Federal Judge Blocks Obama's Offshore Drilling Moratorium in Gulf of Mexico

In a Tuesday, June 8, 2010 photo, a deepwater drilling rig operates near the site of the Deepwater Horizon disaster in the Gulf of Mexico. (AP)

In a victory for drilling proponents, a federal judge struck down President Obama's six-month moratorium on deepwater oil drilling in the Gulf of Mexico on Tuesday, saying the administration rashly concluded that because one rig failed, the others are in immediate danger, too.

The White House promised an immediate appeal. White House spokesman Robert Gibbs said the president believes strongly that drilling at such depths does not make sense and puts the safety of workers "at a danger that the president does not believe we can afford."

The Interior Department had halted approval of any new permits for deepwater drilling and suspended drilling of 33 exploratory wells in the Gulf.

Several companies that ferry people and supplies and provide other services to offshore drilling rigs asked U.S. District Judge Martin Feldman in New Orleans to overturn the moratorium.

They argued it was arbitrarily imposed after the April 20 explosion on the Deepwater Horizon drilling rig that killed 11 workers and blew out the well 5,000 feet underwater. It has spewed anywhere from 67 million to 127 million gallons of oil into the Gulf.

Feldman sided with the companies, saying in his ruling the Interior Department assumed that because one rig failed, all companies and rigs doing deepwater drilling pose an imminent danger.

"The Deepwater Horizon oil spill is an unprecedented, sad, ugly and inhuman disaster," he wrote. "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."

His ruling prohibits federal officials from enforcing the moratorium until a trial is held. He did not set a trial date.

The Interior Department said it needed time to study the risks of deepwater drilling. But the lawsuit filed by Hornbeck Offshore Services of Covington, La., claimed there was no proof the other operations posed a threat.

Company CEO Todd Hornbeck said after the ruling that he is looking forward to getting back to work.

"It's the right thing for not only the industry but the country," he said.

Earlier in the day, executives at a major oil conference in London warned that the moratorium would cripple world energy supplies. Steven Newman, president and CEO of Transocean Ltd., owner of the rig that exploded, called it an unnecessary overreaction. BP PLC was leasing the rig.

"There are things the administration could implement today that would allow the industry to go back to work tomorrow without an arbitrary six-month time limit," Newman told reporters on the sidelines of the conference.

The moratorium was declared May 6 and originally was to last only through the month. Obama announced May 27 that he was extending it for six months.

In Louisiana, Gov. Bobby Jindal and corporate leaders said that would force drilling rigs to leave the Gulf of Mexico for lucrative business in foreign waters.

They said the loss of business would cost the area thousands of lucrative jobs, most paying more than $50,000 a year. The state's other major economic sector, tourism, is a largely low-wage industry.

Tim Kerner, the mayor of Lafitte, La., cheered Feldman's ruling.

"I love it. I think it's great for the jobs here and the people who depend on them," said Kerner, whose constituents make their living primarily from commercial fishing or oil.

But in its response to the lawsuit, the Interior Department said the moratorium is needed as attempts to stop the leak and clean the Gulf continue and new safety standards are developed.

"A second deepwater blowout could overwhelm the efforts to respond to the current disaster," the Interior Department said.

The government also challenged contentions the moratorium would cause long-term economic harm. Although 33 deepwater drilling sites were affected, there are still 3,600 oil and natural gas production platforms in the Gulf.

Catherine Wannamaker, a lawyer for environmental groups that intervened in the case and supported the moratorium, called the ruling "a step in the wrong direction."

"We think it overlooks the ongoing harm in the Gulf, the devastation it has had on people's lives," she said. "The harm at issue with the Deepwater Horizon spill is bigger than just the Louisiana economy. It affects all of the Gulf."

Sen. David Vitter, R-La., praised the ruling, saying the judge got at least two things right.

"First of all that the president's powers are not unlimited, that there needs to be a basis in law for whatever he does," Vitter told Fox News, "and secondly that this is a huge deal and would cost -- if the moratorium continues -- well over 100,000 jobs in the Gulf. So it is a big, big deals."

Sen. Mark Begich, D-Alaska, said the ruling showed the moratorium was "overreaching."

"It should serve as a shot across the bow to the administration and Congress that American workers must continue to develop America's energy resources within our borders," Begich said in a written statement.

"As much as a tragedy as BP's Gulf of Mexico oil spill disaster is, we can't let emotion overrule sound energy policy," he added. "Our country's energy policy must include increased domestic oil and gas development as we transition to cleaner energy sources."

Rep. Steve Scalise, R-La., applauded the ruling, saying it confirmed his belief that the president didn't have the authority to "impose this reckless ban in the first place."

"For more than a month, Louisiana's economy has been jeopardized by this drilling ban being pushed by federal bureaucrats who have exploited our disaster to pursue their own political agenda, and today's ruling confirms the ban was a knee-jerk reaction that ignored facts and science," he said.

"It is long past time for the president and Secretary Salazar to finally come to the table and work with those of us who have presented alternatives that will immediately increase safety and mitigate environmental damage without shutting down an entire industry."

The Associated Press contributed to this report.