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World News

Snap Analysis - No quick relief for oil drillers after ruling

WASHINGTON (Reuters) - A U.S. judge’s ruling lifts the Obama administration’s six-month moratorium on deepwater drilling for oil but court appeals and other factors could delay the resumption of exploration activity.

Judge Martin Feldman went to great lengths to criticise the moratorium imposed after the April 20 explosion at the Deepwater Horizon oil rig, noting the irreparable economic harm to workers who operate the drilling rigs as well as the communities that support them.

Several factors could delay action:

* It will take time and resources to litigate the case as it moves through the appeals process. The administration will probably have to ask for a stay of the lower court ruling while it pursues the appeal, a request that is not always granted despite the broad ramifications of Feldman’s decision.

*Obama administration officials could also try to justify the moratorium by crafting a new, narrower suspension of drilling activity.

* Companies might not be quick to commit to put the money and time into drilling while the decision is being appealed, especially if at any stage a court were to rule against them.

Additionally, the Interior Department has issued new safety and environmental rules for the drilling companies before they could resume exploring and developing new oil and gas wells.

The rules require companies, in part, to certify that they have working blow-out preventers to avoid oil spills, conduct at least two tests of cement barriers in underwater wells and follow new casing installation procedures.

* Alaska Republican Senator Lisa Murkowski said that the ruling threatened to bog down the industry rather than help it because the matter would be gummed up in lengthy and contentious litigation.

“In fact, if you’ve got litigation ongoing, that’s probably going to take you far beyond your six-month” moratorium, said Murkowski, the senior Republican on the Senate Energy and Natural Resources Committee.

Reporting by Jeremy Pelofsky, Tom Doggett and Richard Cowan, editing by Howard Goller

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