By Steven Mufson
Washington Post Staff Writer

The Interior Department denied that it has extended a drilling freeze to shallow waters of the Gulf of Mexico, contradicting an e-mail written earlier Thursday by the Minerals Management Service’s supervisor of field operations for the Gulf of Mexico.

An Interior Department spokesman said “shallow water drilling may continue as long as oil and gas operations satisfy the environmental and safety requirements Secretary [Ken] Salazar outlined in his report to the President and have exploration plans that meet those requirements. There is no moratorium on shallow water drilling.”

Earlier, Michael J. Saucier, regional supervisor of field operations for the MMS Gulf of Mexico region, said in an e-mail to one company seeking a permit that “until further notice we have been informed not to approve or allow any drilling no matter the water depth.” Only three days earlier he had told the same company that drilling in water up to 500 feet deep would not be affected by the Obama moratorium.

Obama announced last week that he would suspend drilling in deep water in the gulf for six months, effectively delaying plans for at least 30 rigs. Lawmakers from Gulf Coast states had urged him to allow continued drilling in shallow waters to protect jobs in the region.

06/03/2010 – The Interior Department contradicted an email from the Minerals Management Service’s (MMS) supervisor of field operations in the Gulf of Mexico from earlier Thursday, denying that a drilling freeze to shallow waters of the Gulf is being extended.
“Shallow water drilling may continue as long as oil and gas operations satisfy the environmental and safety requirements Secretary Salazar outlined in his report to the President and have exploration plans that meet those requirements,” said a spokesman for the Interior Department. “There is no moratorium on shallow water drilling.”
Earlier today, regional supervisor of field operations for the MMS Gulf of Mexico region, Michael J. Saucier, replied to an email from a company seeking a permit, saying, “until further notice we have been informed not to approve or allow any drilling no matter the water depth.”
However, Saucier had told the same company that the Obama moratorium would not affect drilling in 500 feet deep water.
Last week, the president said that drilling will be suspended in deepwater for six months in the region; Gulf coast state officials urged Obama to allow drilling in shallow waters so jobs in the region would remain unaffected.

WASHINGTON ˜ When the Obama administration imposed new restrictions last week on offshore drilling in the wake of the BP oil spill, officials carved out an exemption that received little public attention: Companies working in shallow waters, unlike deep-sea operators like BP, could again begin drilling for oil and gas.

The decision, which followed a furious appeal from lawmakers allied with the oil industry, represented a surprising victory for the shallow-water drillers in the midst of what could prove the biggest environmental disaster in United States history. And it reflected the intense lobbying efforts at work from all sides, as Congress and the administration consider ways to prevent another drilling disaster off the nation‚s coasts.

Environmentalists and their supporters in Congress, hoping to seize the political momentum, are working to push through measures to extend bans on new offshore drilling, strengthen safety and environmental safeguards and raise to $10 billion or more the cap on civil liability for an oil producer in a spill.

„You don‚t want to let a good crisis get away,‰ said Athan Manuel, the director of lands protection for the Sierra Club‚s legislative office, which is pushing for a permanent moratorium on new offshore drilling.

Oil industry executives acknowledge the stiff political resistance that they face. Despite the success of shallow-water drillers in avoiding a continued ban on their end of the industry, executives and industry analysts say the daily images of oil wafting onto the coastline will make it tougher for them to fend off calls for tougher regulations that extend far beyond BP and the Deepwater Horizon spill.

Bruce Vincent, president of the Independent Petroleum Association of America, which represents both deep-sea and shallow-water drillers, said Wednesday that he was concerned about a „domino effect‰ sweeping through Washington, with new regulations now under discussion threatening to cut oil production, jobs and industry profits.

„It‚s amazing to see the impact that one company can have for all sorts of other people,‰ he said. „When a plane crashes, you don‚t just shut down every airline in the fleet until you find out what happened.‰

The oil and gas industry is a formidable presence in Washington. It spent more on federal lobbying last year than all but two other industries, with $174.8 million in lobbying expenditures, according to the Center for Responsive Politics, a nonpartisan research group.

Political action committees set up by the oil and gas producers contributed an additional $9 million last election cycle to Congressional candidates, with Koch Industries, ExxonMobil, Valero Energy and Chevron leading the way, the data showed. (BP ranked 19th, with $75,500 in contributions, most to Republicans.)

For decades, the oil industry had showcased and developed its latest technology in the Gulf of Mexico. But the spill now casts a pall over offshore oil and gas operations, just as the industry thought it had snatched a major victory from the administration, which agreed to expand oil and gas drilling earlier this year.

Rex Tillerson, the chairman and chief executive of ExxonMobil, admitted last week that the industry faced a huge challenge.

„The most difficult challenge confronting the whole industry at this point is regaining the confidence and trust of the public, the American people, and regaining the confidence and trust of the government regulators and the people who oversee our activities out there,‰ he said in response to questions from reporters after a shareholder meeting.

The industry was already grappling with the prospect of tighter scrutiny over some of its drilling practices even before the gulf spill. Congress has been looking at the environmental impact of hydraulic fracturing, where water is pumped at high pressure to break rocks and free natural gas, a technique that some environmental groups believe can pollute underground water sources.

Now the industry is facing a much graver threat as it seeks to determine how long the administration‚s deepwater drilling ban will last. The Interior Department said last weekend that all drilling activity in the waters deeper than 500 feet was to stop for six months. But some analysts fear the ban could be prolonged until a commission appointed by the president provides its conclusions.

That could extend the ban for a year, and the American Petroleum Institute, the industry‚s main trade group, forecasts that a longer delay could crimp future production by as much as 400,000 barrels a day by 2015.

As well as imposing a drilling ban in the Gulf of Mexico, the administration also halted new drilling off Alaska and Virginia for the time being. The announcement stalled plans by Shell to drill three exploration wells in the Beaufort Sea this summer. It also put off a long-awaited sale of new leases off Virginia for the first time since the administration lifted a longstanding moratorium on drilling in the Atlantic.

With the environmental damage growing from the BP disaster, the industry‚s most persuasive argument in trying to fend off tougher regulations may prove to be jobs. That was one of the crucial elements used by the shallow-water operators ˜ mostly smaller companies that produce about 20 percent of the gulf‚s daily oil production of 1.7 million barrels ˜ to earn an exemption from the new restrictions at the Interior Department. A spokesman for the agency declined to explain why the agency had reversed course.

Representative Gene Green, a Texas Democrat who led about 50 lawmakers in appealing to the administration to lift the ban on shallow-water drillers, said he did not want to see 6,000 employees working in shallow waters risk being put out of work.

But the political pressure on the entire industry will keep growing as long as the spill lasts, bringing with it daily images of soiled coastlines.

„The oil companies know that if this is not resolved quickly, the well has been poisoned for everybody,‰ said Lawrence Goldstein, a veteran energy economist. „They are going to be painted with a broad brush. They are on the hook here

LAFAYETTE – The Greater Lafayette Chamber of Commerce is in opposition to President Barack Obama’s announced call for a moratorium of oil and gas exploration in the Gulf of Mexico. Joining the Chamber in opposition to the deepwater drilling ban is the Acadiana Regional Alliance, which is a coalition of area chambers of commerce.
The moratorium issued through the U.S. Department of the Interior, Minerals Management Service, impacts 33 deepwater drilling operations. It extends a 30 day ban to six months.

“First, and most importantly, the Chamber and our colleagues, express our heartfelt sympathies to the families of the 11 workers who lost their lives in the horrible accident in the Deepwater Horizon oil rig on April 20th,” stated Chamber President, Rob Guidry.

“The purpose of our news conference today is to demonstrate concern for and an understanding of the consequences of the disaster,” added Guidry. “We want to let the Acadiana region and the energy industry to know that we are aware of the negative, and at times irrational, reaction to the oil spill.”
Certainly, this is a tremendous environmental disaster that is best solved by cooperation and working together rather than by blaming, trying to find any issue or mistake by any party, or by punishing an industry that is vital to the security and economic interests of the entire nation and each citizens.
By shutting down the drilling operations the federal government is impacting tens of thousands of jobs in Louisiana and many more across the country at a time of economic crisis and high unemployment rates. Here at home, these are direct and indirect jobs that fuel the Louisiana economy. On any given day there are thousands of jobs working offshore, and twenty times more than that working to support the industry on shore.

“Initially, the oil spill caused the shutdown of the coastal tourism industry and the fishing industry which are critical jobs for our state. Now, Washington is causing the shutting down of the oil and gas industry,” noted Guidry. “I don’t think the President and Energy Secretary Ken Salazar understand the far reaching impact the moratorium will have.

“The oil and gas industry is not some faceless ‘entity’ out there somewhere. It is our fathers and mothers, brothers and sisters, sons and daughters and our friends and neighbors working hard to provide energy, electricity, fuel for transportation, and petrochemical based products that make our lives safer and better.”

Louisiana Secretary of Economic Development Stephen Moret estimates that the state would lose 5,000 jobs immediately and that figure could rise to 10,000 if the suspension is maintained.

Some industry experts say that it costs $500,000 to $1,000,000 a day to maintain an idle rig.

Janet Faulk, Chairman of the Acadiana Regional Alliance, notes that the oil and gas exploration and production industry has always been dangerous and risky.

“Just like coal mining and the aerospace industries are dangerous; so too, is the drilling industry. Things happen. But, you don’t shut down the entire industry when a terrible accident occurs.”

The Lafayette Chamber’s next step is to accelerate the establishment of an energy division. “We had already scheduled a meeting for June 11 to gather the leadership of the oil and gas industry to reestablish an energy division,” said Guidry. “This unfortunate incident is expediting our initiative.”
The division will not duplicate the activities of other oil and gas associations but will collaborate on action plans and lobbying efforts on the federal, state and local levels.
Additionally, the Chamber will ask the appropriate federal officials to fast track the moratorium from six months to three months. We will provide a forum for local experts who have been at this industry since the 1950’s to provide ideas and suggestions to prevent similar events in the future. If local industry leaders are asked we are certain they can offer solutions.
The investment house of Morgan Stanley predicts that the Gulf of Mexico deepwater drilling ban will “almost certainly lasting longer than six months and possibly up to four years.” Morgan Stanley indicates that offshore drilling companies will be the first and hardest hit, with subsea equipment manufacturers to follow.
Additionally, there are reports that deepwater drilling companies are considering relocating outside of the United States as a result of the moratorium.
Should this happen, the average American will see higher prices for the oil and gasoline and the fuel they use to heat and cool their homes or power their vehicles. Air transportation will cost more as well as products made from oil and oil byproducts.
What this moratorium is doing to America is thwarting innovation and the entrepreneurial spirit, and a willingness to invest in the face of tremendous challenges and obstacles.

Thousands of Jobs and Billions of Dollars in Government Revenue at Risk
From Six-month Gulf Drilling Halt Says National Ocean Industries Association (NOIA) Chairman

Washington – Preliminary estimates show crippling job loss and significant economic impacts will result from the President’s recent order to halt work on 33 exploratory wells in the deepwater Gulf of Mexico and institute a six-month moratorium on all drilling in water depths greater than 500 feet.

“The immediate impacts of the order will be felt by the families of tens of thousands of offshore workers who will be unemployed,” said Burt Adams, Chairman of the National Ocean Industries Association.

For each platform idled by the work stoppage, up to 1,400 jobs are at risk, and lost wages could reach $10 million per month per platform and up to $330 million per month for all 33 platforms, preliminary estimates from the Louisiana Mid-Continent Oil and Gas Association (LMOGA) show.

“At a time when the spill is already causing economic stress for key industries in the region, the president’s action will make things much worse by putting more Gulf citizens out of work,” said Adams.

The LMOGA estimates show the six-month halt would defer four percent of anticipated 2011 deepwater Gulf of Mexico production (80,000 barrels per day), and  likely render seven current discoveries sub-economic, putting $7.6 billion in future government revenues at risk.  Additionally, drilling rigs idled by the order will be contracted overseas, and will not be available to work in the Gulf once the halt is lifted, making the U.S. even more dependent on foreign oil.   “Other countries are apparently more confident in the overall safety of the oil and gas industry and will no doubt fill the potential void created by less domestic production,” said Adams.

“The need to act in the face of the ongoing crisis in the Gulf of Mexico is understandable, but the 33 rigs affected by the presidential order are the very ones successfully inspected in early May at the order of Interior Secretary Ken Salazar,” Adams said.  “Nobody wants to just rush into deepwater drilling during this ongoing crisis, but it appears that less draconian and potentially less harmful solutions such as increased inspection and recertification of equipment would be an acceptable compromise.”

“Considering that the deepwater regions generate 80 percent of the Gulf’s oil production and 45 percent of its natural gas production, a six-month work stoppage will have severe and perhaps long lasting impacts on our domestic energy supply and economic security,” said Adams. “When you couple this ‘no less than six-month’ moratorium with the cancelled Western Gulf lease sale, the potential for long term job loss and economic hardship for the Gulf of Mexico looms even greater.”

The offshore industry is responsible for nearly 200,000 jobs in the Gulf of Mexico alone, and provides 30 percent of our nation’s domestic oil production and 11 percent of our domestic gas production.  Offshore oil and gas production accounts for an average $13 billion a year in non-tax revenues to states and the Federal government and has made over $24 billion available to the Land and Water Conservation Fund over the last 28 years.

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  The NOIA membership comprises more than 250 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance.

Times Picayune

Tarpon Rodeo canceled

This year’s Grand Isle Tarpon Rodeo has been canceled because of the Gulf of Mexico oil spill, organizers announced. The International Grand Isle Tarpon Rodeo Committee said in a news release that the rodeo has been canceled “because of the current conditions in the Gulf of Mexico and the overwhelming focus of oil spill containment efforts and the environmental challenges it has created.” Instead, the committee will put on the Island Aid Concert July 23, 24 and 25 on the grounds behind the community center on Louisiana 1. For information, monitor the rodeo’s website, www.tarponrodeo.org. Proceeds from the concert will go to the Grand Isle Alive Promotion Fund to aid in rebuilding the fishing and tourism industry of Grand Isle.

‘Titanic’ director consulted

“Top kill” didn’t stop the Gulf oil spill. How about something “titanic”? Federal officials hope film director James Cameron can help them come up with ideas to stop the disastrous spill. The “Avatar” and “Titanic” director was among a group of scientists and other experts who met Tuesday with officials from the Environmental Protection Agency and other federal agencies for a brainstorming session on stopping the massive oil leak. The Canadian-born Cameron is considered an expert on underwater filming and remote vehicle technologies. This marks the second time the spill has had a brush with celebrity: Earlier, BP said it was interested in an oil-collecting technology pushed by actor Kevin Costner.

Oil washes up on Miss. island

Mississippi Gov. Haley Barbour says a strand of oil about three feet wide and two miles long has been found on Petit Bois Island near the Mississippi-Alabama border. Barbour says the caramel-colored strand was spotted Tuesday about 9:15 a.m. on the western end of Petit Bois, south of Mississippi’s Jackson County. Barbour says vessels will be dispatched to clean up the oil. He says the patch of oil should have been spotted Monday but was not — likely because it was beneath the surface of the water. Barbour says officials think the strand broke off a patch of oil Sunday south of nearby Horn Island.

Scientists: Shrimp can survive

Wildlife scientists think shrimp can survive the massive oil spill in the Gulf of Mexico. Martin Bourgeois of the Louisiana Department of Wildlife and Fisheries says brown shrimp spawn offshore in January, February and March. Once the eggs hatch, the prevailing winds and currents carry larva to the Louisiana marsh, where they grow until it’s time for them to swim back offshore to spawn. May is the peak fishing season for brown shrimp. White shrimp season begins in August and continues until December. Bourgeois said Tuesday that white shrimp spawn closer to shore, but otherwise the one-year life cycle is mostly the same. The department says about 30 percent of Louisiana’s Gulf waters are closed to shrimping.

BP awaiting oil plume analysis

Two days after BP chief Tony Hayward questioned the validity of scientists’ statements that huge plumes of oil are suspended underwater from the Gulf of Mexico spill, company spokesman Graham MacEwen said Tuesday that BP is awaiting analysis of water samples taken in the Gulf before making a final determination. Hayward said Sunday there was “no evidence” of the plumes and that all the oil from the spill was floating to the surface. Since an April 20 blowout aboard the Deepwater Horizon drilling platform, researchers from universities in Florida, Georgia, Louisiana and Mississippi have reported plumes. Rep. Edward Markey, D-Mass., has asked BP to back up Hayward’s claim that they do not exist.

Nungesser says more oil in Plaquemines than noted

Plaquemines Parish President Billy Nungesser said Tuesday the Coast Guard and BP have understated the amount of parish land affected by oil. Citing recent statements by the Coast Guard and BP that 30 acres have been fouled, Nungesser in a news release said parish mapping officials have determined the amount is nearly 3,000 acres. The news release said oil has washed up on East Grand Terre Island, Wilkinson Bay, the islands in Cat Bay and Bay Ronquille, Point Chenier Ronquille Island, and in the South Pass, Redfish Bay and Pass a Loutre areas. A press representative at the Unified Command Center pointed a reporter to the www.deepwaterhorizonresponse.com website. That website has a map of affected areas, but it does not specify the Plaquemines Parish acreage. A BP representative referred a reporter to the Unified Command Center.