Gulf Spill Update: Gulf States Suffer Under De Facto Drilling Ban

Mike Brownfield / July 08, 2010

The Gulf states thought they finally caught a break last month when a federal judge struck down the Obama administration’s deep-water oil drilling ban, but it turns out they were wrong. With the federal government holding all the cards, a de facto ban on drilling continues, as does the economic harm to the region.

Today, a three-judge panel from the 5th U.S. Circuit Court of Appeals will hear arguments on the lower court decision, with the Obama administration seeking to reinstate the ban and oil companies looking to uphold the prior ruling. But as The Times-Picayune reports, it could take months for the court to make a final decision, during which time Louisiana – and other Gulf states – will remain in a moratorium limbo.

Though there is no official moratorium in place right now, the de facto moratorium exists through a combination of government-fueled uncertainty in the industry, legal rigamarole, and bureaucratic red tape. According to reports, the federal government’s plan to issue a second moratorium “has effectively ‘chilled’ the oil industry,” and the government may be dragging its feet on the appeals process in order to prolong the virtual ban. On top of that, the U.S. Department of Interior can further the de facto moratorium “through tough new safety regulations and by extending the time it takes to review drilling applications.” (more…)