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Is the Deepwater Horizon accident similar enough to all other deepwater drilling operations to stop drilling offshore? One federal judge has said no.

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page olf of Judge Maetin Feldman's June 22 2010 decision

The full 22 page decision by New Orleans District Court Judge Martin Feldman can be viewed at whnuckolsconsulting.com/pdf/jf.pdf

Today in District Court in New Orleans Judge Martin Feldman overturned the Obama Administration’s moratorium on deepwater drilling, saying that the Administration’s decision was arbitrarily imposed. Hornbeck Offshore Services, while filed the case in court, argued that the Administration has provided no proof that other drilling operations posed the same threat as occurred when the Transocean Deepwater Horizon rig exploded, resulting in the ongoing spill that has caught the attention of the public and the media in the U.S.

The 22-page written ruling issues by Judge Martin brings attention away from tar balls on beaches and focuses attention on the regulation and legal aspects of the aftermath of the disaster.

While Robert Gibbs has stated that the Obama Administration will immediately appeal to the Circuit Court, it is likely that the back and forth in the appeals process is likely to escalate beyond the 5th Circuit before the litigation comes to a final conclusion.

Judge Feldman noted that the Administration has failed to document irreparable harm that warrants suspension of operations, nor how long it would take to implement new recommendations regarding safety. While the 24/7 news cycle does make one wonder if it really was necessary for the Administration to carefully document in written form that a major oil spill of epic proportions can occur when drilling deep offshore wells, I suspect it was the open ended timeline of the moratorium that has moved the oil services industry to push back this hard.

On the surface, the Administration’s decision to put a stop to an entire section of an industry for what was beginning to look to some like an ever lengthening period of time, is not in the tradition of government’s reaction to safety issues. When a plane crashes, a common reaction is to pull all planes of that design, or ones that use a suspected particular part, out of service until the defect is better understood and fixed. The same applies with recalls in the auto industry – a particular model of car is taken off of the market. But the analogy in the car business would be to say that because a Toyota Prius pedal became stuck on the highway, all cars who can go highway speeds would be taken off of the streets irrespective of who made the car. If you start looking at the oil drilling moratorium in this way one would be lead to think that the reaction to stop offshore deepwater drilling is way out of line.

Page 19 of the findings today show Judge Feldman questioning “If some drilling equipment parts are flawed, is it rational to say all are? Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines?” He then concludes “That sort of thinking seems heavyhanded, and rather overbearing.”

 The judge cited the Administrative Procedure Act (APA) and noted that the APA cautions that an agency action may only be set aside if it is “arbitrary, capricious, an abuse of discretion, or not otherwise not in accordance with law.” 5 U.S.C. §706(2)(A). Accordingly Judge Feldman needed to find a “clear error of judgment” by the federal government to decide in favor of the oil services companies who brought their case before the court. What the Judge had to see in the federal government’s case was a “rational connection between the facts found and the choice made” to shut down deepwater drilling.

 Judge Feldman wrote “After reviewing the Secretary’s Report, the Moratorium Memorandum, and the Notice to Lessees, the Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium.”

 Further in the findings, Judge Feldman identifies holes in the definition of “deepwater drilling” and the back and forth of whether it means 500 or 1000 feet – a topic that has also been questioned in the media for the past few weeks.

 The judgment concludes by issuing a preliminary injunction against the government because the “defendants have failed to cogently reflect the decision to issue a blanket, generic, indeed punitive, moratorium with the facts developed during the thirty-day review. The plaintiffs have established a likelihood of successfully showing that the Administration acted arbitrarily and capriciously in issuing the moratorium.”

 Today’s findings state that the federal mandate for a suspension of drilling over 500 feet “cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country.”

 There do appear to be multiple options for the federal regulators to control deepwater drilling from this point forward.  As Press Secretary Robert Gibbs has stated, the Administration will take the case up on appeal at the Circuit court level, and a second review of the Administration’s procedures that resulted in the moratorium might result in a decision in the government’s favor.

 But the Department of the Interior does not need to hang its hat solely on the battles between attorneys. Flaws, be they overstated or real, identified by Judge Feldman, give DOI a roadmap to craft a second decision that could also result in a suspension of overly dangerous drilling procedures until improvements in the risk/reward balance are improved.

 It is important to note that no investigation will result in a set of recommendations that make drilling at any depth risk free. What is desired is a better balance between risk and the capabilities to manage the risk, and that is something that everyone can get behind.

The full 22 page decision by New Orleans District Court Judge Martin Feldman can be viewed at www.whnuckolsconsulting.com/documents/judgefeldman22June10.pdf

The author is a scientist by training and the owner of W.H. Nuckols Consulting, an environmental policy firm.

Written by Will Nuckols

June 22, 2010 at 3:10 pm

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