Questions about what's next as offshore drilling ban expires
Thursday, September 30, 2010
Interior Secretary Ken Salazar is getting ready to take his finger off what he has called the "pause" button on deepwater oil drilling, with environmentalists and oil industry executives alike worried about what comes next.
Thursday, Salazar will receive recommendations from Michael Bromwich, head of the Bureau of Ocean Energy Management, Regulation and Enforcement, based on information gathered at public forums and private meetings in the wake of the BP oil spill. Salazar could act on the BOEMRE report well before the drilling ban's expiration date, Nov. 30.
While many Gulf Coast lawmakers and residents have been badgering the Obama administration to lift the deepwater moratorium, key industry and administration officials are struggling with the larger questions: not when drilling will resume, but how and where.
"We're stuck between 'drill, baby, drill' and the 'BP drilling disaster,' and no one knows which argument will win," said Athan Manuel, director of the Sierra Club's lands protection program.
Bromwich is expected to propose new rules for drilling, as well as contingency measures to bolster the industry's response to any future spills.
Oil and gas executives are steeling for a slower and more costly permitting process that could hinder drilling even after the moratorium is lifted. And they worry that they won't be able to develop new areas - from Alaska to the East Coast - that President Obama outlined when he unveiled his five-year leasing plan on March 31, a few weeks before the BP blowout.
Environmentalists, in contrast, are hoping that the congressional limits on offshore drilling that expired two years ago are reimposed, or at least that the pace of development is slowed.
And the administration faces difficult questions about whether - and under what circumstances - it will allow leasing in areas from Alaska to off the coast of Virginia before Obama's first term ends.
"I'm confident that the moratorium will be lifted," said Gary Luquette, Chevron's president of North American exploration and production. "The question is: Will we be able to get permits?"
Luquette, who is also chairman of the American Petroleum Institute's upstream committee, has been making suggestions to Bromwich and other administration officials. "We think there's a way to streamline the [permitting] process that makes sure we benefit from the lessons learned" from the BP spill, he said.
'Tell us where the bar is'
The moratorium has introduced an element of uncertainty about regulations that the big oil companies are eager to see end. "If we can get clarity, the industry will meet it," Luquette said. "Tell us where the bar is, and we'll jump over it."
Four of the biggest companies have tried to reassure regulators and the public by announcing the Marine Well Containment Co., a $1 billion consortium that is planning to stockpile equipment that would be needed in the event of another spill, thus avoiding having to fabricate devices the way BP did. One company official said the consortium plans to refurbish equipment given by BP and to have containment devices ready by the time the deepwater drilling moratorium expires.