The Obama administration lost its bid Thursday to maintain a six-month moratorium on offshore deepwater drilling which a federal judge ordered to be lifted last month.
The Fifth Circuit Court of Appeals denied the government's request to stay that judge's order pending appeal.
The motion was denied because the government failed to show "a likelihood of irreparable injury if the stay is not granted," the court wrote in a 2-1 ruling.
The government also "made no showing that there is any likelihood that drilling activities will be resumed pending appeal."
Interior Secretary Ken Salazar has said he will soon issue a new order to block deepwater drilling regardless of how the court ruled.
The court noted that the Salazar "has the right to apply for emergency relief if he can show that drilling activity by deepwater rigs has commenced or is about to commence."
It also ordered that the appeal be expedited so the case can be argued on its merits during the week of August 30.