B. Arbitrary and Capricious
The federal moratorium expansively suspends all pending,
current or approved drilling operations of new deepwater wells in
the Gulf of Mexico and in the Pacific for six months. As declared
by the MMS, “deepwater” is defined as depths greater than 500 feet.
The Secretary based his decision on a finding that new deepwater
wells pose an unacceptable risk of serious and irreparable harm to
life and property and a finding that the installation of additional
safety or environmental protection equipment is necessary to
prevent injury or loss of life and damage to property and the
environment. The government also suggests that the Secretary’s
decision was influenced by a concern that the government’s
resources, stretched thin by the oil spill, could not cope with
another blowout were one to occur.
After reviewing the Secretary’s Report, the Moratorium
Memorandum, and the Notice to Lessees, the Court is unable to
divine or fathom a relationship between the findings and the
immense scope of the moratorium. The Report, invoked by the
Secretary, describes the offshore oil industry in the Gulf and
offers many compelling recommendations to improve safety. But it
offers no time line for implementation, though many of the proposed
changes are represented to be implemented immediately. The Report
patently lacks any analysis of the asserted fear of threat of
irreparable injury or safety hazards posed by the thirty-three
permitted rigs also reached by the moratorium. It is incidentspecific
and driven: Deepwater Horizon and BP only. None others.
While the Report notes the increase in deepwater drilling over the
past ten years and the increased safety risk associated with
deepwater drilling, the parameters of “deepwater” remain confused.
And drilling elsewhere simply seems driven by political or social
agendas on all sides. The Report seems to define “deepwater” as
drilling beyond a depth of 1000 feet by referencing the increased
difficulty of drilling beyond this depth; similarly, the shallowest
depth referenced in the maps and facts included in the Report is
“less than 1000 feet.” But while there is no mention of the 500
feet depth anywhere in the Report itself, the Notice to Lessees
suddenly defines “deepwater” as more than 500 feet.
Of course, the present state of the Administrative Record
includes more than the Report, the Notice to Lessees, and the
Memorandum of Moratorium. It includes a great deal of information
consulted by the agency in making its decision. The defendants have
submitted affidavits and some documents that purport to explain the
agency’s decision-making process. The Shallow Water Energy Security
Coalition Presentation attempts at some clarification of the
decision to define “deepwater” as depths greater than 500 feet. It
is undisputed that at depths of over 500 feet, floating rigs must
be used, and the Executive Summary to the Report refers to a
moratorium on drilling using “floating rigs.” Other documents
submitted summarize some of the tests and studies performed. For
example, one study showed that at 3000psi, the shear rams on three
of the six tested rigs failed to shear their samples; in the follow
up study, various ram models were tested on 214 pipe samples and
7.5% were unsuccessful at shearing the pipe below 3000psi. How
these studies support a finding that shear equipment does not work
consistently at 500 feet is incomprehensible. If some drilling
equipment parts are flawed, is it rational to say all are? Are all
airplanes a danger because one was? All oil tankers like Exxon
Valdez? All trains? All mines? That sort of thinking seems heavyhanded,
and rather overbearing.
The Court recognizes that the compliance of the thirty-three
affected rigs with current government regulations may be irrelevant
if the regulations are insufficient or if MMS, the government’s own
agent, itself is suspected of being corrupt or incompetent.10
Nonetheless, the Secretary’s determination that a six-month
moratorium on issuance of new permits and on drilling by the
thirty-three rigs is necessary does not seem to be fact-specific
and refuses to take into measure the safety records of those others
in the Gulf.11 There is no evidence presented indicating that the
Secretary balanced the concern for environmental safety with the
policy of making leases available for development. There is no
suggestion that the Secretary considered any alternatives: for
example, an individualized suspension of activities on target rigs
until they reached compliance with the new federal regulations said
to be recommended for immediate implementation. Indeed, the
regulations themselves seem to contemplate an individualized
determination by authorizing the suspension of “all or any part of
a lease or unit area.” 30 C.F.R. §250.168. Similarly, OCSLA permits
suspension of “any operation or activity . . . pursuant to any
lease or permit.” 28 U.S.C. §1334(a)(1). The Court cannot
substitute its judgment for that of the agency, but the agency must
“cogently explain why it has exercised its discretion in a given
manner.” State Farm, 463 U.S. at 48. It has not done so.12
The Deepwater Horizon oil spill is an unprecedented, sad, ugly
and inhuman disaster. What seems clear is that the federal
government has been pressed by what happened on the Deepwater
Horizon into an otherwise sweeping confirmation that all Gulf
deepwater drilling activities put us all in a universal threat of
irreparable harm. While the implementation of regulations and a new
culture of safety are supportable by the Report and the documents
presented, the blanket moratorium, with no parameters, seems to
assume that because one rig failed and although no one yet fully
knows why, all companies and rigs drilling new wells over 500 feet
also universally present an imminent danger.
On the record now before the Court, the defendants have failed
to cogently reflect the decision to issue a blanket, generic,
indeed punitive, moratorium with the facts developed during the
thirty-day review. The plaintiffs have established a likelihood of
successfully showing that the Administration acted arbitrarily and
capriciously in issuing the moratorium.
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