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Off shore drilling in the Gulf will continue…sort of

Late this afternoon the United States Circuit Court of Appeals for the Fifth Circuit dealt the Obama administration another blow. Obama’s drilling moratorium in the Gulf which had been declared “illegal” by United States District Court Judge Martin Feldman has now been declared to be “illegal” by the Fifth Circuit.

This, of course, is good news for all who make their livelihood in that industry…from the people who work on the rigs to the people who work in the refineries, to the people who earn their living from those who work on the rigs and who work in the refineries.

Actually, it’s also good news for the American taxpayer.  6% of our nation’s annual GDP comes from Gulf oil production, as does 30% of the oil consumed in this country, not to mention the millions of dollars each year that is paid to the government in the form of royalties from those businesses that drill oil in the Gulf.

But, most rigs have not returned to the Gulf to resume drilling even though Judge Feldman initially lifted the moratorium over two weeks ago, and, they may not now.  Why?

After Feldman overturned the moratorium in June, [Secretary of the Interior] Salazar announced he would issue a new, refined moratorium that reflects offshore conditions. [And, after today’s ruling]Gray, the [Department of] Justice lawyer, said Salazar was still considering crafting a new moratorium.

As Jim would say, that’s certainly stepping on the oxygen hose. 

Well, what the hey, who needs millions in annual royalties, one third of our annual oil consumption and, 6% of our annual GDP anyway.

The BP oil disaster is just that, a disaster.  But, we don’t ban all automobiles because a multi-car pile up on the interstate kills many, or ban all airplanes because a plane crash kills all.  Common sense must govern our decisions.

Somewhere along the line it appears to me, at least, that this administration has forgotten common sense.

Obama administration kills both exports and jobs

In his State of the Union Address in January, President Obama declared that the United States needs to increase exports to other countries.  And, of course, he declares repeatedly that we must increase employment in this country.  Yet last Thursday, the administration, with one stroke of the pen, announced a decision that does neither.

Bucyrus International, a South Milwaukee based company was prepared to sign an agreement with Reliance Power, Ltd., an Indian company, to supply over $600 million worth of coal mining equipment to Reliance.  Reliance needs this equipment to supply coal to a power plant now under construction in India which is scheduled to open in 2012.  And, Bucyrus needs the agreement to employ almost 1000 employees.  To finalize the agreement, however, a loan guarantee was needed from the U.S. Export-Import Bank, a federal agency that is supposed to be promoting exports.

The Bank, at the urging of both the Treasury and State Departments, said no.  Why, you ask?

Mr. Hochberg [one of the two democratic members of the three person Export-Import Board] said: “President Obama has made clear this administration’s commitment to transition away from high-carbon investments and toward a cleaner energy future.” He said he voted against the guarantees, which would lower the cost of financing for Reliance, because of the “projected adverse environmental impact.”

To which Reliance responded, fine with us.  The power plant is already under construction and will open as scheduled in 2012.  We will now purchase the needed equipment from China or Belarus.

So much for $600 million and 1000 jobs…  Then again, this decision does seem to fit nicely with the administration’s oil drilling moratorium.

Gulf drilling moratorium: Part deux

As you know, Federal District Court Judge Martin Feldman on Tuesday issued an injunction prohibiting the government from enforcing its broad six month moratorium on drilling in the Gulf.  But, the saga goes on.

Later that day, Secretary of Interior Ken Salazar, in testimony before Congress, advised that he would soon be issuing a new, and better version of the moratorium.  So, Hornbeck Offshore Services (the “lead” plaintiff in the case before Judge Feldman) went back before Judge Feldman to seek an order telling the government that, Salazar’s remarks notwithstanding, the moratorium has been lifted, and drilling may commence.  Meanwhile, the government filed a motion before Judge Feldman asking that the moratorium be left in place while the government appeals Feldman’s Order.

Today, Judge Feldman denied the government’s request, and thus, there is no more moratorium.

The part that caught my attention, however, was a piece of the government’s argument explaining why the moratorium should stay in place.

Interior Secretary Kenneth Salazar, in addition to appealing the court’s decision, “will undertake a process to issue a new suspension decision,” the U.S. said in court papers filed with the request for a stay. This would reflect “information learned since the original decision” and provide “further explanation of the need for a pause in deepwater drilling operations,” according to the filing.

What could the government possibly have learned between Tuesday and today?  And, if the word “decision” in the above quote refers to the original decision to impose the moratorium, why didn’t the government bring that important “information” to the court’s attention before Tuesday’s ruling?

It’s not nice to “fool” with a Federal District Court Judge.  As an Assistant United States Attorney, had I done what what Secretary Salazar did, I would be posting this from a jail cell.

Federal Court lifts drilling moratorium-UPDATE: Hinderaker weighs in

Today a Federal District Court Judge  in Louisiana lifted Obama’s 60 day drilling moratorium that prohibited all drilling in the Gulf of Mexico at depths greater than 500 feet of water.  From what I have seen, the judge was singularly unimpressed with virtually all aspects of the governments argument. Read more

Mississippi Governor Haley Barbour on drilling – don’t stop

Well here’s the question of the day. Should we stop deep water drilling until the cause of the New Horizon rig explosion is known? Two Gulf Governors say no. Read more