Oil Drillers Await Deepwater Ruling
Source: Bloomberg, Edward Klump and David Wethe (6/23/10)
"GOM oil drillers halt work pending judge's deepwater decision."
U.S. District Judge Martin Feldman yesterday granted a preliminary injunction, lifting a six-month moratorium President Barack Obama put in place May 27 on new deep-water drilling permits. The president also called for work to be stopped on 33 wells.
"No one's going to go back to work," said Brian Uhlmer, an analyst at Pritchard Capital Partners in Houston, citing new federal standards that allow the government to recall drilling permits and require new filings. "You can have a non-moratorium moratorium."
Feldman in a separate order yesterday "immediately prohibited" the U.S. from enforcing the drilling moratorium, finding the offshore companies would otherwise incur "irreparable harm." The moratorium affects drilling in waters deeper than 500 feet (152 meters).
Interior Secretary Kenneth Salazar said in a statement last night that he will issue a new order that "eliminates any doubt" a moratorium is justified.
"We see clear evidence every day, as oil spills from BP's well, of the need for a pause on deep-water drilling," Salazar said. "Based on this ever-growing evidence, I will issue a new order in the coming days that eliminates any doubt that a moratorium is needed, appropriate, and within our authorities."
Energy companies won't resume operations until they have more certainty on drilling and what the federal government plans to do, Louisiana Governor Bobby Jindal said yesterday during a press conference.
"You can't just turn this switch on and off," Jindal said. "Once these rigs leave the Gulf, they may be gone for years."