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The federal agency responsible for issuing deepwater drilling permits on Thursday approved a revised permit for Murphy Exploration & Production to drill a well at a depth of 3,325 feet in the Gulf of Mexico, about 170 miles southwest of the New Orleans coastline.

The permit is the agency’s ninth since late February when the Bureau of Ocean Energy Management, Regulation and Enforcement, which is part of the U.S. Department of the Interior, began issuing and reissuing permits in the wake of BP’s disastrous blowout.

That event, which took 11 lives and spewed millions of barrels of oil in the Gulf, is nearing its one-year anniversary.

Murphy’s Well No. A008 is a sidetrack well. That term refers to a well that is drilled to a new location within the original target of the existing wellbore.

The operator had a rig on location when drilling activities were halted by a months-long moratorium following the BP spill. Murphy Exploration has its headquarters in Houston. Murphy’s contracted with the Helix Well Containment Group to use its capping stack to stop the flow of oil should a blowout occur.

According to BusinessWire, Helix Well Containment Group is a consortium of 22 deepwater operators in the Gulf that have combined their technical expertise and resources to develop a well containment response system capable of being immediately deployed in the event of a spill.

They include Anadarko Petroleum Corp., Apache Deepwater LLC, ATP Oil & Gas Corp., Stone Energy Corp., and Murphy Oil Corp., among others.

“We will continue to review and approve permits that satisfy our more rigorous safety and environmental standards and that demonstrate the necessary containment capabilities,” said BOEMRE Director Michael Bromwich.

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By Lee Peck

LAKE CHARLES, LA (KPLC) -

Talking to Louisiana’s Oil and Gas Association, Governor Bobby Jindal didn’t tell them anything they don’t already know. The deadly Deepwater Horizon explosion on April 20, 2010 put deepwater drilling in the Gulf on hold. Since the moratorium only eight new drilling permits have been issued as the one year mark approaches.

“And certainly that’s an improvement over none, but that’s still no where near where we need to be,” said Gov. Jindal.

Before the disaster there were 61 working rigs in the Gulf of Mexico. Today there are only 26. With the livelihoods of Louisiana businesses in the balance, Jindal says they continue to push the Department of Interior.

“We want them to regulate drilling so it is done safely. But at the same time we don’t want them to shut down this drilling activity off our coast. What worries me is the impact not only on the big companies, but more importantly what it’s going to do to our fabrication shops our supply vessels and our caterers – those small Louisiana businesses,” said Jindal.

It’s not just along the Gulf coast, the disruption is being felt nationwide as Louisiana accounts for 1/3 of the U.S. energy supply.

“We have 25% of all the oil, 25% of all the natural gas that’s produced in the nation comes from the state of Louisiana. And 50% of oil the diesel fuel and the gasoline that fuels the engines of this country all flows through the pipeline infrastructure of our state through our refineries,” said Don Briggs, President of the LA Oil and Gas Association.

According to Briggs there’s only one way to increase our energy independence from overseas.

“Stop importing so much. And the way we do that is drill more. Because we have the resources here in the U.S. To drill not just in Louisiana, but in other parts of the country,” said Briggs.

Governor Jindal said part of the reason it’s so hard to get permits is because of the unpredictable regulatory environment. He’s urging the feds to level the playing field and make it clear what companies need to do to get the green light to drill.

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A star-studded line-up shows their support in the Louisiana Oil and Gas Association at their annual meeting in Lake Charles on Tuesday.

At the top of that list, former US Attorney General John Ashcroft.

“We have to have more energy- not less energy.” Ashcroft says, “it’s not time for us to curtail production but it’s time for us to expand production.”

John Ashcroft is a former Governor, Senator and US Attorney General. He says today’s economic climate poses several issues not only for oil and gas companies but other industries as well.

“I’m afraid the debt that burdens America and keeps threatening the tax environment destabilizes all industries,” Ashcroft said.

Don Briggs of the Louisiana Oil and Gas Association says one of the industry’s biggest issues is actually almost a century-old.

“Number one,” Briggs said. “We’re looking at what we can do to change the legal climate with legacy lawsuits in the state of Louisiana.”

Legacy lawsuits, or court rulings that allege contamination from nearly a century ago. Back then, the techniques the industry used were legal and in some cases, considered “ahead of their time.”

Briggs says there’s more than 200 of these lawsuits in Louisiana alone- and they’re driving investors away.

“It’s very difficult to drill and operate in a state that has that kind of climate,” Briggs said.

While both Briggs and Ashcroft recognize the issues facing the oil and gas industry, they also recognize the necessity of energy.

“There are ways for us to manage the production of oil and gas so we have more energy and not less energy.” Ashcroft says, “it’s time for us to recognize that as a nation.”

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Governor says he would veto any bill doing away with the exemptions as

a way to offset budget shortfalls.

BY TODD C. ELLIOTT

AMERICAN PRESS

Members of the Louisiana Oil and Gas Association are concerned about a tax proposal expected to come up in the next regular legislative session.

It was among topics discussed at the Louisiana Oil and Gas Association’s annual meeting at L’Auberge du Lac Casino Resort on Tuesday. Gov. Bobby Jindal was keynote speaker.

“There is no doubt that the oil and gas industry is a fundamental and essential part of job creation,” local businessman Steve Jordan of Central Crude Inc. said. “And in economic development in our state.”

Jindal told the crowd that when the Legislature convenes in about two weeks, he expects a bill to be filed that would remove state tax exemptions on horizontal drilling for oil and natural gas wells as a way to help offset budget shortfalls.

He said that he would veto any such legislation.

“We’ve already heard special interests and certain lobbyists and legislators talking about removing the tax exemption that’s already in place for horizontal drilling in Louisiana,” Jindal said. “If they do that, all those rigs that are the Haynesville Shale; it could become more profitable for them to ship to Texas, to Pennsylvania, to other shale plays.”

Jindal said that Haynesville Shale— which is becoming a major producer of natural gas — has created thousands of jobs. As a result, he said, the shale region in northwest Louisiana has dumped billions of dollars into the state economy. Jindal hopes that it will continue without the hindrance of state taxes.

“Our economy has outperformed the regional and national economies,” Jindal said. “One of the reasons is we’re not raising taxes.”

April 15 is the deadline for legislators to prefile bills for the coming session.

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By Bruce Alpert

WASHINGTON — With a government shutdown possibly looming this weekend, federal employees still haven’t been told whether they are considered “essential” and will continue to work or will be forced to take unpaid furlough.

obama-white-house.jpgView full sizeThe Associated PressPresident Barack Obama has summoned Republican and Democratic congressional leaders to the White House on Tuesday to try to break a budget impasse that threatens a shutdown.

President Barack Obama has summoned Republican and Democratic congressional leaders to the White House on Tuesday to try to break a budget impasse that threatens a shutdown when the latest 2011 stop-gap spending bill expires Friday night.

“The toughest thing is the uncertainty, not knowing,” said Terrence Johns, president of the American Federation of Government Employees Local 2341, which represents many of the 1,200 workers at the National Finance Center, the largest New Orleans federal employer.

Johns said workers are getting “pep talk” memos from Agriculture Secretary Tom Vilsack on how “we need to keep working for the American people and how everyone hopes to avoid a shutdown.”

The Finance Center, which does payroll for the Agriculture Department and other federal agencies, has refused, as have most federal agencies, to release its plans for a government shutdown, a decision criticized by two leading federal employee unions.

As of 2006, the last year data are available, about 19,000 people worked for the federal government in Louisiana. Other federal agencies with a strong presence in the New Orleans area include the Department of Housing and Urban Development, the Department of Homeland Security, Federal Emergency Management Agency, the Department of Veterans Affairs, the Environmental Protection Agency and the Bureau of Ocean Energy Management, Regulation and Enforcement.

Michael Bromwich, the energy regulation bureau’s director, said last week that during the government shutdown in 1995, the federal government discontinued the permitting process for offshore oil and gas development, and he presumed that would be the case again. The bureau recently renewed the permitting process that had been stopped in the wake of last year’s BP Gulf disaster.

In 1995 there were two shutdowns, lasting five and 21 days.

Under federal guidelines for a shutdown, federal agencies can continue to keep certain essential employees working, even though their agency hasn’t been financed by Congress. Those “essential” employees wouldn’t be paid for that work, however, until the money for their agencies is approved.

Among those who would be kept on are employees working on national security matters, those who provide benefit payments such as Social Security, and medical personnel who provide essential medical care and ensure safe use of food and drugs.

Also considered essential, according to government documents, are air traffic control workers, border and coastal protection employees, federal correctional and law enforcement officers, and workers who oversee essential elements of the U.S. currency management.

The president and members of Congress would continue to work, though both Democrats and Republicans in Congress have voted for legislation that would bar them from being paid during a government shutdown.

Likely to stop, until financing is worked out, are the processing of new Social Security and other federal benefit applications as well as applications for new and renewed passports.

The Internal Revenue Service hasn’t said how a shutdown would affect the processing of tax returns, as the April 18 tax filing deadline draws closer.

White House spokesman Jay Carney continued to express optimism Monday that an agreement will be reached, noting that the White House and congressional Democrats have met more than half the spending reductions approved by House Republicans — about $33 billion out of the $61 billion in the House-approved bill. That represents $73 billion less than Obama’s budget proposed for 2011, Carney said.

But even harder than agreeing to a spending level for the rest of the year is what to do about a series of riders House Republicans added to their spending bill to bar financing for family planning services, National Public Radio, the Corporation for Public Broadcasting, the 2010 health-care overhaul law and for an Environmental Protection Agency effort to reduce carbon emissions.

Democrats and the president labeled the riders as unacceptable.

House Speaker John Boehner, R-Ohio, wasn’t optimistic Monday about reaching a new agreement.

“It’s become sadly evident to me and to the American people, that the White House and Senate Democrats are just not serious yet about enacting real spending cuts,” Boehner said.

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April 4, 2011

With natural gas now front and center on President Obama’s energy agenda, his administration has called for a broad-based panel to be formed to examine potential risks associated with hydraulic fracturing (fracking).

The Secretary of Energy Advisory Board (SEAB), an independent advisory committee that serves Energy Secretary Steven Chu, has been tasked with the responsibility of forming a subcommittee to study the issue. The subcommittee will be supported by the Department of Energy (DOE), Environmental Protection Agency (EPA) and the Interior Department, and its members will extend beyond SEAB membership to include industry, environmental experts and states, according to the president’s blueprint for a secure energy future, which was released Wednesday.

“The subcommittee will work to identify, within 90 days, any immediate steps that can be taken to improve the safety and environmental performance of fracking, and to develop, within six months, consensus [recommendations] on practices for shale extraction to ensure the protection of public health and the environment,” it said.

“This is in addition to the ongoing EPA fracturing study. Other recommendations are 1) disclosure of fracturing chemicals; 2) public meetings to discuss expansion of shale development on federal lands; and 3) DOE will sponsor research on the impacts of fracturing on water resources. Bottom line: new rules potentially coming in 90 to 180 days…and beyond,” said an energy analyst with Tudor Pickering Holt & Co. Securities Inc (see Daily GPI, Feb. 9).

Other observers suggested that the white light of a thorough federal study might just settle some of the dust around the issue.

Interior’s Bureau of Land Management (BLM) said it will hold a series of regional public meetings later this month — in Bismarck, ND; Little Rock, AR, and Denver, CO — to discuss the use of fracturing techniques to simulate gas production on federal lands.

“These forums will help inform BLM as we work closely with industry, the states, other federal agencies and the public to develop a way forward on natural gas so that the United States can safely and fully realize the benefits of this important energy resource,” BLM Director Bob Abbey said.

At the same time, the “DOE and EPA are establishing a mechanism to provide technical assistance to states to assess the adequacy of existing state regulations. EPA will continue to perform a strong backstop role under federal environmental laws and will take actions, as necessary, to protect public health and the environment,” the blueprint said.

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