Court of Appeals Rules Against Obama Offshore Ban

The Obama administration lost its second legal bid to ban offshore deepwater drilling in the Gulf of Mexico for six months. An appellate court supported the ruling of Judge Martin L.C. Feldman of U.S. District Court in New Orleans that the ban was too broad. It also punished oil companies with strong safety records, Feldman said. The original suit was brought by Hornbeck Offshore Services and several companies in similar businesses.

A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit supported a case against the Interior Department, which had imposed the ban. The court ruled only two hours after hearing final arguments. The Obama administration said it would issue a new ban with language different from the one that the courts ruled against.

Many of the rig operators and their suppliers will probably not resume work until the matter is fully resolved. They are losing money while they suspend operations, but worry that a new government ban will shutter their operations again. The reworded ban will almost certainly end up in court, which means an ultimate resolution could be weeks or months away.