Another Embarrassment for the Administration

The Obama administration is having a very bad week. Today, federal judge Martin Feldman issued an order barring the administration from implementing its six-month moratorium on deep-water oil exploration in the Gulf. Judge Feldman reviewed the order under the Administrative Procedure Act. Applying the APA’s standard, Judge Feldman found that the administration’s action was arbitrary and capricious.
Judge Feldman was influenced by the fact that the Obama administration’s order relied heavily on a lie:

In the Executive Summary to the Report, the Secretary [Ken Salazar] recommends “a six-month moratorium on permits for new wells being drilled using floating rigs.” He also recommends “an immediate halt to drilling operations on the 33 permitted wells, not including relief wells currently being drilled by BP, that are currently being drilled using floating rigs in the Gulf of Mexico.” Much to the government’s discomfort and this Court’s uneasiness, the Summary also states that “the recommendations contained in this report have been peer-reviewed by seven experts identified by the National Academy of Engineering.” As the plaintiffs, and the experts themselves, pointedly observe, this statement was misleading. The experts charge it was a “misrepresentation.” It was factually incorrect. Although the experts agreed with the safety recommendations contained in the body of the main Report, five of the National Academy experts and three of the other experts have publicly stated that they “do not agree with the six month blanket moratorium” on floating drilling.

Beyond that, Feldman found that the agency’s order was simply irrational–there was no basis in the record for a blanket prohibition on drilling:

In State Farm, the Supreme Court held the agency’s decision was arbitrary and capricious because the agency had failed to give any consideration to an obvious alternative. Id. at 46-47. That rationale resonates in this dispute.
After reviewing the Secretary’s Report, the Moratorium Memorandum, and the Notice to Lessees, the Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium.
The Report, invoked by the Secretary, describes the offshore oil industry in the Gulf and offers many compelling recommendations to improve safety. But it offers no time line for implementation, though many of the proposed changes are represented to be implemented immediately. The Report patently lacks any analysis of the asserted fear of threat of irreparable injury or safety hazards posed by the thirty-three permitted rigs also reached by the moratorium. It is incident- specific and driven: Deepwater Horizon and BP only. None others.
Other documents submitted summarize some of the tests and studies performed. For example, one study showed that at 3000psi, the shear rams on three of the six tested rigs failed to shear their samples; in the follow up study, various ram models were tested on 214 pipe samples and 7.5% were unsuccessful at shearing the pipe below 3000psi. How these studies support a finding that shear equipment does not work consistently at 500 feet is incomprehensible. If some drilling equipment parts are flawed, is it rational to say all are? Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavy-handed, and rather overbearing.

The Obama administration responded characteristically by slandering Judge Feldman and vowing to appeal. Do they have a shot on appeal? I think they do. The record as presented to the trial court was thin, and the administration’s misrepresentation about the experts’ endorsement of their plan obviously hurt. But the 5th Circuit Court of Appeals, to which the appeal will be taken, could well conclude that the magnitude of the Deepwater Horizon disaster is such that the Department of the Interior’s ruling is justified even if it is supported by no detailed fact-finding, and even if it was based on an attempt to deceive the American people.

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