Court rejects U.S. bid to keep drilling moratorium

A federal appeals court has rejected the federal government's effort to restore an offshore deepwater drilling moratorium, opening the door to resumed drilling in the Gulf while the legal fight continues.

Offshore staff

NEW ORLEANS— A federal appeals court has rejected the federal government's effort to restore an offshore deepwater drilling moratorium, opening the door to resumed drilling in the Gulf while the legal fight continues.

Lawyers for the several oilfield service companies argued the administration failed to show that "irreparable harm" would take place if the drilling ban was lifted.

The ruling is not the final word on the Obama administration's fight to suspend new drilling projects so it can study the risks revealed by the disastrous BP oil spill.

The same appeals court is expected to hear arguments on the merits of the moratorium case in late August or early September.

While it's possible that 33 exploratory wells suspended by the moratorium could resume drilling, observers say that companies might not bother with the expense while the ultimate future of the projects hangs in the balance.

More in Regional Reports