NEW ORLEANS (CN) – An offshore drilling support company has challenged the Obama administration’s six-month moratorium on deepwater drilling in the Gulf of Mexico, claiming there is “no rational connection” between the lengthy drilling ban and experts’ view that a 30-day moratorium would give the government enough time to implement most of its recommended safety measures.
Ensco Offshore Co.’s federal lawsuit is similar to a complaint filed in May by Hornbeck Offshore Services, another offshore drilling support company, but it targets Interior Secretary Ken Salazar’s regulations affecting drilling in both deep and shallow water.
Though the original moratorium barred deepwater drilling for six months, Ensco says even shallow-water drilling has been affected by the “arbitrary” ban. According to Ensco, government agencies “have repeatedly emphasized the safety of shallow-water drilling.”
The suspensions were imposed without the required “notice-and-comment rulemaking,” Ensco claims, and the government never considered alternatives “short of the overbroad blanket moratorium on virtually all forms of exploratory deepwater drilling.”
Ensco says the Interior Department could have “adopted more limited restrictions on deepwater drilling that more closely correspond to the environmental and safety risks present and that would avoid or substantially mitigate the adverse impact on the economy of the Gulf Coast region.”
The original moratorium, issued May 28 and later rejected by federal courts, put a hold on deepwater drilling in the Continental Shelf while the government investigated ways to avoid catastrophes like the April 20 Deepwater Horizon explosion that killed 11 workers and triggered the largest oil spill in U.S. history.
The Obama administration revised the moratorium on Monday, introducing new suspensions that could last until Nov. 30.
Ensco says Salazar and the Interior Department “have failed to identify any facts or analysis” suggesting that a months-long moratorium was “rational.”
The lawsuit cites experts who allegedly peer-reviewed Salazar’s safety report — the “sole source” used to justify the six-month moratorium — and who said “the bulk” of the report’s recommendations could be implemented in about one month.
“Defendants instead imposed a blanket six-month ban, the effects of which are having potentially devastating consequences not only for Ensco and other oil service companies, but also for the economy of the Gulf Coast,” the lawsuit states.
The moratorium was purportedly based on the experts’ recommendations, but Ensco claims those experts have since explained that the drilling ban “was added after the final review and was never agreed to by the contributors.”
The company says eight experts who peer-reviewed the safety report later said they disagreed with the “six-month blanket moratorium on floating drilling.” A “blanket moratorium is not the answer,” the experts allegedly said, as it “will not measurably reduce risk further and it will have a lasting impact on the nation’s economy which may be greater than the oil spill.”
Benton Baugh, president of Radoil and a peer reviewer of the safety report, said the moratorium was never mentioned in his lengthy phone conversations with government officials, according to the lawsuit. “If anybody had [made that suggestion] we’d have thought that ‘that’s craziness,'” Baugh allegedly said.
Ensco claims the government imposed the moratorium without asking for review or comment, and later wrote Baugh a letter expressing “regret [for] any misunderstanding or confusion” based on the moratorium’s inclusion in the final report.
Though the report estimated that 150,000 jobs would be affected by the six-month moratorium, Ensco says it does not “weigh the potentially devastating economic impact of the Deepwater Moratorium on the domestic offshore oil and gas service industries, the Gulf Coast, and its citizens against the need to address the safety concerns addressed in the Safety Report.”
Ensco claims the government inspected two of its deepwater rigs before the drilling ban, and “[n]othing in the Inspection Report revealed any issues with Ensco’s rigs, nor with most of the other rigs operating in the Gulf of Mexico.”
And although the ban is supposed to affect only deepwater drilling, Ensco claims delayed permitting decisions and “relatively few permits to drill in either shallow water or deepwater” have deeply affected Louisiana’s economy.
“There is no credible evidence that the Deepwater Moratorium is a rational response to the [Deepwater Horizon explosion] or to the safety or environmental risks present in deepwater drilling,” Ensco claims. “There is no evidence that the Deepwater Moratorium will measurably decrease such risks, while there is abundant evidence that the harms caused by the Deepwater Moratorium are substantial.”
The moratorium is opposed by the very experts consulted by the government, along with local communities and the oil industry — constituents whose views the government either failed to elicit or simply ignored, the lawsuit states. Ensco says the White House also “failed to consider that the Deepwater Moratorium increases risks in several ways” (original emphasis).
The company seeks damages for alleged violations of the Administrative Procedures Act and the Outer Continental Shelf Lands Act.
It is represented by George Fowler of New Orleans.