NEW ORLEANS/WASHINGTON, (Reuters) – A U.S. judge yesterday blocked the Obama administration’s ban on deepwater drilling, complicating its efforts to improve the safety of offshore oil operations after the worst spill in U.S. history.
The White House said it would immediately appeal the judge’s ruling, issued in New Orleans. Oil companies involved in offshore drilling operations had challenged the government’s six-month moratorium.
A new Reuters/Ipsos poll found that most Americans still support offshore drilling, despite watching a huge slick from BP Plc’s Gulf of Mexico oil spill devastate fragile wetlands and communities along the U.S. Gulf coast.
The possible scale of the ecological catastrophe was underscored when U.S. scientists said as much as one million times the normal level of methane gas has been found in some regions near the spill, enough to deplete oxygen and create a dead zone.
If such dead zones were linked to the spill they could ultimately add to BP’s mounting costs.
The 64-day-old disaster has shattered investor confidence in BP, which has seen its stock price slashed in half since the start of the crisis. The British energy giant’s London share price tumbled to its lowest level in 13 years on Tuesday.
After the BP well ruptured on April 20, spewing millions of gallons of crude, President Barack Obama imposed the ban on deepsea drilling while officials checked that other wells were operating safely.
In granting a request by more than a dozen oil services companies for the ban to be overturned, Judge Martin Feldman challenged its “immense scope.”
The Interior Department, which oversees offshore drilling, said despite the ruling, the firms still had to meet new safety and environmental rules before they could resume operations.
Expanding offshore drilling was among Obama’s proposals to revamp U.S. energy policy. He hoped it would generate support from Republicans for more controversial aspects of his plans to fight climate change.
But he shelved that plan after the spill and White House spokesman Robert Gibbs said Obama believed that “continuing to drill at these depths without knowing what happened does not make any sense.” The administration will probably ask for a stay of the court ruling as it pursues its appeal.
The court’s decision was a victory for offshore energy producers like BP, Chevron Corp and Royal Dutch Shell. They have been hamstrung by the ban, and are considering relocating their giant rigs to other basins like Brazil.
Shares in oil drilling companies briefly spiked after the ruling but dipped again when the Obama administration said it would appeal. The S&P energy sector fell 1.3 percent.
