U.S. lifts ban on deep-water drilling

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By Juliet Eilperin and Steven Mufson
Wednesday, October 13, 2010

Under pressure from Gulf Coast lawmakers warning of job losses, the Obama administration Tuesday lifted the moratorium on deep-water drilling for oil and gas in the Gulf of Mexico weeks ahead of schedule, pledging closer oversight in the wake of the worst spill in U.S. history.

"We are open for business," Interior Secretary Ken Salazar told reporters in a phone call Tuesday afternoon, adding, "We have made, and continue to make, significant progress in reducing the risks associated with deep-water drilling."

Salazar's announcement - which could blunt a campaign issue in states where pro-drilling sentiments run strong - met with a mixture of praise, skepticism and outright condemnation.

The oil industry welcomed the move but cautioned that a de facto moratorium could remain in effect if the Interior Department doesn't issue permits in a timely fashion.

Most environmental groups lamented the early end to the ban, citing continued risks. "Today's actions are premature," said Peter Lehner, executive director of the Natural Resources Defense Council. "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."

The Interior Department recently issued a slew of new operating and safety rules for deep-water drilling; Salazar said it will issue permits "for those operators that are able to clear the higher bar that we have set."

He said that lifting the temporary drilling ban before the Nov. 30 expiration date was possible because the petroleum industry now has more robust plans for responding to any future spill and because BP had finally capped its gushing Macondo well in mid-July.

33 rigs idled

The administration had imposed a six-month ban in late May; the ban idled 33 rigs working in the Gulf of Mexico, which provides more than a quarter of U.S. oil production. Five rigs have since left to drill in Egypt and other parts of Africa.

Political and business leaders in the gulf have pressed the administration to lift the moratorium, which they say has caused the temporary loss of 8,000 to 12,000 jobs in the region. Sen. Mary Landrieu (D-La.) has blocked a Senate vote to confirm Jacob Lew, President Obama's nominee to head the Office of Management and Budget, until the moratorium is lifted or significantly eased.

Still, the lifting of the moratorium does not mean that deep-water operations will resume immediately. Interior officials warned that could take weeks, if not months.

"It will clearly not going to be tomorrow and it will not be next week," said Michael R. Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement. "How far it will be in the future, I don't think anybody can say."

He said that he thought his bureau would issue new permits by year's end, but added: "How much before the end of the year? I can't say. And how many permits it will be? I can't say."


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