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BATON ROUGE, LA (WAFB) – The deepwater drilling moratorium has been lifted, but industry professionals say that’s just a start.  While the news is good for the state’s oil and gas future, state officials say it’s not quite time to celebrate.

While the moratorium was originally set to end next month, industry officials are wary of the new regulations they face.

The deep water drilling moratorium was viewed by many as a job-killer in Louisiana.  Governor Jindal, Lt. Governor Scott Angelle and countless Louisiana leaders were vocal in their efforts to get the Obama Administration to change the policy.

“We are glad they are beginning to reverse this job killing policy,” said Governor Jindal.

“Lifting the moratorium was the first step and it’s something that is a good thing, but it doesn’t mean that all companies are gonna be able to flip the switch and have drilling rigs go back to drilling overnight,” said Angelle.

In fact, industry leaders fear the government my have put too many new regulations in place.

“We are very cautious because there’s still a lot of uncertainty out there,” said Gifford Briggs, Vice President of the Louisiana Oil and Gas Association.  “There’s been new rules, new regulations put in place.  We don’t know how those are gonna proceed, don’t know how long to work through these.”

Angelle says he heard the Director of the Bureau of Ocean Energy Management, Michael Bromwich, say it may be the end of the year before permits were issued for the deep water area.  “So not any news for dancing in the street, but more positive than not,” added Angelle.

Original Article

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Business and industry groups across Louisiana say the Obama administration’s decision today to lift the moratorium on deepwater drilling is a good first step. But it will be a while before oil and gas activity in the Gulf of Mexico goes back to what it was before the Deepwater Horizon disaster. “We’re still very concerned about how we’re going to move forward,” says Gifford Briggs, vice president of the Louisiana Oil & Gas Association. Briggs says it will take a “long time” before uncertainty is cleared up and companies adjust to the new regulations. “Now, what’s the definition of a long time? Is it six months? Is it a year?” he says. Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, says he’s still concerned about the implications of the new drilling rules published this week. “It is yet to be seen how implementation of these rules will impact the industry, and the last thing we need at this time is another ‘de facto moratorium’ like the one that exists in shallow waters now, ” John says. Since the Deepwater Horizon disaster, the number of shallow water drilling permits has slowed to a trickle. Gov. Bobby Jindal’s office says while 10 to 14 new shallow water permits a month were issued before the moratorium, 12 permits have been issued since June. “While this is good news, if there is one thing we have learned from this administration it is that the devil is always in the details,” Jindal says. To protest the moratorium, U.S. Sen. Mary Landrieu blocked a Senate vote to confirm Obama’s choice of Jacob Lew to head the Office of Management and Budget. She applauded the decision to lift the ban but said she would not release her hold on Lew’s nomination.

Original Article

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Wednesday, October 13, 2010

Washington bureau

WASHINGTON — The Obama administration lifted its moratorium on deepwater drilling Tuesday, but it 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 in April and get their rigs and drilling operations reinspected.

The announcement was met with wary praise from the industry and Louisiana political leaders, who fear that the lifting of the official moratorium will leave what amounts to a de facto moratorium in place, and condemnation from environmentalists, who warn that the administration move means drilling will be allowed to resume before it is clearly understood what led to the worst oil disaster in the nation’s history.

“The truth is there will always be risks associated with deepwater drilling, but we have significantly, in my view, reduced those risks,” said Interior Secretary Ken Salazar, who announced the end of the moratorium in a conference call with reporters.

“We are open for business,” Salazar said. “We will be taking applications for drilling in the deep water.”

Salazar was joined on the call by Michael Bromwich, director of the Bureau of Ocean Energy Management, which regulates oil and gas exploration in the Outer Continental Shelf, who said the new regulations imposed since the disaster “raise the bar of safety for deepwater drilling” to an acceptable threshold to resume permitting.

Bromwich said only the individual energy companies and drilling contractors know who among them is close to satisfying the new requirements. He said the actual inspection process is quick, taking a day or so, but the permitting process might take much longer and that no new drilling would begin immediately. He said he hoped some would be ready to go by year’s end.

The industry remains concerned that the lifting of the moratorium not be seen as a “symbolic” gesture that does not genuinely change the state of play in the Gulf, where thousands of jobs are dependent on the offshore drilling operations.

“Today the administration has taken the first step to secure America’s energy future, but we don’t know how long the next steps will take,” said Gifford Briggs, vice president of the Louisiana Oil & Gas Association. He said he expects the permitting process to be a give-and-take between industry and regulators, the dynamics of which remain unknown.

“Without additional resources and a serious commitment by the government to process and approve permits and other requirements expeditiously, the moratorium will give way to a de facto moratorium, which will continue to cripple the already hard-hit Gulf region and cost more than 175,000 American jobs a year,” said Jack Gerard, president and CEO of the American Petroleum Institute.

Plenty of griping

Salazar imposed the moratorium in May after the April 20 blowout of the Deepwater Horizon. Salazar reimposed the moratorium in July after the original was struck down by a federal judge in New Orleans, who faulted the reasoning for the shutdown.

Salazar expected criticism from those who think his announcement was overdue, and those who think it was too soon, and he was right.

“Today’s actions are premature,” said Peter Lehner, executive director of the Natural Resources Defense Council. “Multiple panels are still investigating the accident, and we need to have their answers — and their solutions implemented — before we can confidently move forward with deepwater drilling.

“We should wait for their solutions because until we address the cause, we’re still gambling with the Gulf,” Lehner said.

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

But the moratorium was wildly unpopular in the Gulf and especially in Louisiana, which depends heavily 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.

Jim Noe, who heads a coalition of shallow-water drillers, cautioned deepwater drillers that they should not “pop the cork on the champagne” because “BOEM bureaucrats will be there to stick the cork back in the bottle.”

Landrieu, Vitter not satisfied

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 has not materialized, as companies held on to crews in hopes they would be back in business soon.

Just before the congressional 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 release it only when the Obama administration had lifted the moratorium and expedited the issuance of new permits for drilling in both deep and shallow water.

Landrieu said Tuesday that although “I applaud the administration for taking a step in the right direction by lifting the deepwater drilling moratorium,” she is keeping her hold on Lew while she sees how the permitting process goes.

White House Press Secretary Robert Gibbs said the administration was not responding to political pressure in lifting the moratorium, and he renewed his criticism of Landrieu for “playing politics” with a hold he described as “unwarranted and outrageous.”

Like Landrieu, Sen. David Vitter, R-La., offered a very wary reaction to Tuesday’s news.

“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’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.”

Original Article

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While applauding today’s decision to lift the federal deepwater drilling ban in the Gulf of Mexico, Louisiana operators retain fears that the effects of the moratorium aren’t over.

After halting exploration permits on May 28 and subsequent months of government review, U.S. Interior Secretary Ken Salazar announced today his decision to lift the federal deepwater drilling ban. The announcement comes seven weeks before the moratorium’s Nov. 30 expiration date.

Most deepwater operations have been inactive since the April 20 Deepwater Horizon rig explosion prompted the ban. Salazar warned in a statement that drilling would continue under stringent safety, spill response and blow-out preventer regulations.

“In light of the Deepwater Horizon oil spill, we must continue to take a cautious approach when it comes to deepwater drilling and remain aggressive in raising the bar for the oil and gas industry’s safety and environmental practices,” Salazar said.

For the local oil and gas industry, how federal regulators choose to implement those new safety regulations will determine the strength of their offshore operations in upcoming months.

“I don’t think you’re going to find anyone in south Louisiana that’s driving out to the ports and ready to get on a rig right now,” said Gifford Briggs, vice president of the Louisiana Oil and Gas Association.

Briggs said that operators making their way back to the deepwater Gulf will have to be permitted for a wave of new regulations before they start drilling. Many expect a long wait is in store.

Briggs points to what the shallow water drilling industry experienced this summer. Shallow water operators that met new safety requirements were technically excluded from the moratorium. But a slowdown in safety permitting shut down their operations for months, he said. Six new drilling permits have been issued in the wake of the rig explosion, far below normal activity levels.

“Even Bromwich said he didn’t expect to see (new deepwater) permits in the next couple of months,” Briggs said.

Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, said in statement that Louisiana deepwater industry has been in conversation with federal regulators.

“What we need now is for the Gulf’s energy industry to be allowed to do what it has done for many, many years, and that is to safely and efficiently find and produce the energy we need to fuel the nation,” John said.

Briggs added that today’s announcement adds a drop of stability to what has been an overwhelmingly unstable environment for deepwater operators interested in doing business in the Gulf. “We’ve now taken that first step forward,” he said.

Louisiana’s congressional delegation has been in unison calling for an end to the drilling moratorium. Sen. David Vitter called today’s announcement “welcome, but painfully slow.”

“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,” Vitter said in a statement.

Sen. Mary Landrieu has been putting pressure on the Obama administration to lift the ban, holding up the nomination process for Jack Lew, the president’s nominee to lead the Office of Budget Management.

Landrieu said in a statement that she would lift her hold on Lew’s nomination but plans to examine how the Bureau of Ocean Energy Management is handling permits and whether drilling activity has resumed at a significant level.

“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,” she said.•

Original Article