Judge blocks Gulf drilling freeze

A US judge Tuesday blocked a Gulf of Mexico deepwater drilling freeze, saying it would irreparably harm the economy and oil companies, and striking a blow to the Obama administration.

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The White House immediately said it would appeal district judge Martin Feldman’s ruling in favor of 32 oil firms which challenged the moratorium imposed by President Barack Obama in the wake of the massive Gulf oil spill.

The US administration had called for the halt until experts could determine what caused the BP-leased Deepwater Horizon to explode and sink in April, unleashing the nation’s worst ever environmental disaster.

In the public interest: Judge

Feldman said he was persuaded it was in the public interest to lift the freeze by the Minerals Management Service, adding the oil firms “would likely succeed in showing that the agency’s decision was arbitrary and capricious.”

Describing the drilling decision as “invalid,” Feldman wrote in his ruling that the agency decision “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 this country.”

White House spokesman Robert Gibbs said the administration would “immediately” appeal the New Orleans judge’s decision.

“The president strongly believes, as the Department of Interior, Department of Justice argued yesterday, that continuing to drill at these depths without knowing what happened is – does not make any sense,” he said.

The drilling “potentially puts the safety of those on the rigs and environment of the Gulf at a danger that the president does not believe we can afford right now.”

Workers worry

But oil workers and executives along the southern US coast have criticized the moratorium for driving business out of the Gulf and costing them their livelihoods.

Carl Rosenblum, an attorney for some of the offshore oil companies, said in Monday’s hearing it was unprecedented that an entire industry should be punished.

“Nothing we are asking for is contrary to safety,” he said, arguing the moratorium will have a domino effect with some companies already eyeing moves to Brazil and Africa rather than sit idle.

On Tuesday, oil spill response coordinator Admiral Thad Allen said a containment system had captured 25,836 barrels of oil from the gushing well head on the sea floor in the last 24 hours, and that more ships and equipment were being brought in to boost the effort.

But BP has admitted the spill will not be permanently capped until it completes two relief wells, with the first set to be finished in August.

In the meanwhile, Allen said options for continuing to contain the spill during a hurricane were being explored, including siphoning the oil from the well bore through pipelines to nearby oil platforms in the Gulf.

“The question of how many of those might be available and the capacity that we could generate is all being looked at right now,” Allen said.

Hurricance concerns

At present, it would take at least 10 days to demobilize – with the well gushing unchecked – and then restart containment operations if a hurricane moved into the area, he said.

US officials estimate between 35,000 and 60,000 barrels are pouring into the Gulf each day, but an internal BP document released by a US lawmaker Monday showed the firm contemplated a worst-case scenario of as much as 100,000 barrels, or 4.2 million gallons, a day.

The previous largest US oil spill, the Exxon Valdez disaster of 1989, saw a total of nearly 11 million gallons spilled off the Alaskan coast.

Using the low end of the US estimate, more than 90 million gallons have now spewed into the Gulf of Mexico.

BP said it has spent two billion dollars so far on cleaning up the spill and compensating residents and businesses that face ruin nine weeks into the nation’s worst-ever environmental disaster.

On Tuesday it announced it was donating the revenue from the sale of oil recovered from the spill to the National Fish and Wildlife Foundation, which is engaged in preserving and restoring species affected by the spill, and said it was providing NFWF with an immediate donation of five million dollars.

Whole swathes of fishing areas have been closed off in the wake of the spill and Allen said US Coast Guard ships had been forced to send fishing boats violating the ban back to shore.

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