October 13, 2010

US Lifts Deepwater Drilling Ban in Gulf of Mexico

Officials said the U.S. lifted a ban on Tuesday on deepwater drilling in the Gulf of Mexico imposed after the BP oil spill.

"We have decided 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 for safety," Interior Secretary Ken Salazar told the AFP news agency.

President Barack Obama ordered a six-month freeze on deepwater offshore oil drilling in the Gulf of Mexico shortly after the BP oil disaster began in April. 

Salazar said the Interior Department laid out new rules that toughen up companies' obligations on drilling and workplace safety.

Salazar said the key among the new rules is an obligation for the CEO of any company wishing to drill in deep water to "certify that the rig has complied with all new and existing rules."

Executives from the companies involved in the BP-leased well that exploded in April have blamed each other for the accident, which took place about 50 miles off the coast of Louisiana.

Greenpeace said the end of the ban on deepwater drilling was "pure politics of the most cynical kind."

"Scientists haven't even assessed the full ecological impact of the BP disaster and yet the government is in a rush to allow oil companies to get back to drilling. It is irresponsible to say the least, reckless at worst," Greenpeace USA director Phil Radford told AFP.

Peter Lehner, executive director of the Natural Resources Defense Council, said that the moratorium was being lifted "prematurely."

"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 and until we get it, the moratorium should remain in place," he said.

Mary Landrieu, Louisiana Democratic Senator, welcomed Tuesday's announcement as "a step in the right direction."

"But it must be accompanied by an action plan to get the entire industry in the Gulf of Mexico back to work," including an acceleration of the permitting process, she added.

Republican Congressman Darrell Issa urged the government to "avoid a de facto moratorium-by-regulatory-delay that would be just as damaging to the Gulf economy as a blanket moratorium."

Louisiana State University finance professor Joseph Mason published a study in July that estimated the moratorium would have cost over 8,000 jobs in Gulf states of Florida, Alabama, Mississippi, Louisiana and Texas if it had run the full six months, and wiped out about $2.1 billion in economic activity.

However, Michael Bromwich, Director of the Bureau Ocean Energy Management, Regulation and Enforcement (BOEM), said the deepwater drilling was not expected to resume soon.

Bromwich said oil and gas companies need time to implement the new rules and submit applications for deepwater permits, "and it will obviously take us time to review those applications."

"You're certainly not going to see drilling resume tomorrow," Bromwich told AFP, adding that few permits were likely to be approved before the end of the year.

The Interior Department's Minerals Management Service was broken up in the aftermath of the BP disaster because of accusations that the staff accepted gifts from the oil industry and falsified rig and well inspection reports.

Salazar said those who complained the new rules for offshore drilling are too onerous "want us to ignore the new reality and go back to business as usual.  That is not an option."

He said to those who say that authorities were ignoring the dangers of deepwater drilling and lifting the ban too soon: "There will always be risks involved in deepwater drilling, but we have now reached a point where we have significantly, in my view, reduced those risks."


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