Drilling moratorium lifted, questions remain on when work will resume


WASHINGTON – The Obama administration lifted the moratorium on deepwater drilling today, but could not say how quickly idled operators will be back at work.

Before they can resume drilling, the operators must file for new permits, satisfying a raft of new safety regulations that have been imposed since the BP oil disaster, and have their rigs and drilling operations reinspected.

Interior Secretary Ken Salazar, and Michael Bromwich, director of the Bureau of Ocean Energy Management, which regulates oil and gas exploration in the Outer Continental, announced the end of the moratorium in a conference call with reporters. They said that they felt it was now safe to end the moratorium for those operators who can “meet the higher bar” established in recent months. The moratorium was otherwise due to end Nov. 30.

“The truth is there will always be risks associated with deepwater drilling,, but we have significantly, in my view, reduced those risks,” said Salazar.

Bromwich said only the energy companies and the drilling contractors know how far along they are in meeting the new mandates. He said the actual inspection process is a quick one — only taking a day — but the permitting process may take much longer, and that no new drilling would being immediately, though he hoped some would resume by year’s end.

Salazar imposed the moratorium in May after the April 20 blowout of the well being drilled by the Deepwater Horizon that led to the worst oil disaster in the nation’s history. Salazar reimposed the moratorium in July after the original was stuck down by a federal judge in New Orleans, who faulted the reasoning for the shutdown.

Today’s announcement was met by wary praise from members of the Louisiana congressional delegation, who had pressed the administration to lift the moratorium almost from the moment it was imposed.

Just before the Senate broke for the midterm election recess, Sen. Mary Landrieu, D-La., put a hold on the nomination of Jacob “Jack” Lew to be the director of the Office of Management and Budget, saying she would only release it when the Obama administration lifted the moratorium and expedited the issuance of new permits for drilling in both deep and shallow water. While there has been no official moratorium on shallow-water drilling, new permits have been very few and far between since the disaster, as operators, and regulators, also grapple with new regulations.

Despite the administration’s announcement, Landrieu refused today to lift her hold on the president’s nomination of Lew.

“I applaud the administration for taking a step in the right direction by lifting the deepwater drilling moratorium,” Landrieu said. “Today’s decision is a good start, but it must be accompanied by an action plan to get the entire industry in the Gulf of Mexico back to work. This means that the administration must continue to accelerate the granting of permits in shallow and deep water, and provide greater certainty about the rules and regulations industry must meet. I strongly believe that we can do this safely and swiftly.”

Instead of releasing her hold, which has blocked a vote on Lew, Landrieu said, “I will take this time to look closely at how Bureau of Ocean Energy Management, Regulation and Enforcement is handling the issuing of permits and whether or not drilling activity in both shallow and deep water is resuming. ”

“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,” Landrieu said.

Sen. David Vitter, R-La., offered a similarly wary reaction.

“I guess this is movement in the right direction, but it’s painfully slow,” Vitter said. “It’s clear that President Obama is going to preside over a continuing de facto moratorium for months or years, with new drilling held back to a fraction of previous levels. I’ll keep fighting until real drilling happens and jobs are actually created.”

“I’m glad that Secretary Salazar has finally come to understand that we can drill for oil and gas safely in the Gulf,” said Rep. Charlie Melancon, D-Napoleonville. “Our workers need to get back to work on those rigs to provide the jobs and energy security we need. If rigs comply with the regulations that are necessary to keep another BP disaster from ever happening again, they should be allowed to resume work immediately.”

New Orleans Mayor Mitch Landrieu also weighed in, saying, “We are pleased the Administration has put new safety and spill response protocols in place. We in Louisiana know that you can drill safely. We encourage President Obama and the Interior Department to move expeditiously to get our residents back to work on both shallow-water and deepwater drilling.”

Salazar’s decision was based on a report delivered to him this month by Bromwich, who was named by President Barack Obama to lead the Bureau of Ocean Energy Management, the new regulatory body created to oversee oil and gas exploration in the Outer Continental Shelf, was charged by Salazar with advising him on when considerations of workplace safety, spill containment and spill response, the moratorium could be safely lifted. From an early August hearing in New Orleans, to a meeting in Lafayette on Sept. 13, Bromwich held eight fact-finding hearings.

The Obama administration said that the temporary shutdown of drilling in the deep waters of the Gulf was the only sensible response to the unprecedented catastrophe while the cause the accident was being determined, and while the nation’s spill containment capacity remained stressed to capacity responding in the months that oil gushed uncontrolled in the Gulf until the well was finally sealed.

But the moratorium was wildly unpopular in the Gulf and especially in Louisiana, which is heavily dependent on a fishing industry crippled by the spill, and an oil and gas industry hobbled by the official moratorium on deepwater drilling and what the industry considers a de facto moratorium on shallow-water drilling.

The Louisiana political establishment, and the state’s congressional delegation, were aggressive in denouncing the moratorium as an irresponsible overreaction that was doing potentially irreparable harm to the state’s economy, even though forecasts that the suspension would lead to a mass exodus of drilling rigs for foreign shores never happened.

Reacting to today’s development, the Shallow Water Energy Security Coalition issued a statement saying that while it was encouraged by today’s developments regarding the end to the deepwater moratorium, “we want to warn our deepwater colleagues that as soon as they try to pop the champagne, BOEM bureaucrats will be there to stick the cork back in the bottle.”

The statement continued: “Actions speak louder than words. Moratoriums can be lifted, but the administration must start issuing new permits before rigs can get back to work. The moratorium on shallow water drilling was lifted in May, yet five months later a de facto moratorium remains in place, shallow water rigs have gone idle, and 40,000 American jobs have been put in jeopardy. What we need is decisive action, not hollow pronouncements.”

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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