White House gets knuckles rapped over six-month drilling freeze

A judge says Obama's moratorium is 'invalid'. So they're planning another one.

Last Updated: 31 Aug 2010

In dealing with

the aftermath of the Gulf of Mexico oil spill, President Obama and his White House team have played fairly fast and loose with due process: there have been all kinds of unilateral decisions, including the apparently arbitrary $20bn compensation pot that BP has been strong-armed into handing over (can’t see them getting much of that back if it isn’t all spent on the clean-up, can you?)

Now a US federal judge has overturned one of those decisions – a proposed six-month ban on all deep-sea drilling in the Gulf. The White House says it will appeal, and if that doesn't work, simply produce a new order. But it highlights the essential problem here: deep-sea drilling is a risky business, but the alternative is a rapid dwindling in the oil supply consequent large increase in the price of energy. Just what a global economy shakily emerging from a massive recession doesn’t need, in other words.

The US government's theory in imposing this moratorium was that the industry as a whole has serious safety issues to address in the Gulf, and that the moratorium would concentrate their minds on sorting them out. Since almost all the oil majors seem to have been relying on generic disaster recovery plans clearly copied and pasted from somewhere else (hence references to the previously-unknown Mexican walrus, penguins and a dead ecologist), that's not an entirely unreasonable view. However, the judge decided that such a lengthy ban was invalid and unjustifiable, given the likely negative impact on local businesses.

So - a clear case of the judiciary putting the White House in its place, and reminding it of the limits of its authority? Well, if it was intended that way, it hasn't had the desired effect: US Interior Secretary Ken Salazar insisted today that a ban was the right decision, and he'd just order a new moratorium if needs be. In other words: yah boo sucks to you, Your Honour.

The judge's ruling will have gone down well with the big oil companies, of course, who have been complaining loudly about the ban (arguing that it's only BP who ever cut corners, natch). But it will also have cheered local business who depend - one way or the other - on the industry. And perhaps the most significant factor, in the judge's view, was 'the critical present-day aspect of the availability of domestic energy in this country.' In other words, the gas-guzzling US needs deep-sea oil.

Not that anyone in the White House is going to take BP's view on this seriously, but its chief of staff Steve Westwell got it right in his comments to the World Oil Companies Congress yesterday (from which his boss Tony Hayward was notably absent): 'The world does need the oil and the energy that is going to have to come from deep water production.'

It's a risky and dangerous endeavour, requiring careful oversight. But without it, we're going to run out before too long. We never said this would be easy…

In today's bulletin:

Budget 2010: Can the private sector pick up the slack?
Kesa Electricals back in the black on white goods
White House gets knuckles rapped over six-month drilling freeze
Incentivise investors, not just entrepreneurs, says Richard
Employers face sickie spike for England match

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