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U.S. Issues New Deepwater Drilling Suspension

By Rachel Loftspring

On July 12, Secretary of the Department of the Interior, Ken Salazar, issued a decision memorandum directing a new suspension of certain offshore drilling and permitting activity in the Gulf of Mexico and Pacific regions.  This order was made pursuant to 30 C.F.R. § 250.172(b)-(c), which, in pertinent part, provides that suspensions may be ordered when activities “pose a threat of serious, irreparable, or immediate harm or damage” to human or animal “life . . ., property, any mineral deposit or the marine, coastal, or human environment” or “[w]hen necessary for the installation of safety or environmental protection equipment.”

Mr. Salazar’s order comes approximately six weeks after his similar May 28 drilling suspension of all operations in water more than 500 feet deep for a six month period.  That suspension was preliminarily enjoined on June 22 by Judge Martin Feldman of the United States District Court for the Eastern District of Louisiana.  (See June 23 Corporate Environmental Lawyer post by Allison Torrence).  On appeal by the Department of the Interior, the Fifth Circuit Court of Appeals affirmed Judge Feldman's ruling.  

The new suspension bans drilling of wells that include subsea blowout preventers (BOPs) or surface BOPs on a floating facility, rather than banning drilling in water more than 500 feet deep, as in the original suspension.  It also orders suspends any pending or future applications for permits to drill wells using subsea BOPs or surface BOPs on a floating facility.  The suspension is scheduled to be lifted on November 30, 2010, subject to modification if “the significant threats to life, property, and the environment…have been sufficiently addressed.”

According to Mr. Salazar, the new suspension complies with Judge Feldman's decision and reflects new evidence about safety concerns, the ability of industry equipment to control blowouts, and spill response capabilities.  Thirty-three deepwater rigs are directly affected by the suspension.  Challenges to the new ban, including from Hornbeck Offshore Services, the drilling rig owner that successfully challenged the initial ban, are expected.

Click here to read the July 12 decision memorandum issued by the Department of the Interior.