Judge To Hear Bid To Overturn Drilling Moratorium

A federal judge in New Orleans holds a hearing Monday on the oil industry's challenge to the administration's six month moratorium on drilling new wells in the Gulf of Mexico. Oil companies say the Interior Department has no authority to shut down an entire industry, and the moratorium could cripple their operations for months even after it's lifted.

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RENEE MONTAGNE, host:

It's MORNING EDITION from NPR News. Im Renee Montagne.

STEVE INSKEEP, host:

And Im Steve Inskeep. Good morning.

The near future of deepwater oil drilling in the Gulf of Mexico goes before a federal judge today. President Obama's administration imposed a six-month moratorium on new deepwater drilling.

MONTAGNE: That order becomes the subject of a court hearing today. Businesses that make a living off oil exploration say they can't wait that long. They say the delay could destroy their industry.

INSKEEP: NPR's Robert Smith reports from New Orleans.

ROBERT SMITH: The lawsuit is attempting to save a certain ecosystem in the gulf - not the biological kind, but a business ecosystem of thousands of interdependent companies that thrive off of new drilling.

Mr. BRYAN CHAISSON (COO, NREC Power Systems): It is a complicated web.

SMITH: Bryan Chaisson runs a diesel engine repair yard in Houma, Louisiana. He's one of the little fish feeding off the big fish: the oil rigs.

Mr. CHAISSON: You have your fuel companies that live off of them...

SMITH: And shipping companies, which take their bite.

Mr. CHAISSON: ...steel fabricating companies, pipe companies...

SMITH: And the guys who supply the rope, soap and dope, as they say. Then there's Chaisson's engine repair shop.

Mr. CHAISSON: No drill ships to drill, the vessels have no place to work; vessels dont work, they dont break - nothing for me; nothing for everyone.

SMITH: Since the oil spill and the new deepwater drilling moratorium, things have been tough around here for the oil industry. There are still thousands of working wells in shallow water, pumping out oil. And there's dozens of already drilled deepwater wells. But the moratorium is halting 33 lucrative, labor-intensive drilling projects in deepwater.

Chaisson walks me around his shop, called NREC Power Systems. Ship engines as big as a minivan wait to be refurbished, but the place is quiet.

Just birds chirping. That is not the sound a business owner wants to hear in his factory.

Mr. CHAISSON: Thats correct. Normally, there's 110 employees here. Since the oil spill, Im down to 70.

SMITH: The web of oil businesses is unraveling, Chaisson says. And in court this morning, oil service companies will have to prove that it's not coming back.

Mr. SAM GIBERGA (Senior Vice President, Hornbeck Offshore Services): This lawsuit is really not about money at all.

SMITH: Sam Giberga is the general counsel of Hornbeck Offshore Services, one of the companies suing the Obama administration. Giberga says the moratorium on new deepwater drilling will cause the very expensive rigs, and the ships that serve them, to flee the gulf.

Mr. GIBERGA: These deepwater drilling rigs work under multiyear contracts, so once they leave, they leave for a long time. They are in very high demand around the world.

SMITH: The clock is ticking, theyll argue in court. If the moratorium stays, the rigs leave. And who knows if engine repair yards like Chaisson's will still be there when the rigs come back

Lawyers for the Obama administration call all of this pure speculation. Derb Carter is with the Southern Environmental Law Center, which is helping to defend the moratorium in court. Carter says that closing 33 drilling projects doesnt mean that oil isnt still flowing from thousands of wells.

Mr. DERB CARTER (Director, Southern Environmental Law Center): This is a very small part of the oil industry so it's hard, under any stretch, to say that this is going to destroy the oil industry in the Gulf of Mexico.

SMITH: And Carter argues that there is a real, compelling reason to keep the moratorium going.

Mr. CARTER: If there were to be another blowout and leak of this magnitude, there would be no resources available to respond to that spill - because we apparently dont have adequate resources, even, to deal with this particular spill.

SMITH: Federal court Judge Martin Feldman will have to weigh the chances of two different, nightmare scenarios: the potential to cripple an industry, and the potential to have a second oil spill in the gulf.

Bryan Chaisson says the man better decide quickly. Some of the shop's laid-off workers have already left Louisiana to go work on railroad diesel engines in Illinois. And Chaisson says he doesnt want to lose anyone else.

Mr. CHAISSON: I can't pick this place up and move. I've got people I've got to worry about.

SMITH: And there's no shortage of worrying these days in the gulf region.

Robert Smith, NPR News, New Orleans.

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