US government appeals court defeat on drilling moratorium

WASHINGTON - The US government sought to keep its moratorium on offshore oil drilling in place, filing an appeal against an earlier court order to end the ban.

The government Wednesday also asked federal Judge Martin Feldman in New Orleans to put his order from Tuesday on hold or issue a temporary stay until the appeals court hears its request for an emergency stay, the Bloomberg financial news agency reported.

The Obama administration is locked in a legal battle with Hornbeck Offshore Services Inc and other Louisiana-based oil services companies who argue that the government’s moratorium on drilling oil wells in the Gulf of Mexico would irreparably harm their businesses.

US President Barack Obama had ordered a six-month moratorium while safety and environmental issues are studied for possible new regulations in the wake of the two-month-old crude-oil gusher at a BP Plc well off the Louisiana coast.

Late Tuesday, Interior Secretary Ken Salazar announced the government would issue a new moratorium order, hours after Feldman had quashed its initial drilling ban.

“We see clear evidence every day as oil spills from BP’s well of the need for a pause on deepwater drilling,” Salazar said. “The decision to impose a moratorium on deepwater drilling was and is the right decision.”

He said the new order, which he plans to issue within days, would set aside “any doubt that a moratorium is needed, appropriate and within our authorities”.

The Sierra Club environmental group has said it would join the White House in its appeal.

Feldman Tuesday granted a preliminary injunction against the moratorium, finding it overly broad and insufficiently justified.

The moratorium, extended in May for six months, covered new deepwater offshore drilling and halted permits and active exploration of drilling opportunities off coastlines in Alaska and Virginia and in the Gulf of Mexico.