New Drilling Ban Creates Conflict

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"The latest moratorium drew immediate condemnation."

The Obama administration on Monday issued a new order banning most new deepwater-drilling activities until Nov. 30, revamping an earlier moratorium struck down in federal court and setting up another round of conflict with the oil industry.

The latest moratorium, a response to the continuing Gulf oil spill, drew immediate condemnation from oil-industry representatives and their allies.

Interior Secretary Ken Salazar said in a statement that his latest order banning new deepwater drilling reflected new evidence regarding safety concerns, shortcomings in industry equipment to control blowouts, and spill-response capabilities that are strained by the BP spill.

The new ban establishes a process through which the Interior Department will gather information that could "provide the basis for identifying conditions for resuming certain deepwater drilling activities." Instead of issuing a blanket ban on drilling in waters of 500 feet or more, the moratorium is targeted at specific drilling configurations and technologies.

About 33 deepwater rigs are directly affected by the moratorium. But uncertainty about Interior Department drilling policy has frozen activity among shallow-water rig operators not technically covered by the deepwater moratorium.

The initial moratorium, announced May 27, was intended to be in place for six months to give a presidential commission time to investigate the causes of the blowout in the BP well.

A federal district-court judge last month threw out the moratorium, calling it arbitrary, and questioning the logic the Obama administration used to defend it.

The Fifth Circuit Court of Appeals in New Orleans declined to reinstate the May 27 moratorium pending a hearing on the appeal. The Fifth Circuit is expected to hear the administration's appeal of the lower court ruling by the end of August.

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