A federal judge in Louisiana Thursday held the Interior Department in civil contempt of the court's preliminary injunction barring the federal government from enforcing its initial moratorium on deepwater drilling in the Gulf of Mexico.

The ruling by U.S. District Court Judge Martin Feldman puts producers and pro-drilling lawmakers in a better position to fight for increased exploration and production activity in the Gulf of Mexico. "Judge Feldman's decision is a sharp rebuke of the Interior Department for continuing to place politics before all else following the BP spill" last April, said Sen. David Vitter (R-LA).

"A ruling of this nature reveals that the judge believes that Interior blatantly disregarded his earlier ruling -- undoubtedly because of their actions that led to the current de facto moratorium," he said.

In June Feldman granted a motion by oil service companies for a preliminary injunction barring Interior from enforcing its industrywide moratorium on deepwater oil and natural gas drilling in the Gulf of Mexico for six months.

Feldman said Interior failed to justify its decision to impose the six-month ban on deepwater drilling in the wake of the blowout of BP's Macondo well, and essentially sought retribution against an entire industry for the actions of one company -- BP plc (see Daily GPI, June 23, 2010).

In July, however, Interior issued a new moratorium -- or suspension as Interior called it -- in disregard of Feldman's preliminary injunction. At the time, Feldman's ruling on the initial ban was pending on appeal before the U.S. Circuit Court of Appeals for the Fifth Circuit (see Daily GPI, July 14, 2010).

"Such dismissive conduct, viewed in tandem with the reimposition of a second blanket and substantively identical moratorium and in light of the national importance of this case, provide this court with clear and convincing evidence of the government's contempt of this court's preliminary injunction," Feldman said in his order.

In their request for a contempt finding, the plaintiffs -- Louisiana-based Hornbeck Offshore Services and other oil and gas service companies -- "stress that the government did not simply reimpose a blanket moratorium; rather, each step the government took following the court's imposition of a preliminary injunction showcases its defiance; the government failed to seek a remand; it continually reaffirmed its intention and resolve to restore the moratorium; it even notified operators that through a preliminary injunction [it] had issued, they could quickly expect a new moratorium," the ruling said.

Hornbeck and others requested compensation for Interior's conduct. Feldman referred the matter to Joseph Wilkinson, a federal magistrate judge on the U.S. District Court in Louisiana.

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