By Russ Britt, MarketWatch – GRAND ISLE, La. (MarketWatch) — The BP oil spill has fouled the waters and devastated the fishing community on this island at the very tip of Louisiana, but it’s hard to find anyone here who favors a moratorium on deepwater drilling in the Gulf of Mexico.

Oil companies and fishing vessels have peacefully co-existed in the Gulf for decades. And even though the spill threatens the livelihoods of most Grand Isle residents, it seems few — if any — favor pulling the plug on what is the state’s biggest source of revenue.

“It will trickle down; the economy will get even worse,” said Perry Clement, a local who serves as a deck hand on several fishing boats, and is struggling for income. “It’s the delicate balance we have, with the oil and the fishing.”

Dean Blanchard has lost a lot more, and yet he feels the same way. His Dean Blanchard Seafood Co. is the region’s biggest shrimper. This year was supposed to be a bonanza, hauling in $100 million in product, he says.

Now, Blanchard may have to start fishing off Costa Rica in order to maintain his business. But he nixes the idea of a moratorium on drilling.

“We’ve been living together a long, long time,” Blanchard said of the oil drillers. “They closed the wrong thing down. They should have closed the government down.”

Indeed, it’s hard to find anyone in the state of Louisiana that favors President Barack Obama’s plans to put a cap on deepwater drilling in an attempt to deal with safety issues arising from the BP spill. Not even the industry most damaged by it, fishing, is in favor of the ban.

While the state’s fishermen have provided the nation with a third of its seafood and kept New Orleans’ renowned restaurants stocked with plenty of product, Louisiana and its offshore fields lead domestic oil production and the industry is the state’s biggest job generator. It’s also put many a patron at the table in those restaurants, locals say.

Partner, not polluter

Fishermen here don’t look at the oil industry as a potential polluter. They look at it as a partner. The rigs in the Gulf are not eyesores to them; instead the subsea structures on which they rest act as artificial reefs that are potentially rich with products they can sell.

Hundreds of offshore platforms and rigs in the waters off Louisiana provide the state with 30% of its gross domestic product, says Michael Hecht, president of the trade group Greater New Orleans Inc. Each deep-water rig employs roughly 300 people averaging nearly $100,000 a year in income.

With roughly four other workers directly supporting each rig worker, that translates to 22,000 jobs that could be lost with the ban. The loss of the large income of these workers is expected to create a huge ripple effect throughout Louisiana.

Hecht and other civic leaders, including Louisiana Democratic U.S. Sen. Mary Landrieu, have been pleading with the Obama administration to rethink the moratorium. They say the BP spill is an anomaly, as drillers have been operating in deep water for more than two decades without major problems.

This week, U.S. District Court Judge Martin Feldman, who presides in New Orleans, ordered that the drilling ban be lifted. But the Obama administration has vowed to appeal, and Interior Secretary Ken Salazar has said he may issue another, modified drilling ban that addresses Feldman’s concerns.

The plan to keep a lid on deepwater drilling could be fatal for numerous companies and an economy that’s just getting revitalized five years after Hurricane Katrina swept through the region and flooded three-fourths of New Orleans.

Katrina added jobs, spill takes away

Hecht and others say that Katrina’s economic impact ended up being positive; the region added jobs in construction and reformulated its way of doing business. The rebuilding effort helped the area ride out the 2009 recession better than any other area, as New Orleans’ unemployment remained at a low 3%.

The spill, and the subsequent impact on fishing and the oil business, will kill jobs, Hecht says. While it could easily go longer, even if the ban lasts exactly six months, it will take another 12 to 18 months for drilling to get back into full swing.

“You’re talking about impoverishing Louisiana,” he said. “It’s an extremely inelegant solution to a complicated problem.”

One thing that federal officials may not have picked up on is the region’s changed attitude, or at least the perception of it.

After Katrina, New Orleans was viewed as a city seeking a handout. Many now say they don’t necessarily want a generous settlement from BP; they just want to get back to work.

Peter Vujnovich, an oyster fisherman, has been out of work for a month. But he says: “I hope BP steps up to the plate. Instead of making us whole, keep us whole.”

Leslie Bertucci, owner of R&D Enterprises, which supplies drilling equipment to deepwater rigs, echoes that sentiment.

“I personally had equipment on the [Deepwater] Horizon rig that we lost, although that is the least of my concerns,” she said. “I don’t really want to make a claim. We just really want to go back to work.”

And Steve Perry, chief executive of the New Orleans Convention and Visitors’ Bureau, says the region is even willing to work with BP to help mitigate the issue.

“We have a better chance if we have a strategy that works with them,” he said.

Oilmen don’t see relief

As expected, Louisiana oilmen vehemently oppose the drilling ban, but they don’t expect to see any relief soon.

Don Briggs, president of the Louisiana Oil and Gas Association, says the Obama administration seems likely to use the ban as a bargaining chip to push through a climate change bill. That bill is expected to include a “cap-and-trade” provision that could force companies to trade pollution credits based on their emissions levels.

According to Briggs, the drilling ban is unnecessary because the spill resulted from poor planning and management on BP’s part. There are more than 590 producing wells in the Gulf’s deep water, he adds. Deep water is defined as anything 500 feet or more below the surface.

“He [Obama] doesn’t have to do what he’s doing,” he said. “What the hell does he know? He’s a freaking Chicago guy.”

Two hours west of New Orleans, the city of Lafayette is somewhat of an oil hub. Oilfield service companies along with drillers and marketers are worried that city will be crippled by the drilling ban.

Badger Oil Corp., a privately held oil producer in Lafayette, is too small a company to drill in deep water, but it’s feeling the effects of the government’s skittishness. The Minerals Management Service, under heavy scrutiny for its cozy relationship with the industry, is rethinking some of its routine permits, Badger officials say.

MMS issued, then withdrew three Badger permits several weeks ago. The agency is expected to come back and grant them, but it’s clear MMS is operating in a different environment.

“Nobody wants to be the guy that grants the permit where there was a problem,” said David Etienne, Badger’s vice president in charge of exploration.

Two industries damaged

For both the oil and fishing industries, however, the BP experience has been devastating.

Perhaps no one is feeling the ban more than Kirk Rousse. Born and bred on the Bayou, Rousse knows that fishing and oil are engrained in the culture. He grew up fishing and worked on a number of boats when he was younger.

The father of six children, Rousse started his own trucking business with his wife, Sheila, to transport oilfield equipment to vessels that would take the gear to offshore platforms, most of them deepwater rigs. Now it’s questionable whether Rousse will be able to work in either industry.

Rousse has lost 60% of his business due to the drilling ban and sees the rest of it hemorrhaging. He expects he’ll have to look far and wide to find income.

“I’m going to have to leave my family,” he said. “Six months from now, I probably won’t be living here.”

To him, and to numerous others in the region, oil and fishing are joined at the hip in Louisiana.

“A lot of people who retire from the oilfield, they start fishing,” Rousse said.

Last year, Louisiana’s commercial fishermen caught 30 percent of the domestic seafood consumed in the United States and contributed $2.4 billion to the state economy. Now its 13,000 fishermen are reeling from the spill’s environmental and economic impacts. Crab catches are off by 40 percent, shrimp by two-thirds, and commercial oysters could be wiped out by efforts to pump more freshwater into their brackish habitats to keep the oil at bay. Seventy percent of the Gulf remains open to fishing, but captains have been spending much of their time laying oil containment boom rather than fishing nets.

Nonetheless, since it was announced seven weeks ago, the six-month drilling moratorium has prompted an outcry among the very crabbers and shrimpers that it was meant to protect. (A federal judge in New Orleans struck down the moratorium on Tuesday; the Obama administration is appealing his ruling.) The Seafood Promotion and Marketing Board says it hasn’t heard from a single Louisiana fisherman who wants to stop oil drilling on the deepwater rigs, which employ between 6,000 to 8,000 people. “If you’ve seen Grand Isle or those [other fishing communities], you’ve seen how much oil and gas and seafood coexist in this state,” says Ewell Smith, the board’s executive director. Emerging from a discussion on the drilling ban held on Tuesday by the Louisiana Oil and Gas Association, the state petroleum industry’s trade group, Smith paints the ban as a costly overreaction: “If a Delta airline plane crashes, do you shut down the entire industry, much less shut down just Delta? You don’t do that. You’d cripple the entire nation’s economy. And that’s kind of what we’re doing here.”

In addition to supporting more drilling, Louisiana’s commercial fishing interests have declined to back recent bills in the legislature that would have made it easier to for the state to go after BP. Bills that would have enabled Louisiana to extract punitive damages from the company and tax it to pay for coastal restoration failed to pass this week before state legislators adjourned for the summer. “That’s not a fight that we want to pick up,” says Eric Sunstrom, a lobbyist for Harlon’s LA Fish & Seafood and the Louisiana Bowfishing fishermen’s Association. “Other folks can fight that fight. We just want to take care of the fishermen, make sure the industry gets back up, and make sure our brand and our market isn’t wiped to imported seafood—that’s the biggest problem.”

Rather than pushing for regulatory changes or legal challenges to BP, the Seafood and Marketing Board has focused on pressuring the company to commit $457 million over 20 years to a program that would market the state’s seafood while ensuring that it’s safe to eat. So far, BP has given the board $2 million for “crisis communications,” Smith says, but hasn’t committed to anything more.

The close relationship between Louisiana’s seafood and oil industries goes back to the 1930s, the earliest days of offshore drilling, when Texas prospectors hired Cajun fishing boat captains to help them find and tap pools of crude. It wasn’t always a perfect relationship. “They would call them ‘damn Texians,’” says Louisiana State University historian Donald Davis, the author of Washed Away? The Invisible Peoples of Louisiana’s Wetlands. The newcomers danced with local women without asking, were Baptists who claimed to not to drink (even though they did), and expected bribes in return for jobs. “The locals just didn’t understand those people, they were so different,” Davis says. “But those people began to adapt Cajun culture, instead of the other way around.”

In the following decades, the two industries have developed a comfortable, sometimes symbiotic coexistence. Pearce says the best fishing is often around the artificial reefs created by new and abandoned rigs. And when fish prices are low or the catch is down, people flock to the rigs for temporary work; when oil prices dip, they go fishing. Shell Oil is a longtime sponsor of the annual Shrimp & Petroleum Festival in Morgan City, whose website says it will prove “that oil and water really do mix.” Fishermen praise Shell for its largesse following Hurricanes Katrina and Rita, when it gave them close to $1 million in direct grants and funding for critical infrastructure. “That was the first actual money fishermen got in their hands following Katrina—before the state or federal government,” Smith says. “They literally put one of our fishing communities back on the map overnight.”

“There is a back and forth relationship there,” Pearce says. Yet the seafood industry is dwarfed by the oil industry, which pumps a $65 billion into the state economy annually and directly supports around 60,000 jobs. Likewise, the fishing industry’s political influence in the state capital is relatively weak, says Darrell Hunt, the Sierra Club’s Louisiana lobbyist. “They’re only engaged in so far as their elected officials stand up for them,” he says.

“Louisiana, we’re known for our seafood and our culture and stuff, but it’s really an oil state,” says Pat Fahey, the co-owner of AmeriPure, one of the state’s largest oyster packing companies. Last Friday, he had to cease operations and lay off 48 workers. He personally supports a drilling moratorium—so long as it doesn’t get “mired down” in bureaucracy or shut down the rigs for too long. “Let’s get out there, figure out which of these wells are being run competently, and let them reopen.”

Despite the massive hit to its bottom line, for now the fishing industry seems willing to give the oil industry a pass. Sunstrom, the fishing lobbyist, views the BP disaster as an isolated incident, not a reason to rethink how the state will prevent the next big spill. “When you think of how long we’ve been drilling in the gulf, and you have something like this happen,” he says, “I personally just consider this a really, really shitty accident. I mean, it’s terrible. And there may be some fault—safety problems or whatever—but this is not something that happens every 5 or 10 or 15 years. This is just a really bad tragedy that just happened. And now we have to try and recover from it.”

New Orleans, Louisiana (CNN) — Paving the way for deepwater drilling to resume in the Gulf of Mexico, a federal judge on Thursday denied a request to keep a moratorium in place pending a government appeal.

U.S. District Judge Martin Feldman in New Orleans, Louisiana, issued a preliminary injunction against the six-month ban Tuesday. The government had asked Feldman to delay lifting the ban until an appeals court reviewed the issue later this summer.

The moratorium was imposed by President Obama on May 27 after an April 20 explosion on the Deepwater Horizon rig off the coast of Louisiana triggered an underwater oil gusher. It prohibited drilling in more than 500 feet of water and prevented new permits from being issued.

In an emergency hearing Thursday, the judge denied the government’s motion to stay his decision pending appeal “for the same reasons given” Tuesday for issuing the injunction.

In Tuesday’s ruling, Feldman wrote, “An invalid agency decision to suspend drilling of wells in depths of over 500 feet simply cannot justify the immeasurable effect on the plaintiffs (oil drilling support companies), the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country.”

The government has 30 days to show it is beginning to comply with Feldman’s order and start accepting permit applications and issuing permits. The appeals process can continue, but until the appeal, the government must act as if Feldman’s order will be upheld.

The full Senate Energy and Natural Resources committee met Thursday to consider bills related to Minerals Management Service reform and to offshore drilling. Committee member Sen. John Barrasso, R-Wyoming, said the Obama administration is putting ideology over scientific integrity.

“The administration put together a group of experts to review safety recommendations for offshore oil and gas exploration. The administration proudly stated that the safety recommendations were peer reviewed,” Barrasso said.

“Well, afterwards, the American people found out that the most significant recommendation — which was the moratorium — was not actually peer reviewed. The moratorium was added after the experts had been consulted. The majority of the experts consulted say that their names were used to justify a political decision made by the administration.”

Sen. Mary Landrieu, D-Louisiana, responded, “When your team was in charge, which would be under the previous administration, you didn’t leave a very clear instruction book as to how to do this. And in defense of this administration, as the secretary said, the president is trying to rise above partisanship. And I think we all have to make our best effort to do this. This is not a time to try to take what I would consider a cheap shot.”

As the deepwater drilling debate raged, BP has struggled to contain the gusher in the Gulf of Mexico and control its public relations message.

A containment cap over the underwater gusher in the Gulf resumed siphoning oil and gas to a surface vessel Wednesday night after BP had to stop part of the operation earlier in the day.

The cap was removed at 9:45 a.m. Wednesday after an undersea robot accidentally bumped a vent on the device, shutting it off. BP said the device was reinstalled and functioning again by 8 p.m. Wednesday.

The delay in containment efforts came after a day of record crude collection from the cap system.

After the underwater collision Wednesday morning, BP noticed “a discharge of liquids” rising through the vent that prohibits hydrates or icelike crystals from forming in the cap, said Adm. Thad Allen, the government’s response manager.

Allen said BP removed the cap to analyze the liquids and to check for hydrates, which could block oil from reaching the surface vessel collecting the gushing crude.

Also Wednesday, BP put on a new public face by tapping its managing director to lead a new and permanent Gulf of Mexico oil disaster organization.

Bob Dudley, a native of Mississippi, was appointed president and chief executive officer of BP’s Gulf Coast Restoration Organization, BP said in a statement.

Dudley said the new organization was designed to enable BP to push more of the company’s resources toward the overall recovery effort and to make sure the claims process is transferred smoothly to Kenneth Feinberg, the independent director of BP’s $20 billion compensation fund.

“Meantime, we’ll continue to write the checks, pay the claims and make sure that we’re there for a long time, many years, not only after the well is stopped, but the cleanup,” Dudley said. “This is the first step.”

Some have speculated that BP’s top executive, Tony Hayward, would step aside after a grilling in Congress last week and criticism over public relations gaffes.

Dudley will still report to Hayward, who remains as BP’s group chief executive.

But even as BP tried to change its public perception Wednesday, a report was released indicating the company showed a lack of cooperation with agencies trying to help get an accurate flow-rate of the oil spill.

The document, released by the Coast Guard, is a sole-source contract seeking to secure the services of the Woods Hole Oceanographic Institution, an agency known in the oil spill field.

Woods Hole submitted proposed technology to BP in May designed to provide an accurate flow-rate estimate from the ruptured undersea well after the oil company provided its own numbers inconsistent with those of scientific experts, the document shows.

The institution’s technological capabilities at the site include sonar, optical, Doppler and mass spectrometer varieties of sensors, according to the Coast Guard.

However, the document quotes BP America CEO Lamar McKay from his congressional hearing testimony as saying, “This leak is not measurable through technology we know.”

According to the Coast Guard, BP delayed acting on the institution’s technology proposal “under the premise that BP would soon implement successful recovery techniques.”

“Previous efforts to apply sensors to the site for determination of flow rate have been delayed under the assumptions that the oil leak would be stopped by pending mitigation efforts, which have not been successful to date,” the document says.

BP initially had put the rate of oil flowing from the well into the Gulf of Mexico at 1,000 barrels a day (42,000 gallons) and then 5,000 barrels (210,000 gallons), before conceding the actual rate could be much higher.

As the Atlantic hurricane season is under way, weather could affect how broadly the millions of gallons that have leaked might spread.

A tropical disturbance that has dumped heavy rain on parts of the Caribbean has a medium chance of forming into a much stronger storm and could head into the oil-tainted Gulf by next week.

Forecasters at the National Hurricane Center said Thursday there was a 40 percent chance that the storm would develop further in the next 48 hours. It was too early to predict whether it would intensify or reach areas of the Gulf Coast, but even a tropical depression could cause significant disruption to oil-affected areas.

High winds and seas could distribute the oil over a wider area and storm surges could wash more oil ashore, according to the National Oceanic and Atmospheric Administration.

FORTUNE (Original Article) — When President Obama’s offshore drilling moratorium halted work off the Gulf Coast in late May, the industry spewed that Washington just doesn’t get it. For every rig worker, they argued, there were three to four more jobs supporting deepwater operations — 21,000 in all, according to Louisiana’s Oil and Gas Association. How could President Obama’s administration legally close 33 permitted drill sites in the Gulf of Mexico when nearly all passed inspection by the Minerals Management Service after the Deepwater Horizon’s April 20 explosion?

Amid the pleading by politicians and talking heads, the industry’s challenge was eventually won by an unlikely champion — a local vessel company called Hornbeck Offshore Services.

Hornbeck (HOS), a $400-million vessel company in Louisiana’s St. Tammany Parish, filed a lawsuit against the administration on June 7, a month after the moratorium started. It looked like a classic David versus Goliath battle: a boat operator going up against the federal government.

But Hornbeck was in a bind and had little to lose by going on the offensive. One-third of its sales come from contracting its 200-plus-foot vessels to transport diesel fuel, piping, and drummed material for deepwater drilling operations in the Gulf. Without drilling, its vessels were sitting idle.

“We didn’t think from a gut reaction at the time that [the moratorium] was even legal,” CEO Todd Hornbeck tells Fortune.

Of its 38 ships in the Gulf, Hornbeck has only contracted 12 to help in the cleanup efforts. That left about 26 ships either idle, on the spot market, or in short contracts to haul supplies. One drilling customer said it would cancel its contract and Hornbeck expected more drilling operators at the 33 sites to follow suit. Analysts cut earnings estimates and downgraded the stock.

No other choice but battle

Under a moratorium in the Gulf, Hornbeck would have been forced to find work for its ships in international waters. Just the commute abroad could take anywhere from 30 days to three months, and so-called cabotage laws make it difficult for foreign companies to quickly find work in international m

“We decided, if they’re going to shut us down, we’ve got to do something about it,” Hornbeck recalls.

So the CEO and his lawyers dug through the government’s report to find holes. A dozen other Gulf-based businesses with more than 10,000 employees joined Hornbeck in the suit, among them, Bollinger Shipyards of Lockport, La., which earns 50% of its sales from constructing and repairing vessels for Gulf production. Their argument centered on the legality of the ban when many drillers met all regulatory requirements.

The case culminated on Tuesday with an injunction against the ban issued by U.S. District Judge Martin Feldman in New Orleans. In his sharp opinion, Feldman agreed with Hornbeck’s argument that the broad ban was arbitrary and capricious. “If some drilling equipment parts are flawed, is it rational to say all are?” he wrote. “Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavy-handed, and rather overbearing.”

Hornbeck heard of the verdict while taping an interview for the CBS Evening News. The White House vowed to appeal, and Department of Interior Secretary Ken Salazar planned to testify to a Senate subcommittee Wednesday in support of a ban.

In a curious twist, it appeared the market expected good news. On Friday, call options to buy the stock at a higher price outnumbered puts by 19 to 1, and shares gained 4.5%. And earlier last week company founder Larry Hornbeck bought more than $300,000 worth of shares, capping a week of more than $600,000 worth of purchases by Hornbeck insiders at the lowest prices since March 2009, according to Thomson Reuters data.

After a brief spike following the ruling announcement, Hornbeck shares closed down slightly on Tuesday and shed another 2% by mid-day Wednesday.

For his part, Hornbeck says he’s just happy to be back in business. “We’re ready to go to work today — and we can do that today.” But drilling in the Gulf is likely to resume slowly, if at all, as companies like Royal Dutch Shell (RDS.A) and others wait to see how the appeals court rules before restarting work.

That could make it a slow victory for Gulf drillers — but a victory nevertheless.  

NEW ORLEANS (CN) – The White House on Wednesday appealed a federal judge’s order that blocked its 6-month moratorium on offshore drilling in the Gulf of Mexico, and the oil drilling support companies that won the injunction asked for a hearing as soon as possible. The Secretary of the Interior claims that the 6-month moratorium affected only 33 active deepwater oil wells in the Gulf of Mexico, and the danger of harm from another oil spill far outweighs the interests of those 33 drilling sites.

The Obama administration asked U.S. District Judge Martin Feldman to stay the injunction he issued Tuesday, pending the outcome of the appeal to the 5th Circuit.

The “suspensions were issued to prevent the risk of more loss of life and long-term environmental and economic devastation like that arising from the Deepwater Horizon accident,” according to the government’s 12-page memorandum for an emergency stay. “In contrast, plaintiffs [oil-drilling support service companies] have demonstrated a risk of short-term economic harm. Finally, the public interest is overwhelmingly served by the limited 6-month suspensions because the time is needed to implement necessary safety measures to increase the margin of safety in deepwater drilling. The court should therefore stay its injunction pending appellate review.”

The expedited appeal came after Judge Feldman issued a 22-page ruling that called the moratorium arbitrary and overly broad, and economically harmful. Judge Feldman ruled that “the blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.”

The original plaintiff that challenged the moratorium, Hornbeck Offshore Services, was quickly joined by other drilling service firms. Hornbeck followed the Obama administration’s motion on Wednesday with its own request for emergency relief, complaining that the Interior Secretary “continue(s) to enforce the moratorium … in direct violation of the court’s preliminary injunction order dated June 22, 2010 … which immediately prohibited Defendants from enforcing the moratorium.” Hornbeck asked for an emergency hearing on its motion to enforce the preliminary injunction “at the earliest available time.”
Some major oil companies, including Royal Dutch Shell, have said they will await outcome of the appeals, which could take weeks or months, before they resume operations.

Professor David Uhlmann of the University of Michigan Law School, a former chief of the Justice Department’s criminal section, said the administration probably would win a stay, either from Judge Feldman or the 5th Circuit.
“Given the enormity of the stakes involved, there’s a good chance that they will stay the injunction even if the federal district court judge refused to do so,” Uhlmann said.

A hearing on the plaintiffs’ motion to enforce the preliminary injunction has been set for July 28

(Daily Advertiser)

Devon Energy will close its field office in Lafayette in September as the company continues to sell off its properties in the Gulf of Mexico.

The move is part of a company-wide repositioning strategy and not a result of the BP oil spill, said Devon Energy spokesman Chip Minty.

Devon Energy announced in November that it would divest itself of its Gulf and international assets and focus instead on onshore oil and gas plays in the U.S. and Canada.

The Lafayette office, located in Park Tower on East Kaliste Saloom Road, served as the hub of Devon’s offshore operations.

Its closing affects 147 employees, Minty said. Of those, 82 have gone to Apache Corp., which purchased Devon’s shelf assets in the Gulf of Mexico, and two have been hired by BP, which bought out’s Devon’s deepwater Gulf assets.

Devon Energy still has 11 employees in Lafayette. They will remain with the company until the office closes in September.

Devon Energy maintains an extensive portfolio of oil and gas properties in North America, Minty said, including positions in five shale plays in the U.S. and Canada.

The company holds 570,000 acres in the Haynesville Shale in Northwest Louisiana and East Texas, and also operates a field office in Ruston.

According to Devon’s annual Louisiana fact sheet, Devon Energy had 164 employees in Louisiana in 2009 and an in-state payroll of $16 million.

The Oklahoma City-based company is the largest independent oil and gas company in the United States, with about 5,500 employees.

There is growing concern that the BP spill and subsequent deepsea drilling ban will cause massive job losses within Lafayette’s oil and gas industry, but those fears haven’t yet materialized, according to local unemployment claims.

Also, the Louisiana Worker Adjustment and Retraining Notification Act requires employers to give 60 days notice in advance of any plant closings or mass layoffs, and Devon Energy is the only Lafayette-area company to file a WARN notice so far in 2010, according to the Louisiana Workforce Commission.

WASHINGTON (Reuters) – The U.S. government will revise its restrictions on offshore drilling, which could allow some deepwater oil projects to go forward after a court threw out the Obama administration’s blanket drilling ban, a senior official said on Wednesday.

U.S. Interior Secretary Ken Salazar told a congressional panel the new moratorium would be adjusted and would include criteria for ending the ban. He did not provide more details on how the new moratorium would get around the judge’s ruling or when it would be released.

He suggested some drilling in proven oil fields might move forward. That would be good news for companies like Petrobras and Royal Dutch Shell, which were set to delay major projects on fields that offer the best new source of domestic crude.

“It might be that there are demarcations that can be made based on reservoirs where we actually do know the pressures and the risks associated with that versus those reservoirs which are exploratory in nature,” Salazar said.

“We will in the weeks and months ahead take a look at how it is that the moratorium in place might be refined,” he said.

President Barack Obama’s administration imposed a six-month moratorium on deepwater drilling after BP Plc’s massive spill, which has devastated wetlands and communities along the U.S. Gulf coast.

Limiting the moratorium based on the risks associated with certain reservoirs may not be easy, said Ken Medlock, an energy fellow at the Baker Institute at Rice University.

“I think it’s going to be difficult for them to actually implement this kind of plan. The geology with regard to fields out there is actually quite complicated,” Medlock said.

Fields can have different pressures in different areas, so it may be hard to determine risks, he added.

The ban was placed on all exploratory and development wells in waters more than 500 feet deep while a special presidential commission investigated the cause of the spill and what changes need to be made to offshore drilling.

Thousands of high-paying oil workers and the related service jobs that supported them have been sidelined, adding to the economic woes of the Gulf Coast states that have had their fishing and tourism industries hurt by the oil spill.

But on Tuesday, a U.S. judge ruled against the government, calling the ban “a blanket, generic, indeed punitive moratorium.”

The Obama Administration also said it would appeal the federal court ruling.

Salazar would not say how the new moratorium would get around the judge’s ruling against a blanket ban, but Salazar’s move to include criteria for lifting the ban and possibly allowing drilling for certain fields may be the answer.

The secretary would not commit to issuing the new drilling moratorium this week.

“We’re working out the specifics. I have a meeting this afternoon on when we’ll do it,” he told reporters after the hearing.

Meanwhile, the new head of the renamed agency that regulates offshore drilling made his first appearance before lawmakers and pledged to end the cozy relationships some federal inspectors have had with the oil companies they are supposed to oversee.

Michael Bromwich, who heads the Bureau of Ocean Energy that replaced the troubled Minerals Management Service, said he will establish an internal investigation team to battle misconduct by government employees and regulated energy companies.