Another Oil Firm Challenges Drilling Ban

HOUSTON (CN) – Diamond Offshore wants the federal government’s 60-day ban on deepwater drilling in the Gulf of Mexico declared invalid for violating the Administrative Procedures Act. The order did not contain any “facts, data, analysis or risk assessment” to back up the restrictions on the 33 permitted deepwater wells in the Gulf, according to the federal complaint.

     Diamond wants Interior Secretary Ken Salazar restrained from enforcing the ban on drilling in more than 500 feet of water in the Gulf.
     Salazar issued the freeze order on May 28. The Minerals Management Service then issued a document titled “NTL-4” that implemented the moratorium.
     Houston-based Diamond describes itself as “America’s largest offshore drilling contractor,” and employs about 5,000 people.
     “Since 2000, Diamond Offshore is responsible for over one-third of all wells safely drilled from floating rigs in the GOM,” it claims. “This translates to over 650 wells drilled in the GOM by Diamond Offshore floating rigs in the past 10 years, with no significant well-control problems.”
     Diamond Offshore says the Minerals Management Service inspected most of the 33 deepwater wells still operating in the Gulf after the April 20, 2010 explosion of the Deepwater Horizon.
     “(A)s noted, 29 of the 33 permitted drill sites affected by the moratorium and NTL-4 were inspected by the MMS after the incident of April 20, 2010, and no violations were found on 27 of the 29 rigs inspected, much less ‘any threat of serious, irreparable, immediate harm or damage’ or any need for additional ‘safety or environmental equipment’ identified for any rig,” Diamond claims.
     Industry experts from whom the Interior Secretary sought advice did not agree with the agency’s “blanket” moratorium, Diamond says.
     “It has since come to light that the experts cited in the report upon which the moratorium was based do not agree – and never did agree – with the moratorium or NTL-4,” Diamond says.
     It claims the version of the moratorium approved by the “National Academy of Engineering peer review panel” called for a 6-month moratorium on “new drilling permits” for rigs operating in “excess of 1,000 feet.”
     “In other words, the 33 rigs currently drilling were to be checked to make sure they were functional and operating safely, and then be allowed to continue drilling,” Diamond says.
     Five of the seven experts issued a public letter stating that Salazar’s recommendation of a 6-month ban misrepresented their position.
     “This tragedy had very specific causes,” the experts wrote. “A blanket moratorium will have the indirect effect of harming thousands of workers and further impact state and local economies suffering from the spill.
     “We would be in effect punishing a large swath of people who were and are acting responsibly and are providing a product the nation demand.”
     Diamond says that if the government is not restrained from enforcing the moratorium, “hundreds of thousand of individuals could lose their jobs.”
     “To punish plaintiffs – and indeed, all the other deepwater drillers and support personnel that have maintained longstanding records of safe deepwater operations – particularly in such an arbitrary manner, significantly outweighs any harm to the defendants,” Offshore claims.
     Diamond seeks declaratory judgment declaring the moratorium and NTL-4 invalid and unenforceable.
     It is represented by Paul Dobrowski of Houston.

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