The 5th U.S. Circuit Court of Appeals rejected the government’s effort to reinstate the six-month drilling moratorium while the legal battle over U.S. District Judge Martin Feldman’s June 22 ruling that overturned the ban continues. The appellate court’s decision, which came down late Thursday afternoon in New Orleans, appears to pave the way for drilling to resume during the appeals process. Deepwater activity has been on hold because of the Obama administration’s moratorium, a result of the Deepwater Horizon explosion that killed 11 people and sent oil gushing into the Gulf of Mexico.

The Obama administration is fighting Feldman’s ruling that overturned the moratorium, which halted drilling on 33 exploratory wells and stopped permitting of new wells in Gulf of Mexico water depths of 500 feet or more. Service companies that do business in the Gulf sued the administration, claiming the ban will have devastating economic repercussions.

A hearing on the merits of the appeal is likely to be heard by the three-judge panel of the 5th Circuit in late August or early September.

After Feldman overturned the moratorium, Interior Secretary Ken Salazar said he would rework the moratorium to better reflect offshore conditions — and, apparently, in hopes of fashioning something that will pass legal muster. He has yet to do that.

Gov. Bobby Jindal, who has joined the legal battle to stop the drilling ban, said late Thursday afternoon that the battle is far from over. “We’re pleased the court did not reinstate the moratorium. However, it’s clear from the ruling that this matter is not resolved, and there remains uncertainty about the future of deepwater drilling and thousands of jobs in our state,” he said. “As members of the court pointed out today during the hearing, despite the injunction against the original moratorium, we currently have a de facto moratorium because of uncertainty from the Department of Interior.”

Jindal pointed out that the federal government has an entire agency dedicated to monitoring safe drilling, and it should not take six months or longer for a new national commission to ensure safety measures are in place, and that laws and regulations are being followed.

“Unfortunately, there are serious job losses that will result from the six-month deepwater drilling moratorium, which is estimated to kill 20,000 Louisiana jobs and cost us between $65 to $135 million in lost Louisiana wages each month,” the governor added. “The reality is that the moratorium not only threatens jobs on oil rigs, but it also jeopardizes many other industries that supply our oil and gas industry and the entire communities that depend on them.”

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