Cranes load and unload ships normally used for offshore drilling operations in the Gulf of Mexico in Port Fourchon, Louisiana. Photographer: Derick E. Hingle/Bloomberg
A New Orleans federal judge lifted the six-month moratorium on deepwater drilling imposed by President Barack Obama following the largest oil spill in U.S. history. Drilling services shares jumped on the news.
Obama temporarily halted all drilling in waters deeper than 500 feet on May 27 to give a presidential commission time to study improvements in the safety of offshore operations. More than a dozen Louisiana offshore service and supply companies sued U.S. regulators to lift the ban. The U.S. said it will appeal the decision.
U.S. District Judge Martin Feldman today granted a preliminary injunction, halting the moratorium. He also “immediately prohibited” the U.S. from enforcing the ban. Government lawyers told Feldman that ban was based on findings in a U.S. report following the sinking of the Deepwater Horizon rig off the Louisiana coast in April.
“The court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium,” Feldman said in his 22-page decision. “The blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.”
“The court cannot substitute its judgment for that of the agency, but the agency must ‘cogently explain why it has exercised its discretion in a given manner,’” Feldman said, citing a previous ruling. “It has not done so.”
Feldman in a separate order today “immediately prohibited” the U.S. from enforcing the drilling moratorium, finding the offshore companies would otherwise incur “irreparable harm.”
White House press secretary Robert Gibbs said that “continuing to drill at these depths without knowing what happened does not make any sense.”
Transocean Ltd., which leased the Deepwater Horizon to BP Plc, jumped as much as 3.5 percent in New York trading after the decision was announced. Hornbeck Offshore Services Inc., which brought the suit, surged as much as 11 percent.
The U.S. argued that the moratorium was necessary to assure public safety.
“We need to make sure deepwater drilling is as safe as we thought it was the day before this incident,” Brian Collins, a lawyer for the government, told Feldman in a court hearing June 21. “It is crucial to take the time because to fail to do so would be to gamble with the long-term future of this region.”
BP has two pipes collecting oil and gas from the ocean floor. They collected 25,830 barrels of oil yesterday, the biggest quantity diverted from the Gulf of Mexico since the April 20 spill began, London-based BP said in a statement. BP spokesman David Nicholas declined to comment on the ruling, saying the company was not a party to the case.
Lawyers for the drilling companies told Feldman the moratorium illegally sidesteps a required industry comment period. They also said regulators failed to tell Obama that all active deepwater rigs passed an immediate re-inspection after the Deepwater Horizon exploded and sank, with only two rigs reporting minor violations and the rest getting approval to continue operations.
Henry Dart, special counsel for the Louisiana attorney general, told Feldman that federal regulators failed to consult with state officials about the impact of the drilling ban, allegedly violating U.S. law.
Jobs in Danger
“Even after the catastrophic events of Sept. 11, the government only shut down the airlines for three days,” Louisiana said in court papers seeking to lift the ban.
Lawyers for the state and oilfield companies told Feldman that the ban could cost as many as 20,000 jobs if the moratorium lasted 18 months.
“The defendants trivialize such losses by characterizing them as merely a small percentage of the drilling rigs affected, but it does not follow that this will somehow reduce the convincing harm suffered,” Feldman said. He said the economic impacts of the ban would “clearly ripple throughout the economy of this region.”
Feldman granted the injunction after finding it likely the oilfield companies will succeed in proving “the agency’s decision was arbitrary and capricious,” which violates federal law governing policy decisions.
“An invalid agency decision to suspend drilling of wells in depths over 500 feet simply 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 the country,” Feldman said.
“Today’s ruling by U.S. District Court Judge Martin Feldman is an important step in returning thousands of oil service workers to their jobs,” Royal Dutch Shell Plc spokesman Bill Tanner said in an e-mailed statement.
“Shell remains confident in its expertise and procedures to safely drill and complete deepwater wells.” Shell’s safety standards often exceed regulatory requirements and include including a rigorous training program for well engineers, Tanner said.
Kjersti Torgersen, a spokeswoman for Statoil ASA in Houston, did not immediately respond to a telephone call seeking comment. Todd M. Hornbeck, CEO of Hornbeck Offshore, didn’t immediately return a call for comment.
Realistically, not a lot has changed, said Jud Bailey, an analyst at Jefferies & Co. in Houston.
“It’s a small victory for the industry, but clearly the administration has dug in its heels and is going to try to keep this moratorium, come hell or high water,” Bailey said today in a telephone interview. “Investors, as it relates to the drillers, are for the most part staying away. There’s too much uncertainty, too much headline risk.”
Bailey said he doesn’t think many operators would run out and immediately try to resume operations. “You run the risk of this getting overturned by the appellate court,” he said.
The case is Hornbeck Offshore Services LLC v. Salazar, 2:10-cv-01663, U.S. District Court, Eastern District of Louisiana (New Orleans).
On his first day in office, January 20, 2009, President Barack Obama issued a statement on the White House Web site promising Gulf Coast residents that his administration would not fail them like he accused his predecessor President George W. Bush.
Eighteen months later, those arrogant words are coming back to haunt Obama as the Gulf Coast is facing the third month of failure by Obama to marshall sufficient resources to protect the region from the massive BP oil spill.
“President Obama will keep the broken promises made by President Bush to rebuild New Orleans and the Gulf Coast. He and Vice President Biden will take steps to ensure that the federal government will never again allow such catastrophic failures in emergency planning and response to occur.”
Since then, the White House has edited the comment to remove the personal insult to President Bush so that it now reads:
“President Obama will keep the broken promises to rebuild New Orleans and the Gulf Coast. He and Vice President Biden will take steps to ensure that the federal government will never again allow such catastrophic failures in emergency planning and response to occur. Within weeks of his inauguration, he made a renewed commitment to partner with the people of the Gulf Coast to rebuild now, stronger than ever.”
Based on the Politico report, the White House also edited out verbiage bragging about Obama’s post-Katrina trips to the region:
The site also points out that Obama “visited thousands of Hurricane survivors in the Houston Convention Center and later took three more trips to the region” and worked with the Congressional Black Caucus to help rebuild in the aftermath of Katrina.
The Obama administration has left a destructive trail of catastrophic failures in its wake over the BP oil spill, beginning with its failure to ensure that an adequate disaster plan was in place for BP’s Deepwater Horizon well to its failure to secure enough skimmers and booms to prevent the spill from reaching the shores of the Gulf states.
Obama had to be shamed into making his first overnight trip to the Gulf states last week. It took nearly two months for him to speak directly with BP executives. It wasn’t until last week that he acted like he was engaged, but even then he only spent half the week on the spill. The other half he spent on the golf course and at a ball game.
Obama’s response has been called “lackadaisical” by RNC Chairman Michael Steele who called on Obama to rein in his leisurely lifestyle until the leaking oil well is plugged.
Since the oil well blew on April 28, Obama has taken two vacations, played seven rounds of golf, entertained the pop star Bono and been entertained by Paul McCartney. He has also attended the theater several times, a Major League basball game, political fundraisers and has hosted several White House parties and barbeques.
Yet Obama’s chief of staff Rahm Emanuel ripped BP CEO Tony Hayward this weekend for taking one day off for a yacht race in Britain.
Team Obama is putting the word out to the media they think they’ve done enough on the oil spill with last week’s half-week effort and the resulting $20 billion shakedown of BP and are ready to move on. The Atlantic’s White House stenographer Marc Ambinder previewed the Obama administration’s attitude last night:
WASHINGTON – The panel appointed by President Barack Obama to investigate the Gulf of Mexico oil spill is short on technical expertise but long on talking publicly about “America’s addiction to oil.” One member has blogged about it regularly.
Only one of the seven commissioners, the dean of Harvard’s engineering and applied sciences school, has a prominent engineering background — but it’s in optics and physics. Another is an environmental scientist with expertise in coastal areas and the after-effects of oil spills. Both are praised by other scientists.
The five other commissioners are experts in policy and management.
The White House said the commission will focus on the government’s “too cozy” relationship with the oil industry. A presidential spokesman said panel members will “consult the best minds and subject matter experts” as they do their work.
The commission has yet to meet, yet some panel members had made their views known.
Environmental activist Frances Beinecke on May 27 blogged: “We can blame BP for the disaster and we should. We can blame lack of adequate government oversight for the disaster and we should. But in the end, we also must place the blame where it originated: America’s addiction to oil.” And on June 3, May 27, May 22, May 18, May 4, she called for bans on drilling offshore and the Arctic.
“Even as questions persist, there is one thing I know for certain: the Gulf oil spill isn’t just an accident. It’s the result of a failed energy policy,” Beinecke wrote on May 20.
Two other commissioners also have gone public to urge bans on drilling.
Co-chairman Bob Graham, a Democrat who was Florida governor and later a senator, led efforts to prevent drilling off his state’s coast. Commissioner Donald Boesch of the University of Maryland wrote in a Washington Post blog that the federal government had planned to allow oil drilling off the Virginia coast and “that probably will and should be delayed.”
Boesch, who has made scientific assessments of oil spills’ effects on the ecosystem, said usually oil spills are small. But he added, “The impacts of the oil and gas extraction industry (both coastal and offshore) on Gulf Coast wetlands represent an environmental catastrophe of massive and underappreciated proportions.”
An expert not on the commission, Granger Morgan, head of the engineering and public policy department at Carnegie Mellon University and an Obama campaign contributor, said the panel should have included more technical expertise and “folks who aren’t sort of already staked out” on oil issues.
Jerry Taylor of the libertarian Cato Institute described the investigation as “an exercise in political theater where the findings are preordained by the people put on the commission.”
When the White House announced the commission, Interior Secretary Ken Salazar and others made compared it with the one that investigated the 1986 Challenger accident. This one, however, doesn’t have as many technical experts.
The 13-member board that looked into the first shuttle accident had seven engineering and aviation experts and three other scientists. The 2003 board that looked into the Columbia shuttle disaster also had more than half of the panel with expertise in engineering and aviation.
Iraj Ersahaghi, who heads the petroleum engineering program the University of Southern California, reviewed the names of oil spill commissioners and asked, “What do they know about petroleum?”
Ersahaghi said the panel needed to include someone like Bob Bea, a prominent petroleum engineering professor at the University of California, Berkeley, who’s an expert in offshore drilling and the management causes of manmade disasters.
Bea, who’s conducting his own investigation into the spill, told The Associated Press that his 66-member expert group will serve as a consultant to the commission, at the request of the panel’s co-chairman, William K. Reilly, Environmental Protection Agency chief under President George H.W. Bush.
Adm. Hal Gehman, who oversaw the Columbia accident panel, said his advice to future commissions is to include subject matter experts. His own expertise was management and policy but said his engineering-oriented colleagues were critical to sorting through official testimony.
“Don’t believe the first story; it’s always more complicated than they (the people testifying) would like you to believe,” Gehman said. “Complex accidents have complex causes.”
The oil spill commission will not be at a loss for technical help, White House spokesman Ben LaBolt said.
For one, he said the panel will draw on a technical analysis that the National Association of Engineering is performing. Also, members will “consult the best minds and subject matter experts in the Gulf, in the private sector, in think tanks and in the federal government as they conduct their research.”
That makes sense, said John Marburger, who was science adviser to President George W. Bush.
“It’s not really a technical commission,” Marburger said. “It’s a commission that’s more oriented to understanding the regulatory and organizational framework, which clearly has a major bearing on the incident.”
Executive order creating the commission: http://tinyurl.com/spillpanel
White House announcement on commissioners: http://tinyurl.com/25g39t4
Frances Beinecke’s blog archive: http://tinyurl.com/3p86vx
Shoot, I must have lived such a doggoned sheltered life as a normal, independent American up there in the Last Frontier, schooled with only public education and a lowly state university degree, because obviously I haven’t learned enough to dismiss common sense (a prerequisite for power in Washington these days). Help me out, friends! Help someone like me – and the majority of Americans – understand why we would ever kowtow and bow to foreign regimes that hate us, instead of doing all we can to starve the beast of terrorism in our plight for security, prosperity, and peace.
There’s an obvious common sense answer to our need for security and energy independence, but don’t hold your breath waiting for common sense to surface in Washington – it’s an endangered species there. Obviously we must responsibly develop our God-given domestic oil and gas reserves right here, right now; we must conserve energy; and we must develop renewables that are based on sound science, not snake oil and favors for political pals.
Please read the following Newsmax article (posted below) summarizing GOP efforts to push the Obama Administration to produce a plan to potentially wean us off one source of dangerous foreign oil. (Of course, I think the prodding should be even more aggressive to shake up the naïve complacency of anti-development Democrats and some deer-in-the-headlights mainstream reporters who are finally realizing they’d been buffaloed into believing any politician had all the answers.)
We must understand the imperative nature of energy security, along with America’s life and death need to secure our borders. Baby, this is why I won’t sit down and shut up about the need to drill.
– Sarah Palin
A dozen Republican senators have sent a letter challenging the Obama administration to explain what it knows about Venezuela’s support for terrorism and suggesting that the country be declared a “state sponsor of terrorism.”
“Hugo Chavez’s relationships with Iran and other foreign terrorist organizations continue to grow and pose a serious threat to our hemisphere,” Sen. George LeMieux of Florida, one signer of the letter, said of the Venezuelan president.
“I encourage the State Department to thoroughly evaluate Venezuela’s actions and determine if the country needs to be added to the official U.S. list of state sponsors of terrorism.”
John Ensign of Nevada, who drafted the letter along with LeMieux, declared: “It’s no secret to the American people that Venezuela wishes harm to the United States. What is secret is how many more ties to terrorist organizations and state sponsors of terrorism does Venezuela need to be declared a state sponsor of terrorism.”
The letter addressed to Secretary of State Hillary Clinton points to a number of concerns raised by Chavez’s Venezuela:
- Surface-to-air missiles and other weapons have reportedly been provided by Venezuela to FARC guerrillas in Colombia. An arms cache captured from FARC in 2008 included Swedish-made anti-tank rocket launchers that had been sold to Venezuela.
- Venezuela provides cross-border sanctuaries for Colombian guerrillas.
- A United Nations report last year disclosed that nearly one-third of all cocaine produced in the Andean region passes through Venezuela. The senators question how much terrorist groups such as al-Qaida profit from trafficking drugs that originate in or flow through Venezuela.
- The U.S. has frozen the assets of two Venezuelans, including one working for Chavez, for providing direct support to the terrorist group Hezbollah. The senators ask the State Department for an assessment of the activities of Hezbollah inside Venezuela.
- Chavez’s “extensive support” of the Castro regime in Cuba is calculated to amount to $1 billion a year, and Cuban advisors are involved in the intelligence and security apparatus of the Venezuelan government.
- Chavez “has repeatedly expressed support” for Iran’s covert nuclear program and announced a plan for the construction of a “nuclear village” in Venezuela with Iranian assistance. Also, Chavez has pledged to provide Iran with 20,000 barrels of gasoline per day.
- As for Iran’s Revolutionary Guards, “recent years have witnessed an increased presence in Latin America, particularly Venezuela.”
- Weekly flights connecting Iran, Syria, and Venezuela raise suspicions of “nefarious purposes” because passengers on these flights have been subject to only “cursory immigration and customs controls.”
Newsmax magazine’s May issue disclosed that Iranian security officers seal off the airport in the Venezuelan capital, Caracas, two hours before Iran Air jets arrived. Those officers supervise cargo unloading with no inspection by local officials.
Iran could easily fly in highly enriched uranium that could then be carried into the U.S. from Mexico, increasing the risk of a terrorist attack with a nuclear weapon.
If the U.S. did declare Venezuela a state sponsor of terrorism, American arms sales to the country would be prohibited, as would U.S. economic assistance, and severe restrictions would be placed on bilateral trade.
“The Obama administration’s decision to pull the trigger on Venezuela may hinge on whether the United States can afford to forfeit petroleum exports from that South American country,” Roger F. Noriega, a former assistant secretary of state and a visiting fellow at the American Enterprise Institute, observes on the Institute’s journal, The American.
“Anticipating the argument that Venezuela’s oil supply is too essential to the U.S. economy to risk slapping that country with the terrorist label, the senators ask the administration to explain its ‘contingency plan’ for dealing with a ‘sudden and prolonged unavailability of Venezuelan oil exports to the United States.’”
In answer to the question, the U.S. would likely find new sources of oil on the international market — but Venezuela’s economy will be crippled by the loss of oil revenue and consumer imports, Noriega notes, adding: “Since the last years of the George W. Bush administration, U.S. diplomats have steered clear of Chavez for fear of ‘provoking’ him. Thanks to congressional oversight, we are about to confront the terrible downside of that naïve, passive policy.”
Other senators who signed the letter include John McCain of Arizona, Scott Brown of Massachusetts, and Republican Whip Jon Kyl of Arizona.
The Ass Obama Should Kick Is His Own
Posted By Pamela Geller On June 9, 2010 @ 8:21 am In Environment, News, Obama, Politics | 87 Comments
The President of the United States is looking for an ass to kick.
“I don’t sit around just talking to experts because this is a college seminar,” he said Monday, “we talk to these folks because they potentially have the best answers, so I know whose ass to kick.”
He is so embarrassing. What president talks with such false braggadocio? Would a Republican dog catcher get away with such vulgar invective? He is a disaster, and he lashes out when he is called out on any of his too-numerous-to-recount-here failures.
Bush was eviscerated, crucified for showing more competence in his pinky toenail during Katrina than Obama has demonstrated in the whole of this short, painful presidency. The media’s silence on his fumbling and stumbling is absolutely corrupt. If anyone should be impeached, it ought to be those useful idiots and fellow travelers. It is now a 24-hour bash BP news cycle.
Sarah Palin said:
50 days in, and we’ve just learned another shocking revelation concerning the Obama administration’s response to the Gulf oil spill. In an interview aired this morning, President Obama admitted that he hasn’t met with or spoken directly to BP’s CEO Tony Hayward. His reasoning : “Because my experience is, when you talk to a guy like a BP CEO, he’s gonna say all the right things to me. I’m not interested in words. I’m interested in actions.”
Sounds as if Obama doesn’t have much confidence in BP. He is right about that, since BP has been responsible for a large number of accidents in the last few years. The Washington Post reports this : “BP has had more high-profile accidents than any other company in recent years. And now, with the disaster in the gulf, independent experts say the pervasiveness of the company’s problems, in multiple locales and different types of facilities, is striking.”