Owner of broken Deepwater Horizon rig criticizes Obama’s ban on deepwater drilling

Tuesday, June 22, 2010

Gulf rig owner criticizes Obama’s drilling halt

NEW ORLEANS — The owner of the offshore rig involved in the massive Gulf oil spill sharply criticized the U.S. government’s six-month ban on deepwater drilling Tuesday.

Transocean Ltd. president Steven Newman told reporters at an oil industry conference in London that there were things President Barack Obama’s administration “could implement today that would allow the industry to go back to work tomorrow without an arbitrary six-month time limit.”

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

A federal judge in New Orleans is considering whether to lift the moratorium, imposed after the disaster began. Judge Martin Feldman said he will decide by Wednesday.

During a two-hour hearing Monday, plaintiffs attorney Carl Rosenblum said the suspension of drilling work could prove more economically devastating than the spill itself.

“This is an unprecedented industrywide shutdown. Never before has the government done this,” Rosenblum said.

Government lawyers said the Interior Department has demonstrated industry regulators need more time to study the risks of deepwater drilling and identify ways to make it safer.

“The safeguards and regulations in place on April 20 did not create a sufficient margin of safety,” said Justice Department attorney Guillermo Montero.

The Interior Department imposed the drilling moratorium as part of the Obama administration’s effort to show it was responding to the disaster. No new permits for deepwater drilling in the Gulf are being approved and drilling at 33 existing exploratory wells has been suspended.

But the lawsuit Feldman is considering, filed by Hornbeck Offshore Services of Covington, La., claims the government arbitrarily imposed the moratorium without any proof that the operations posed a threat. Hornbeck, which ferries people and supplies to offshore rigs, says the moratorium could cost Louisiana thousands of jobs and millions of dollars in lost wages.

During Monday’s hearing, Feldman asked a government lawyer why the Interior Department decided to suspend deepwater drilling after the rig explosion when it didn’t bar oil tankers from Alaskan waters after the Exxon Valdez spill in 1989 or take similar actions in the wake of other industrial accidents.

“The Deepwater Horizon blowout was a game-changer,” Montero said. “It really illustrates the risks that are inherent in deepwater drilling.”

Meanwhile, Kenneth Feinberg, who has been tapped by the White House to run a $20 billion fund set up to help people harmed by the spill, pledged to speed payments.

“We want to get these claims out quicker,” he said. “We want to get these claims out with more transparency.”

Feinberg, who ran the claim fund set up for victims of the Sept. 11, 2001, terrorist attacks, said BP has paid out over $100 million so far. Various estimates place total claims so far at more than $600 million.

BP said it has spent $2 billion fighting the spill for the last two months and compensating victims, with no end in sight. It’s likely to be at least August before crews finish two relief wells that are the best chance of stopping the flow of oil. Scientists estimate the blown-out well has gushed anywhere from 68 million to 126 millions gallons of oil into the Gulf.

Associated Press writers Robert Barr and Jane Wardell in London contributed to this report.

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