Obama loses drilling moratorium appeal

The Obama administration lost its bid to keep a six-month freeze on offshore drilling.

The Obama administration lost its bid to keep a six-month freeze on offshore drilling,and BP was to outline today its next steps to cap the well gushing oil into the Gulf of Mexico.

A federal judge blocked the deepwater drilling moratorium last month after 32 oil companies and local officials argued it was causing irreparable economic harm.

The Fifth Circuit Court of Appeals yesterday denied the administrations emergency request to stay that judges order pending appeal.

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The government failed to show a likelihood of irreparable injury if the stay is not granted, the appeals panel judges wrote in a 2-1 ruling.

The government also made no showing that there is any likelihood that drilling activities will be resumed pending appeal. Interior Secretary Ken Salazar has said he will soon issue a new order to block deepwater drilling regardless of how the court ruled,and oil companies have not resumed operations due to the legal uncertainties.

The court noted that Salazar has the right to apply for emergency relief if he can show that drilling activity by deepwater rigs has commenced or is about to commence. Louisiana Governor Bobby Jindal hailed the courts decision but expressed concern that the uncertainty has created a de facto moratorium which could cost the state 20,000 jobs.

The federal government has an entire agency dedicated to monitoring safe drilling, Jindal said in a statement.