much is obvious every day—and it seems nothing short of crazy to continue digging holes deep in the ocean that we can’t fix. We need time to make that right.

But Feldman rejects that argument in his ruling:

If some drilling equipment parts are flawed, is it rational to say that all are? Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavy-handed, and rather overbearing.

Yet the truth is we still know far too little about how deepwater drilling is conducted and regulated—and what we’ve discovered the since the Deepwater Horizon sunk on April 20 is not reassuring. As significant as deepwater drilling is to the economy of the Gulf coast, it’s hardly comparable to the effect of grounding all American air traffic—and it could be blunted with aid. Nor would putting a temporary hold on 33 deepwater drilling sites in the Gulf end the oil industry there—especially since there are still 3,600 oil and natural gas production platforms left in the Gulf. And while a six-month moratorium might lead some oil companies to move deepwater rigs elsewhere in the world, it’s a little hard to imagine that the international energy players—increasingly locked out of other deposits by aggressive national energy companies—will simply leave the Gulf behind for good.

Judging from Feldman’s ruling, the government might have blown its case. He points out several problems, including the fact that several of the engineering experts who peer-reviewed the Interior Department’s report on deepwater drilling latter said they were not in favor of a six-month moratorium. And Feldman wasn’t the only one to detect a hint of political motivation in the government’s moratorium. But the safety issues won’t go away—and it’s worrying those fears were simply rejected out of hand. “What does it say about our system that even the President of the United States can’t pause Big Oil’s dangerous deepwater drilling,” said Larry Schweiger, the president of the National Wildlife Federation, in a statement. “This ruling demonstrates that our entire system—from acquiescent regulators to apologetic members of Congress to a compliant judiciary—are tilted in Big Oil’s favor.” Changing that system may be a lot harder than we thought.

Update: Kate Sheppard of Mother Jones points out that Feldman—appointed by President Ronald Reagan—had up to $15,000 in stock in the drilling company Transocean as recently as 2008. Of course, as a judge in Gulf coast, Feldman is hardly alone in owning oil stocks—37 of 64 federal judges in the region have some ties to the oil sector. That’s what happens in a region that is so dominated by a single industry—it becomes impossible to strip away corporate influence.