A three-judge panel has denied the federal government's request to reinstate a six-month deepwater drilling moratorium pending the government's appeal of a lower court decision that lifted the moratorium last month.
But the latest decision from the U.S. Court of Appeals for the Fifth Circuit in New Orleans notes that the government can apply for "emergency relief" if there is evidence that deepwater drilling activity is about to commence before the appeal is heard. 
The government issued the moratorium in response to the Deepwater Horizon rig explosion and subsequent and ongoing oil spill in the Gulf of Mexico.
Secretary of the Interior Ken Salazar said at the time that new deepwater wells "pose an unacceptable risk of serious and irreparable harm to life and property, and a finding that the installation of additional safety or environmental protection equipment is necessary to prevent injury or loss of life and damage to property and the environment."
But Hornbeck Offshore Services, LLC, which owns and operates a fleet of vessels supporting deepwater and ultra-deepwater exploration in the Gulf of Mexico, challenged the moratorium in the U.S. District Court for the Eastern District of Louisiana, in New Orleans.
Judge Martin L.C. Feldman lifted the government's moratorium and ruled that it was imposed "contrary to law."
The government appealed the decision and sought to reinstate its moratorium pending the appeal.
In a 2-1 decision, however, the appeals court judges state that the government "failed to demonstrate a likelihood of irreparable injury" if the moratorium is not reinstated.
The decision further states that Mr. Salazar "has made no showing that there is any likelihood that drilling activities will be resumed pending appeal."
The judges said the government has the right to apply for emergency relief if it can show that drilling activity by deepwater rigs "has commenced or is about to commence," and that any renewed motion for a stay "will be evaluated on existing circumstances."
Furthermore, the judges ordered that the government's appeal of the District Court decision be expedited so that arguments can begin on August 30.
Media reports indicated that the government will seek to put forth a revised moratorium in the wake of the decision.
The Department of the Interior did not return calls seeking comment.
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