Judge rejects Obama move on drilling

Judge sides with industry, which opposed six-month moratorium

NBC News and news services

updated 2:02 p.m. ET, Tues., June 22, 2010

NEW ORLEANS - A federal judge Tuesday ruled against the Obama administration's six-month moratorium on deepwater drilling in the wake of the BP oil spill. The White House, which had hoped the ban would provide time to ensure other wells are operating safely, immediately said it would appeal.

The ruling comes in a lawsuit filed by drilling companies to reverse the ban imposed by the  Department of Interior, which halted the approval of any new permits for deepwater drilling and suspended drilling at 33 exploratory wells in the Gulf.

A federal judge in Louisiana granted the drillers' request for a preliminary restraining order that would prevent the ban from taking effect.

Video

Seeing through the smoke on the water June 21: NBC's Kerry Sanders gets a close-up look at the MacGyver-like techniques used to set the controlled fires being used to burn off oil from the BP oil spill.

District Judge Martin Feldman said the Interior Department failed to provide adequate reasoning and that the moratorium seems to assume that because one rig failed, all companies and rigs doing deepwater drilling pose an imminent danger.

White House press secretary Robert Gibbs countered that "continuing to drill at these depths without knowing what happened does not make any sense and ... potentially puts the safety of those on the rigs and the safety of the environment in the Gulf at a danger that the president does not believe we can afford right now."

During a two-hour hearing Monday, plaintiffs' attorney Carl Rosenblum had argued that the suspension could prove more economically devastating than the spill itself. "This is an unprecedented industrywide shutdown. Never before has the government done this," Rosenblum said.

Interior countered that while 33 deepwater drilling sites were affected, there are still 3,600 oil and natural gas production platforms in the Gulf. 

Live video

BP's live stream LIVE VIDEO: This stream is provided by BP and could be interrupted at any time. NBC

The moratorium was declared May 6 and originally was to last only through the month. President Barack Obama announced May 27 that he was extending it for six months.

Earlier Tuesday, the owner of the rig that exploded, causing the spill, criticized the moratorium.

"There are things the administration could implement today that would allow the industry to go back to work tomorrow without an arbitrary six-month time limit," Transocean Ltd. President Steven Newman told reporters on the sidelines of the World National Oil Companies Congress in London.

Transocean owned the Deepwater Horizon rig, which was run by British oil giant BP PLC. An April 20 explosion on the rig killed 11 workers and set off worst oil spill in U.S. history.

Chevron executive Jay Pryor was also critical of the U.S. government's move, saying the drilling moratorium would "constrain supplies for world energy." 

Environment news

GOP all apologies in fight over oil loyalties Chris Hayes, Washington editor of The Nation magazine talks with Rachel Maddow about the rift opened in the Republican Party by Rep. Joe Barton's apology to BP and the group of pro-oil industry conservatives who agree with him.

"It would also be a step back for energy security," said Pryor, global vice president for business development at the U.S. company.

Meanwhile, BP executive Steve Westwell was heckled during his speech at the conference, where he was standing in for embattled chief executive Tony Hayward.

The BP chief of staff was interrupted twice during his address by protesters shouting "we need to end the oil age!" The hecklers were escorted out of the central London hotel by security.

Westwell said Hayward was "genuinely sorry" not to be at the conference, where he had been due to give a keynote address on about the global responsibilities of oil companies.

"He and I both hope you understand his schedule is under incredible pressure at the moment," Westwell told delegates.

Hayward pulled out of the conference on Monday after stinging criticism for spending Saturday at England's Isle of Wight to see his yacht compete in a famous race. That outing drew outrage on the Gulf coast and an acerbic response from the White House.

NBC News reported that Westwell called the Deepwater Horizon disaster "a complex accident caused by an unprecedented combination of failures, including in equipment and human error."

He also said BP had a moral obligation to pay all legitimate claims.

More than 120 million gallons of oil have leaked already from the rig's broken pipe, according to the most pessimistic U.S. government estimates. Oil has been washing up from Louisiana to Florida, killing birds and fish, coating marshes and wetlands and covering pristine beaches with tar balls and oily debris.

A pair of relief wells considered the best chance at a permanent fix won't be completed until August. 

Video

Ruling impact   June 22: NBC's Pete Williams has the details on the drilling decision.

The Associated Press, Reuters and NBC News contributed to this report.