A federal judge in New Orleans is today hearing from service companies arguing that the six-month offshore moratorium on deepwater drilling should be nullified. U.S. District Court Judge Martin Feldman will decide whether a preliminary injunction against the moratorium is warranted. The hearing got under way this morning.

The suit against U.S. Interior Secretary Ken Salazar was first filed by Hornbeck Offshore Services of Covington earlier this month; Bollinger Shipyards Inc. and several offshore services companies controlled by the family of Gary Chouest quickly joined the challenge. The companies claim the government's suspension of drilling at more than 30 exploration wells without any proof that they pose a threat could cost Louisiana thousands of jobs and millions of dollars in lost wages.

Gov. Bobby Jindal also joined the challenge today, filing a friend of the court brief supporting removal of the moratorium. The brief argues that states are entitled to participate in the policy and decision-making process by the federal government on issues relating to the exploration and development of Outer Continental Shelf minerals. The brief states, “Inasmuch as the State of Louisiana was completely ignored by defendants in the establishment of this moratorium for alleged safety reasons, the question arises whether that failure renders Defendants’ action invalid.”

The brief also argues that the Gulf of Mexico Energy Security Act ensures revenues from the Outer Continental Shelf are to be shared with states for specific purposes including mitigating damages to fish, wildlife or natural resources and conservation projects. According the brief, the moratorium does not address the obligations of the federal government to the states via GOMESA. The brief argues that the impact of the moratorium runs counter to the federal government’s obligations and will negatively impact Louisiana’s economy.

View the brief here.

The suit is moving forward today despite the federal government's attempt to delay it until late July. The Times-Picayune reports:

In a handwritten note, U.S. District Court Judge Martin Feldman on Monday [June 14] crossed through the proposed order from the U.S. government and wrote, "Denied. The issues presented are of national significance and to delay resolution would be irresponsible."

The plaintiffs call the Obama administration’s directive to suspend drilling at depths of more than 500 feet “arbitrary, capricious, an abuse of discretion.” They claim the Interior Department recommended the six-month moratorium to President Barack Obama without any legal justification. Indeed, it was later revealed that the panel of experts Salazar turned to for advice did not support the moratorium; those experts also claim Salazar misrepresented their position.

Hornbeck operates a fleet of vessels that haul people and supplies to offshore drilling rigs and production platforms. It serves almost all of the rigs affected by the moratorium.

This story will be updated as information becomes available. For more on the potential impact of the moratorium on the state, click here.

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