From: Mary Rickard and Ernest Scheyder, Reuters
Published June 22, 2010 05:49 AM

Oil firms challenge U.S. deepwater drilling ban

Oil services companies were waiting on Tuesday to see if their legal bid would succeed in overturning a six-month ban on deepwater drilling in the Gulf of Mexico as more fishing areas were closed in response to the worst oil spill in U.S. history.

The ban by President Barack Obama's administration was imposed in response to the explosion aboard an oil rig in the Gulf of Mexico on April 20 that killed 11 workers and ruptured a well owned by BP Plc, unleashing millions of gallons of crude oil and causing an environmental catastrophe.

U.S. District Court Judge Martin Feldman promised he would decide by Wednesday whether to temporarily lift the ban while the case is heard. More than a dozen companies involved in offshore drilling operations filed the lawsuit, calling the ban "arbitrary and capricious."

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"The government's unchecked authority has shut down this entire industry," argued lawyer Carl Rosenblum, representing the oil industry.

The lawsuit is the first seeking to reverse Obama's May 27 moratorium, which the companies say will force job cuts in the labor force needed to service offshore oil platforms. The ban has caused the shutdown of 33 deepwater drilling rigs.

The Obama administration argues that the moratorium is necessary to prevent further accidents while a presidential commission investigates what caused the BP well to rupture.

The spill, now in its 64th day, has soiled the coasts of four U.S. states, threatening tourism and fishing industries. It has seeped into ecologically sensitive wetlands and tested Obama, who has come under fire for his handling of the crisis.

Article continues: http://www.reuters.com/article/idUSN1416392020100622

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