White House Lifts Ban on Deepwater Drilling

The Obama administration lifted its moratorium on deepwater drilling for oil and gas on Tuesday, after imposing new rules intended to prevent another disaster like the Gulf of Mexico rig explosion that led to the largest offshore oil spill in American history.
“We have made and continue to make significant progress in reducing the risks associated with deepwater drilling,” Interior Secretary Ken Salazar said in announcing the step. Therefore, he said, “I have decided that it is now appropriate to lift the suspension on deepwater drilling for those operators that are able to clear the higher bar that we have set.”

Though the administration’s decision takes effect immediately, it may be weeks or months before drilling operations resume, because companies will first have to submit new permit applications showing they have complied with the tougher rules, and have their rigs inspected. Officials said that they expect at least some of the idle drilling rigs in the gulf to be at work again by the end of the year.

“We are open for business,” Mr. Salazar said.

President Obama’s administration imposed the moratorium after the blowout of a BP well in the Gulf of Mexico on April 20. The accident killed 11 men and led to the release of almost 5 million barrels of oil into the gulf before the leak was stopped.

The moratorium was due to run through Nov. 30, but the White House has come under intense pressure from the oil and gas industry and from elected officials and businesses in the gulf region to lift the ban early, because of the economic impact of about 30 drilling rigs that had been at work in the region.

The initial reaction to the lifting of the moratorium was mixed. Environmentalists criticized the step, while the oil industry expressed some concerns that the new regulations would mean that the ban would effectively remain. Senator Mary Landrieu, a Louisiana Democrat who has been among the most vocal critics of the moratorium, called the decision to lift it “a step in the right direction,” but said the administration must accelerate the granting of permits and offer more clarity about the new rules.

Ms. Landrieu has single-handedly blocked Mr. Obama’s nomination of Jacob Lew to be White House budget director, in protest over the moratorium. She said on Tuesday that she would not release her hold yet.

“When Congress reconvenes for the lame duck session next month, I will have had several weeks to evaluate if today’s lifting of the moratorium is actually putting people back to work,” she said.

Chris John, a former Democratic member of Congress who is now president of the Louisiana Mid-Continent Oil and Gas Association, a trade group, welcomed the announcement but expressed similar concerns.

“We can’t get to the permitting process if the moratorium is still there, so we’re very happy that they’ve taken this step,” he said in an interview. But he said the industry worries that permitting will go slowly. “We had a disturbing experience in the shallow water, where there was no moratorium, but some of the rules and regulations and bureaucracy caused the number of permits to plummet,” Mr. John said.

On the other side of the issue, Dan Favre, communications director of the Gulf Restoration Network, an environmental advocacy group, condemned the administration’s decision to lift the moratorium, saying it “again puts the region at risk.” He noted that the BP spill cleanup and restoration have not been completed.

“We certainly can’t afford another oil catastrophe,” Mr. Favre said. “While new rules to increase safety of drilling operations are welcomed, renaming a federal agency and creating a blueprint for safer drilling are not enough to ensure that the industry will actually follow the rules.”

The Interior Department issued new regulations in late September that were meant to improve safety, oversight and environmental safety, covering specific aspects of drilling like well casing and cementing, blowout preventers, safety certification, emergency response and worker training. To obtain a permit, an operator must now present plans for preventing and dealing with a blowout, and must pass an independent inspection, and each company’s chief executive will have to certify that a rig has complied with all new or existing rules.

“We are in a new day with respect to oil and gas drilling,” Mr. Salazar said. He acknowledged there would be criticism from several sides, but said his goal had been to develop “the gold standard for how oil and gas is developed in America’s oceans.”

“The truth is, there will always be risks associated with deepwater drilling,” he said, “but we have now reached the point where, in my view, we have reduced those risks.”

He added: “We will still need oil and gas from the Gulf of Mexico to power our cars, our homes and our industry. But we can and will make the drilling of oil and gas in the Gulf of Mexico safer than ever.”

Michael R. Bromwich, the director of the Bureau of Ocean Energy Management, Regulation and Enforcement, who led the effort to develop the new rules, said it was not yet clear how long it would take for energy companies to comply with the new rules and obtain new permits.

“It will clearly not be tomorrow, and it’s not going to be next week,” Mr. Bromwich said. “My sense is that we will have permits approved before the end of the year, but how much before the end of the year and how many permits before the end of the year, I can’t say.”

NyTimes