Second Oil Rig Explosion Renews Debate on Offshore Drilling

The Mariner Energy Resources (ME) oil rig explosion in the Gulf of Mexico Thursday ripped open the debate again over whether a six-month moratorium on deepwater oil drilling should be extended and expanded.

Following the explosion on the Vermillion oil rig off the coast of Louisiana, environmental groups renewed their calls for the federal government to maintain and possibly widen the ban, while advocates to remove it were more circumspect. Sensitivity over the deepwater drilling ban runs high, given it was only recently that the worst oil spill in U.S. history was capped after spewing nearly 5 million barrels of crude into the Gulf.

"How many times are we going to gamble with lives, economies and ecosystems? It's time we learn from our mistakes and go beyond oil," said John Hocevar, oceans campaign director for Greenpeace USA, in an email interview.

Drilling Ban Didn't Affect Rigs Like Vermillion

Some members of Congress, however, have supported lifting the ban, among them Sen. Mary Landrieu (D-La.), but following the explosion Thursday, they appeared to be taking more of a wait-and-see approach.

"We have no comment at this time, because we're waiting for all the facts to come in," says a spokesman for Landrieu.

The Department of Interior first established a temporary ban on deepwater oil drilling on July 12. The current moratorium is set to expire on Nov. 30. The explosion Thursday involved a production rig, not an oil driller, and occurred in much shallower water.

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"This was an oil and gas production platform in approximately 340 feet of water, 102 miles offshore Louisiana, operated by Mariner Energy Resources," said a spokeswoman for the Department of Interior. "This platform was authorized to produce oil and gas at this water depth."

Although the spokeswoman declined to comment further, one source noted that the Department of Interior's ban did not apply to the Vermillion platform. "[It's] too soon to comment on what, if any, impact this would have on the moratorium," said the source. The Department of Interior also has responsibility for deciding when to lift the ban.

Judge Again Takes Aim at Moratorium

Interior Secretary Ken Salazar is seeking input from the public about deepwater drilling safety reforms, well containment and oil spill response, in an effort to decide whether modifications in the scope or duration of the ban should be made.

"We think all offshore oil drilling should be banned, not just the deepwater drilling," says Jackie Savitz, senior campaign director for environmental group Oceana, following the Vermillion explosion. "Even oil spills in shallow water are bad. It doesn't have to be in deep water to be a disaster."

Meanwhile, the government's effort to maintain its ban is losing ground in court.

On Wednesday, a federal judge took the government's moratorium down a notch, according to a report in The Wall Street Journal. U.S. District Court Judge Martin Feldman, who struck down a similar ban earlier, issued a thumbs down to the government's request to throw out a lawsuit brought by oil companies seeking to challenge the ban. But even prior to the court's ruling on Wednesday, the Obama administration was already signaling it may be willing to entertain lifting the ban earlier than its Nov. 30 expiration date.

This latest explosion, however, could potentially rip this idea to shreds.

DailyFinance reporter Jonathan Berr contributed to this report.