State and local governments claim economic hardship over Obama's drilling moratorium

Steve Korris Mar. 4, 2011, 1:00pm


NEW ORLEANS – States and local governments blaming oil company BP for damage from the Deepwater Horizon explosion now blame BP for damage from the drilling moratorium President Obama imposed after the explosion.

States, cities and counties "suffered severe economic hardship as a result of the drilling moratorium," Alabama Attorney General Luther Strange wrote on March 4.

Strange, on behalf of five states, asked U.S. District Judge Carl Barbier to certify class actions against BP and other companies.

He called the moratorium a direct, proximate and foreseeable result of the explosion and the spill that followed.

Though he alleged economic damage from both the spill and the moratorium, he offered only stale estimates of damage from the spill.

He borrowed from earlier briefs on the spill, speculating about 2010 in future tense.

His allegations on the moratorium, however, relied on fresh information.

He quoted a Jan. 13 report from Greater New Orleans Regional Economic Alliance, finding the moratorium shut down 33 rigs, affecting more than 13,000 workers.

He wrote that the report found deep water drilling contributed $2.3 million to $3.2 million in direct revenue to the state of Louisiana and parish governments each month, and more than $7
million in indirect revenue.

"The report concluded that if the rate of issuance of drilling permits remains unchanged, unemployment will likely dramatically increase as businesses continue to diminish their savings," Strange wrote.

"This would be a huge blow to the state of Louisiana and coastal parishes still recovering from the hurricanes of 2005 and 2008.

"Additionally, rigs and entire drilling operations may move to other areas or even overseas, taking with them valuable jobs and tax revenue.

"The report observed that many small, family owned businesses which support the oil and gas industries are vulnerable."

Strange represents the interests of all state and local governments on a plaintiff steering committee that Barbier picked.

Stephen Herman of New Orleans and James Roy of Lafayette, liaison counsel leading the committee, attached their names to the brief.

So did Walter Leger Jr., of New Orleans.

Their brief answered a petition from rig owner Transocean, seeking to limit its liability under an act of Congress from 1851.

Starting with a single party on a narrow point, they fashioned a complaint against BP, cement contractor Halliburton, blowout prevention contractor Cameron International and others through cross claims.

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Organizations in this Story

State of Louisiana
900 North 3rd Street
Baton Rouge, LA 70802

Alabama Attorney General
501 Washington Ave
Montgomery, AL 36104

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