Sec. Salazar to Reimpose Drilling Moratorium

In response to yesterday’s judicial decision granting a preliminary injunction against the Interior Department’s moratorium on  drilling in the Gulf of Mexico at depths greater than 500 feet, Interior Secretary Ken Salazar announced that in the next “few days” he would issue a new order, reimposing the moratorium and providing a more detailed explanation of why the moratorium is necessary.  One difficulty for Secretary Salazar will be that the draft report reviewed by outside experts on responses to the spill did not call for a six-month moratorium on drilling at depths greater than 500 feet and focused on the risks of drilling at greater than 1,000 feet.  As a consequence, Salazar cannot claim that the drilling ban was called for by experts, nor that the moratorium he imposed follows from his agency’s findings.  As Judge Feldman explained in his opinion:

On May 27, 2010 the Secretary issued a Report, which reviews all aspects of drilling operations and recommends immediate and long term reforms to improve drilling safety. In the Executive Summary to the Report, the Secretary recommends “a six-month moratorium on permits for new wells being drilled using floating rigs.” He also recommends “an immediate halt to drilling operations on the 33 permitted wells, not including relief wells currently being drilled by BP, that are currently being drilled using floating rigs in the Gulf of Mexico.” Much to the government’s discomfort and this Court’s uneasiness, the Summary also states that “the recommendations contained in this report have been peer-reviewed by seven experts identified by the National Academy of Engineering.” As the plaintiffs, and the experts themselves, pointedly observe, this statement was misleading. The experts charge it was a “misrepresentation.” It was factually incorrect. Although the experts agreed with the safety recommendations contained in the body of the main Report, five of the National Academy experts and three of the other experts have publicly stated that they “do not agree with the six month blanket moratorium” on floating drilling. They envisioned a more limited kind of moratorium, but a blanket moratorium was added after their final review, they complain, and was never agreed to by them. A factor that might cause some apprehension about the probity of the process that led to the Report.

The draft reviewed by the experts, for example, recommended a six-month moratorium on exploratory wells deeper than 1000 feet (not 500 feet) to allow for implementation of suggested safety measures. The Report makes no effort to explicitly justify the moratorium: it does not discuss any irreparable harm that would warrant a suspension of operations, it does not explain how long it would take to implement the recommended safety measures. The Report
does generalize that “[w]hile technological progress has enabled the pursuit of deeper oil and gas deposits in deeper water, the risks associated with operating in water depths in excess of 1,000 feet are significantly more complex than in shallow water.”

Given this background, it will be difficult for the Secretary to use the report as the primary basis for reimposing the moratorium.  As Judge Feldman explained in his initial opinion (excerpted here), there does not appear to be a rational relationship between the agency’s findings and the scope of the moratorium.  If a broad moratorium is justified (and it may well be) the agency will have to make additional findings or provide a more coherent justification for why the risks and uncertainty about deepwater drilling justify a more expansive, prophylactic moratorium.  The purpose of this explanation will be to demonstrate that the decision was motivated by reasoned analysis, and not just political considerations.  In this regard, the Secretary’s statement that the moratorium will be reimposed shortly is not particularly helpful, as it suggests the sort of decision-first, analysis-later sort of administrative decision-making that is the hallmark of arbitrary decision-making.

None of this means the Interior Department will be unable to justify the broader moratorium.  It will simply have to provide a fuller explanation for its policy choice and why it prefers an expansive moratorium, as opposed to a more limited set of restrictions, such as a halt to drilling focused on the deepest wells or contingent upon the adoption of additional safety measures at affected installations.  Reasons could include continued uncertainty about the precise causes of the BP spill and the government’s inability to provide adequate review and oversight of other wells while coping with the current spill.  The agency could also seek to appeal the district judge’s ruling, but it is unlikely an appeal would succeed.  Appellate review of a district court’s grant of a preliminary injunction is even more deferential than judicial review of agency action.

Meanwhile, Secretary Salazar has renamed the Minerals Management Service as the Bureau of Ocean energy Management, Regulation and Enforcement.

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