Gulf of Mexico Oil Spill Blog Oil and Gas Offshore Drilling Moratorium

Oil and Gas Offshore Drilling

oil drilling

5-month-old moratorium on deep-water oil drilling lifted

By Julie Schmit, USA TODAY


The Obama administration on Tuesday lifted a 5-month-old moratorium on deep-water oil and gas exploration, saying that new regulations make drilling safe enough to resume but that it’ll never be risk free. The action means deep-water drillers can apply to the federal government for permits to explore for oil and gas in the Gulf of Mexico, which accounts for 30% of the USA’s domestic oil supply. It also is one more step in the process of recovery from the BP oil spill that grew into the USA’s worst and laid bare years of lax government regulation of an expanding oil-exploration industry.

“We are open for business,” Interior Secretary Ken Salazar said in a conference call with reporters. He said a return to business as usual was “not an option” as regulators seek to protect the environment but recognize the nation’s need for oil. The industry applauded lifting the ban but warned of long delays to get permits for rigs because of the new requirements and limited federal workers to oversee implementation.

“Without additional resources and a serious commitment by the government to process and approve permits … the moratorium will give way to a de facto moratorium, which will continue to cripple the already hard-hit Gulf region,” said Jack Gerard, CEO of the American Petroleum Institute

Oil and Gas DrillingAlthough the moratorium didn’t affect shallow-water drilling, just 12 permits for shallow wells were issued in five months. Typically, there’d be dozens approved, said Jim Noe, senior vice president of Hercules Offshore, a shallow driller. “We’re in a de facto moratorium,” he said. Noe warned that the same fate awaited deep-water drillers. One-quarter of the Gulf’s 45 shallow rigs are idle, endangering thousands of jobs, Noe said.

The moratorium, initially set to expire Nov. 30, affected three dozen rigs. Several left the Gulf for work in other parts of the world. More than one-third continued work with production or helped with the BP well. At least 18 remain idle, regulators said. None will resume exploratory drilling — the highest-risk phase of the process — unless they meet new rules requiring such things as third-party verification that wells are properly designed and rigs have equipment to quickly contain blown wells. The BP well, in 5,000 feet of water, took months to cap, partly because the industry hadn’t faced such a challenge before. The new rules will cost industry $183 million a year, the Interior Department estimates.

Oil and Gas Drilling Peter LehnerEnvironmentalists said the moratorium should remain until investigations into the BP spill, which started in April, are done.”To ensure a disaster like this never happens again, we must know what caused it in the first place. We’re still waiting for that answer,” said Peter Lehner, executive director of the Natural Resources Defense Council


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