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Louisiana backs oil industry, wants drilling moratorium thrown out

Louisiana is supporting a lawsuit to overturn the six-month moratorium on deep-water drilling. The ban could cost the local oil industry as much as $330 million a month, the state says.

More than 95 percent of the port's business is related to the oil and gas industry, and some business owners at the port say the six-month moratorium on new permits for deep water drilling may result in layoffs. 

Louisiana Gov. Bobby Jindal is supporting a legal challenge that seeks to reverse President Obama’s six-month moratorium on deepwater oil drilling in the Gulf of Mexico. While the administration has been adamant about pausing all deep-water drilling until the cause of the Gulf oil spill is determined, Governor Jindal says the economic well-being of his state hangs in the balance.

In papers filed Sunday in federal court in New Orleans, Louisiana Attorney General James "Buddy" Caldwell wrote that the state would be “crippled by the Deepwater Horizon disaster” and that it is positioned to lose almost 11,000 direct and indirect jobs in five months.

But legal experts suggest that emergency moratoriums like this one are often difficult to reverse. Companies impacted by the moratorium may have a sound case, but they face an uphill battle against public policy designed to ensure safety and prevent a second calamity, says Robert Weiss, a New York City attorney who is representing people who do not live in the Gulf but have property there in a class action lawsuit against BP.

"If that judge allows drilling again and something happens, he’ll be remembered forever for one thing,” Mr. Weiss says.

Mr. Obama announced the 180-day moratorium May 27, saying the six-month timeline would give a presidential commission enough time to investigate safety issues in deepwater drilling. Hornbeck Offshore Services, an offshore vessel operator in Covington, La., is leading the legal challenge along with 12 other companies. Their claim is that the ban is costing the local petroleum industry between $165 million and $330 million each month in lost revenue.

At a hearing in New Orleans Monday morning, US District Court Judge Martin Feldman said he would rule on whether or not to issue an injunction against the moratorium by Wednesday.

If moratorium is overturned, BP could benefit. The company is becoming more vulnerable to lawsuits seeking damages, even by parties that have no direct connection to the explosion or the oil issuing from the well.

“The moratorium is widening the number of victims dealing with economic loss,” says Robert Jordon, a New York City attorney representing 500 commercial fishermen in the Gulf region in a lawsuit against BP. Mr. Jordon says that the $100 million BP set aside last week to compensate displaced oil rig workers is in jeopardy of being drained by ancillary lawsuits the moratorium may generate.

“If the moratorium is lifted, we can go back to focus on reimbursing people who are directly out of work because of the spill rather than indirectly,” he says

Tagged in: deep-water drilling



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