The Obama Administration will seek to reinstate a moratorium on deep water drilling blocked Tuesday by a U.S. District Court judge in an opinion that revealed a shocking lack of substance in the Department of Interior’s arguments for the moratorium. As Judge Martin L.C. Feldman wrote (ruling is here):

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.

Interior Secretary Ken Salazar responded in a statement, saying: “The decision to impose a moratorium on deepwater drilling was and is the right decision. The moratorium is needed to protect the communities and the environment of the Gulf Coast, and DOJ is therefore appealing today’s court ruling.”

This time Interior will presumably attempt to supply more factual basis for its far-reaching moratorium. The issue will certainly arise this morning when Secretary Salazar testifies at a Senate Appropriations subcommittee hearing on reorganizing the Minerals Management Service.

We’ll be very interested in whether the Administration acknowledges the economic damage the moratorium does to the Gulf Coast economy, which has already — obviously — been terribly harmed by the oil spill. As this Reuters report notes, perhaps 50,000 jobs are threatened by the moratorium. Why exacerbate the damage?

The White House last week kicked off its “Recovery Summer,” a series of public events to showcase the Administration’s leadership in helping to revive the ec0nomy and create jobs. The White House blog declared, “Let the Summer of Recovery begin!”

Tough to reconcile the messages here: As we wreck 50,000 jobs, let the Summer of Recovery begin!

From the President’s State of the Union address:

[To] create more of these clean energy jobs, we need more production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in this country. (Applause.) It means making tough decisions about opening new offshore areas for oil and gas development. (Applause.) It means continued investment in advanced biofuels and clean coal technologies. (Applause.) And, yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America. (Applause.)

Very positive words on nuclear power. Now let’s see the permitting and political muscle from the Administration to move those “safe, clean nuclear power plants” to reality.

As for a comprehensive climate bill, passage seems increasingly unlikely in 2010. What is possible is a power play by the imperial EPA — the Administration — to impose a regulatory regime to limit greenhouse gas emissions, a policy decision that correctly belongs with Congress.

The President did not mention the EPA in his speech last night.

President Obama is certainly right in saying it’s time for “making tough decisions about opening new offshore areas for oil and gas development.”

And yet, the Minerals Management Service just signalled that the agency would delay action on Outer Continental Shelf energy development 50 miles beyond Virginia’s coast. From Reuters, “Virginia senators slam delay in offshore drilling:

WASHINGTON (Reuters) – Virginia’s two U.S. senators on Wednesday urged the Obama administration to carry out a previous plan to lease almost 3 million acres (1.2 million hectares) in federal waters off the state’s coastline to oil and natural gas companies.

The lawmakers said in a letter to U.S. Interior Secretary Ken Salazar that recent comments by a department official that the Virginia lease sale originally planned for late 2011 would be delayed until 2012 at the earliest are frustrating given that drilling creates jobs and needed energy supplies.

President Obama clearly acknowledged the critical economic importance of energy development in his State of the Union address on Wednesday. To demonstrate his seriousness, to stimulate economic growth and create jobs, it’s time to actually make and implement “tough decisions about opening new offshore areas for oil and gas development.”

UPDATE (5:15 p.m.): Jane Van Ryan at the American Petroleum Institute has reaction from Virginia Gov. Bob McDonnell and more on the possible delay of OCS energy development, “Will DOI delay Virginia’s offshore drilling?“

Leading up to the State of the Union address…

• USA Today, “Obama’s theme tonight: Jobs“
• Reuters, “US Govt pushes any drilling off Virginia past 2011“

David Holt, president of the Consumer Energy Alliance, issued a statement reacting to the news that the Interior Department will continue to delay the long-scheduled offshore energy lease sale in areas 50 miles off the Virginia coast:

When the governor of the commonwealth of Virginia asks the federal government to partner with his administration in an effort to convert the abundant reserves of energy off his shores into jobs, revenue and energy security for Virginians, you’d hope to see a sensible process move forward. If news today out of MMS is any indication, the federal government appears ready to delay that critical work for at least another year, meaning additional delays in creating jobs, reducing energy costs and getting the U.S. economy moving again.

The Administration should do more to show that it recognizes the tremendous economic opportunity that safe and responsible offshore energy exploration presents to the citizens of Virginia, and the nation at large.

We’re talking about thousands of high-wage jobs here, and billions in annual revenue that can be raised without imposing a single new tax. When it comes to promoting alternative energy resources offshore, the Administration has compiled an impressive record – and we applaud those efforts. This announcement signals that the Administration may not be looking to maximize our nation’s enormous oil and gas potential offshore with the same enthusiasm.  Those who support a balanced, commonsense national energy strategy look forward to continuing to work with the Administration to create jobs, improve our national and energy security and responsibly allow access to our abundant resources.

In February, Secretary of Ken Salazar extended the public comment period on the Minerals Management Service’s draft five-year program for Outer Continental Shelf oil and natural gas leases. As MMS explained:

The MMS is seeking comment on all aspects of the new program including energy development and economic and environmental issues in the OCS areas. Comments are also requested on the specific subjects of size, timing, and location of sales and on the issues of buffer zones, revenue-sharing, and the use of unitization to limit the number of structures. The public comment period is open until September 21, 2009…

So Monday is the deadline. The NAM has put together an online form that allows you to submit comments to the MMS, making this point:

[A] large-scale expansion of access to the OCS will reduce our dependence on energy imports. It will also serve as a key pillar for a comprehensive energy plan for which manufacturers have been campaigning for several years.

The American Petroleum Institute also has background materials available here on API’s Energy Tomorrow website. You can go directly to the MMS Web site to submit a comment.

We constantly stress the principle of energy security, that is, building U.S. economic resilience by robust development of all our energy resources. And let’s not forget jobs. A recent PricewaterhouseCoopers study found that the oil and natural gas industry supports more than nine million American jobs and contributed $1 trillion to the economy in 2007. More details about the study are available at the Energy Tomorrow posts here and here.

A model for future leasing, now that the OCS moratorium has expired:

From the Minerals Management Service:

NEW ORLEANS – The Department of the Interior’s Minerals Management Service (MMS) has proposed that oil and gas Lease Sale 208 for the Central Gulf of Mexico Planning Area be held March 18, 2009. The Notice of Availability of the Proposed Notice of Sale (PNOS) was published in the Federal Register on Friday, October 3.

The proposed sale encompasses approximately 6,200 unleased blocks covering more than 33.5 million acres offshore Louisiana, Mississippi, and Alabama. This area includes 5.8 million acres, known as the 181 South Area, that will be offered for lease for the first time since 1988. “What makes Sale 208 noteworthy is the addition of the 181 South Area,” said MMS director Randall Luthi. “The states of Alabama, Mississippi, Louisiana, and Texas will share in all revenue from leases in this new area.”

The Gulf of Mexico Energy Security Act of 2006 mandated that the 181 South Area, approximately 5.8 million acres located in the southeastern part of the Central Planning Area, be offered for lease, and that the four Gulf producing states share in the revenues. 

According to MMS estimates, the proposed lease sale could result in production of approximately 0.807 to 1.336 billion barrels of oil and 3.365 to 5.405 trillion cubic feet of natural gas. But…

Two steps forward, six steps back, six steps back:

The darkening economic outlook may force lawmakers to delay some public policy priorities, but two House Democrats indicated Tuesday that curbing global warming won’t be one of them.

House Energy and Commerce Committee Chairman John Dingell (D-Mich.) and Energy and Air Quality subcommittee Chairman Rick Boucher (D-Va.) released a 461-page bill that seeks to cut greenhouse gas emissions by roughly 80 percent over the next four decades. Environmental groups welcomed that target, but criticized the bill, which Dingell and Boucher refer to as a “discussion draft,” for delaying dramatic emissions reductions until after 2020.

Wall Street Journal, “Early Signs Show Gulf’s Energy Facilities Held Up”

The weakened Hurricane Gustav hit energy-producing facilities that were more rugged and better prepared to resume operations than they were three years ago during Hurricane Katrina.

Turbulent weather prevented a damage assessment Monday, and industry officials cautioned that in previous hurricanes, initial optimism soured when operators began to test equipment.

Houston Chronicle: “With little damage to oil patch, prices dip“:

The oil and gas industry breathed a tentative sigh of relief Monday after preliminary reports suggested Hurricane Gustav did little damage to energy facilities both onshore and off, helping send oil prices sharply downward.

Early updates from Gulf of Mexico drillers and oil and natural gas producers were “very promising,” with no major damage reported, said Lars Herbst, regional director for Minerals Management Service, the Interior Department office that regulates the offshore oil and gas industry.

MMS has more on its homepage. For regular updates, you can’t go wrong with The Oil Drum.