As the Justice Department went to court Thursday to reinstate the six-month moratorium on deepwater oil and natural gas drilling in the Gulf of Mexico (GOM), a Washington, DC-based advocacy group reported that the three Fifth Circuit judges assigned to the case have close ties to the industry.
Two judges on the appeals panel, Jerry Edwin Smith and William Eugene Davis, frequently represented the oil and gas industries while in private practice, while the third judge on the panel, James L. Dennis, has extensive financial holdings in at least 18 companies in the energy industry, according to the report by Alliance for Justice.
Similar accusations were made against U.S. District Court Judge Martin Feldman last month after he struck down the federal government's ban on deepwater drilling, saying the Interior Department had "acted arbitrarily and capriciously" and had failed to justify a need for imposing a blanket moratorium following the explosion on board the BP plc-leased Deepwater Horizon rig (see Daily GPI, June 24).
The American Petroleum Institute (API) on Thursday urged the U.S. Court of Appeals to uphold Feldman's decision to stay the federal moratorium. "The government took the proper steps to review the safety and operations of all rigs in the Gulf following the Deepwater Horizon incident, but a blanket moratorium was a step too far," said Jack Gerard, president of API.
Feldman said the Obama administration had sought retribution against an entire industry for the actions of one company: BP (see Daily GPI, June 23). The moratorium put the kibosh on all new permits for deepwater projects and suspended drilling on 33 exploratory wells.
The Fifth Circuit Thursday heard oral arguments on the government's bid to stay Feldman's ruling pending a decision by the appeals court. It's unclear whether the court will put the case on the fast-track.
The Fifth Court has allowed only the International Association of Drilling Contractors and the Independent Petroleum Association of America to file amicus briefs in opposition to the requested stay.
Hornbeck Offshore Services LLC, a small oil services company in Covington, LA, petitioned the district court for a preliminary injunction of the moratorium on deepwater drilling in early June. Within days, a number of other oil services and shipbuilding companies joined the lawsuit.
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