Judge blocks deep-water drilling moratorium

A godsend for Obama?

A Reagan-appointed federal judge* has enjoined the Obama Administration from enforcing its moratorium on deep-water drilling in the Gulf.

This ruling is potentially a Godsend to the Obama Administration on a level with Joe Barton’s “apology.” Any opportunity to act aggressively against oil spills ought to be gratefully grasped.

Every one of those deep-water permits was issued in response to an application that included a plan for dealing with a blow-out. The BP fiasco demonstrated that those plans weren’t worth the paper they were printed on, even before the oil execs admitted they’d just Xeroxed them all from the same worthless source. (Listing a biologist who’s been dead for several years as a key resource was sort of a give-away.)

So if the permits can’t be revoked en bloc, why not revoke them one-by-one? It’s certainly not arbitrary or capricious to say that the drillers shouldn’t be allowed to go ahead and run the risk of accidents they don’t know to either prevent or cure, or continue to be rewarded for filing fraudulent documents.

And unless the (petroleum-soaked) Fifth Circuit steps in right away, why not a legislative fix? I’d love to see the Senate Republicans filibustering on behalf of the oil companies.

* Who is – or was recently – a shareholder in Transocean, the drill-rig operator, and has lots of other oil-sector investments.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

16 thoughts on “Judge blocks deep-water drilling moratorium”

  1. What I want to see is whether any oil companies actually continue drilling while the case is being heard. I think we might have some more Chicago-style shakedowns to look forward to!

  2. If there is a legislative fix, the petroleum-soaked Fifth Circuit will call it a compensable taking.

    As will a three-judge minority of the Supreme Court. However, Kennedy seems to be fairly reasonable on takings, and Roberts won't want to be on the wrong side of a 5-4 decision. So any legislation would ultimately be upheld by the Supremes, if everything gets that far.

  3. Actually, you wouldn't need to legislatively stop the drilling. Just require that each well without a workable spill-prevention and clean-up plan post a bond of $50 billion.

  4. You may be correct that this could be politically useful, but I don't think much of the policy, and I thought this was a good opportunity for Obama to dump it and blame someone else.

    If there were ever a good time to have people drilling in the Gulf, it seems to me that would be now when the marginal damage from another blowout would appear to be much less than usual.

  5. Mark, and readers, the correct NYT link for 'A Reagan-appointed federal judge* has enjoined the Obama Administration from enforcing its moratorium on deep-water drilling! in the Gulf is

  6. I think it's a simply case of forcing the externalized risk into the market. Deep well drilling is too risky – thereby other types of oil become more expensive. Gee, maybe then people might have an incentive to kick oil before it's really too late.

  7. According to the New Orleans Times Picayune today, Judge Feldman has owned stock in Transocean Ltd., the owner of the Deepwater Horizon and many other rigs operating in the Gulf; stock in in Halliburton Co., the company that did the cement seals on the well, and in several other energy or offshore companies, including at least one affected by the drilling moratorium, ATP Oil & Gas Corp. This reminds me of Judge Scalia refusing to recuse himself from the case over whether the White House had to turn over documents relating to the energy task force Cheney headed in 2001. Judge Scalia went hunting with VP Cheney after the Court took the case and before it ruled on it. Seems time to upgrade the judicial canons of ethics before we are all boiled in oil.

  8. I don't know that the canon of judicial ethics needs to be upgraded so much as it needs to be made mandatory. It operates pretty much on the honor system and a judge like Scalia who either thinks himself incapable of being biased, or who doesn't care whether he is biased because he has the higher goal of imposing his political agenda on the rest of us, is free to ignore it.

  9. Mark:Exactly! Show the petitioners that they won a futile victory and show them "Chicago style". This is a highly regulated industry, albeit one where the rubber stamp of approval seemed to be on autosign. Even the ill fated well had numerous permit changes that had to be approved in the months leading up to the incident. Cut off the approvals, and everything can pretty much stop. And to add insult to injury, if the companies are dumb enough to start staffing the rigs again, they will have the privilege of paying the workers to sun themselves on the offshore rigs, while the permit changes etc, fester away in the bureaucratic drawer.

    There are only 33 of these things active. I believe there are enough inspectors to simply have them start going over every inch of the place, and writing up every violation, levying fines, etc. IF they need more inspectors, bring in some contractors.

    I believe the government would be well within bounds to also require the more conservative casing and cementing procedures for all wells, and at least a minimum of two cutoffs in the BOP, plus a rigorous schedule of mandatory tests. In sum, make the six month moratorium a fond memory of what might have been.

  10. I'd take two parallel approaches – audit the permits, and prosecute any fraudulent permits.

  11. @Henry:

    The judicial code of ethics is honor system for some things–quite mandatory on others. If Judge Petroleum has an equity interest in a litigant at the time of litigation, he must recuse: no ifs, ands, or buts. His decision could probably be vacated for lack of due process. If he sold his interest in a litigant the day the case came up on the wheel, I think he's on the honor system.

  12. Judge Feldman is apparently an oil guy through and through. Via Picayune, "Feldman also said the findings of the report do not support the policy that Salazar enacted, and the report fails to make the case that the public would face irreparable harm without the drilling suspension."

    "Feldman further said that he was convinced that the moratorium would cause serious damage to the Louisiana economy."

    I guess the shrimpers and oystermen losing their livelyhoods don't count as "irreparable harm" or "serious damage to the Lousiana economy."

  13. Mark–Rule 65(c) of the Federal Rules of Civil Procedure provides that "The court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained. The United States, its officers, and its agencies are not required to give security."

    While the rule is couched in terms that indicate that a bond is mandatory, there is a great deal of case law to the effect that the Court, in its discretion, can waive the bond requirement. However, typically the bond requirement is waived in only cases where (i) there is no likelihood of damages to the enjoined party, (ii) the moving party is indigent, or (iii) basic constitutional rights (e.g., free speech) are at issue. Needless to say, none of those factors are present here. I note, however, that it is not clear that the government sought to have the plaintiffs post a bond, but I can't imagine that any lawyer opposing an attempt to obtain a preliminary injunction would fail to do so.

    Further, you may want to take a look at the Supreme Court's ruling on Monday in Monsanto Co. v. Geertson Seed Farms, which can be found here: http://bit.ly/95hbTP.

    In that case, involving a permanent rather than a preliminary injunction, the injunction, which was effective nationwide, was vacated because the lower court failed to consider the possibility of a more narrow injunction. In the Louisiana oil rig case, the lower court focused on the conclusion that the agency involved lacked substantial evidence to support a ban on off-shore wells of 5000 feet. However, it blocked the entire ban without considering whether there was factual support for a ban on deeper wells. In other words, in Monsanto an injunction against regulatory inaction was vacated due to overbreadth (or, more properly, failing to consider a narrower, more focused remedy) where, here, we have a preliminary injunction imposed even though it is clear that there was evidence to support more narrow agency action that would affect some oil rigs. And, unlike Monsanto, the present case involved a preliminary injunction which, procedurally, places a much heavier burden on the moving party.

  14. I don't know enough to comment intelligently on the merits, but did anyone else wonder whether Judge Martin Feldman has a sense of humor about sharing the name of an actor whose most famous role was that of Igor in Young Frankenstein?

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