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BP Plc (BP/), whose Macondo blowout in the Gulf of Mexico caused the biggest offshore oil spill in U.S. history, is drilling the first producing wells at the region’s Atlantis field since a moratorium on deepwater operations was lifted almost two years ago.

The Atlantis and Mad Dog hubs are working again after months of repairs and maintenance, partner BHP Billiton Ltd. (BHP) said in a conference presentation published on its website today. Mark Salt, a spokesman for London-based BP, confirmed that the fields are operational and declined to comment on levels of production.

BP, the owner of the Macondo well that was the source of the 2010 explosion, has lost a third of its market value since the disaster. BP’s output in the Gulf of Mexico, some of the most profitable in its portfolio, has dropped since President Barack Obama banned deepwater drilling for months after the spill and BP instituted stricter safety standards.

Chief Executive Officer Bob Dudley has said he wants to focus more on the Atlantis, Mad Dog, Thunder Horse and Na Kika fields in the Gulf. The company has six rigs working in the region and plans to have a record eight by the end of the year, Dudley said in July.

The Atlantis field, which is drilled using a mobile unit, has a capacity of 200,000 barrels of oil a day and 180 million cubic feet of gas, according to BP’s website. Mad Dog, where the company operates a platform, can produce 100,000 barrels of crude a day and 60 million cubic feet of gas.

BP reported a loss of $1.4 billion in the second quarter. Global output slipped 7.4 percent to 2.3 million barrels of oil equivalent a day.

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Three Republican U.S. senators are taking credit for an investigation into a “potential cover-up” of documents that led to a Gulf of Mexico drilling moratorium more than two years ago.

President Barack Obama, through his Department of the Interior, issued the drilling ban following the 2010 explosion of BP’s Deepwater Horizon well. It spanned six months and was suspended when the department’s new safety guidelines were implemented.

U.S. Sens. David Vitter of Metairie, who serves as Louisiana’s junior senator, Jeff Sessions of Alabama and John Cornyn of Texas are questioning the accuracy of an executive oil spill report that led to the moratorium’s creation. Moreover, they contend certain government officials may have altered portions of the report to provide political cover for the White House.

Vitter originally asked the Interior Department’s Office of the Inspector General to investigate mistakes in the report back in 2010 and said he was told “any mistakes were inadvertent.” He added that other evidence has since surfaced suggesting collusion between the inspector general’s staff and officials at the Interior Department during that investigation.

Then two months ago, all three senators asked for a separate follow-up investigation from Kevin L. Perkins, chairman of the federal Integrity Committee, which is charged with looking into claims made against inspectors general. Vitter said the committee met Thursday to discuss the request.

“We’re confident that this independent Integrity Committee will conduct a thorough and accurate investigation and get to the bottom of this potential cover-up,” Vitter said. “It’s pretty outrageous to know that politics seems to be likely influencing the Office of the Inspector General in lieu of the science.”

Vitter said he has “alarming evidence from a whistleblower” that shows the original investigation he requested on the oil spill report may not have been independent and “could have even involved the acting inspector general tampering with the facts.”

USA Today can be credited with breaking the story two months ago when it reported Acting Inspector General Mary Kendall took part in meetings where a peer review of scientists supporting the moratorium was discussed. Kendall is accused of “editing draft versions” of the oil spill report when it became evident that the peer review may not have been correct, Vitter said.

The request signed by the three senators and addressed to the Integrity Committee stated that Kendall “proposed deleting entire pages of key findings and analysis drafted by senior OIG staff, including sections detailing the role of the White House in revising the 30-Day Report in the early morning hours (between 2 and 3 a.m.) of May 27, 2010, to give the untrue impression that the administration’s political decision to impose a six-month drilling moratorium was reviewed by independent peer review experts.”

The U.S. House Natural Resources Committee is doing its own investigation as well. Documents it has obtained show that “Ms. Kendall revised the draft OIG investigation report to strike a sentence stating the role of President Obama in requesting the 30-Day Report,” Vitter wrote in his request to the Integrity Committee.

Over the past few months, Interior officials have testified and said in interviews the department simply made corrections to the report when they were made aware of various errors. So far the department and the White House have reportedly turned over more than 2,000 documents, including emails, related to the investigations.

“Immediately after being made aware of the error in the executive summary of the report in June, 2010, the department moved quickly to clarify the scope of the peer review and to apologize to the peer reviewers,” Interior spokesman Adam Fetcher said in a written statement Friday.

He said the “bottom line is that we cannot forget the lessons of the Deepwater Horizon oil spill.”

With the full force of the federal government responding to the largest oil spill in U.S. history, he added that Interior Secretary Ken Salazar recognized that the “nation could neither afford the risk nor respond to a second catastrophic spill” in the Gulf at the same time.

“Industry is now back to work and complying with new and more rigorous safety practices, and there are more rigs at work in the deep water of the Gulf of Mexico than at any time since May 2010,” Fetcher said.

As for the committee investigations, he said the department would continue to cooperate with their “legitimate oversight interests,” but added citizens would be better served by Congress if it passed into law the department’s new safety regulations that have come about since 2010.

“This investigation, made up of an ever-changing and unsettled set of requests from the committee, continues to spend taxpayer resources to re-litigate an issue that was resolved two years ago,” he said.

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The number of rigs operating in federal waters off the Louisiana coast has surpassed the count that existed before regulators placed a ban deep-water drilling in the Gulf of Mexico nearly two years ago.

The number of working rigs on the federal Outer Continental Shelf off the state coastline hit 41 last week, according to figures the state Department of Natural Resources released Friday.

This is the first time the weekly count has moved above 40 since regulators imposed the drilling moratorium in May 2010 in response to the BP oil spill disaster. The ban was lifted in October 2010.

The rig count in federal waters off Louisiana has been in a steady decline since 2000 when the area supported around 120 active rigs, according to Baker Hughes.

Federal waters off the coast had an average rig count of 42 in the weeks leading up to the federal moratorium in 2010. The number of active rigs fell to a low of 11 in the months following the ban.

By this time last year, 23 active rigs had returned to the area.

The current count is up from 40 active rigs the week of April 16.

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This year, Feb. 27 isn’t just the Monday after Mardi Gras, when thousands of celebration-weary New Orleanians drag themselves back to the first full work week after Carnival. It’s the day the massive trial over liability in the 2010 Gulf of Mexico oil spill is scheduled to begin in the courtroom of U.S. District Judge Carl Barbier.

Assuming the case doesn’t settle — the parties to this case have said they’re going to trial — the event is expected to be the largest environmental litigation in history and the biggest event ever held at federal court in New Orleans alongside the levee breach litigation.

Like the April 20, 2010, explosion and sinking of the Deepwater Horizon rig, which killed 11 men and unleashed an 86-day spill from BP‘s well, the trial will be an audacious event. Requiring extensive preparation, the trial will unfold in three phases and is expected to take most of the year. It has already brought scores of lawyers to town each week since September 2010 and could attract journalists from as far away as London.

At stake are billions of dollars in damages that could be awarded by the court to help Louisiana repair its economy and fix its eroding coastline. The case will also contain a huge fight over punitive damages, which are levied above and beyond documented damages in an attempt to punish the offender. If punitive damages are awarded that are more than the actual damages in the case, the issue could be appealed to the U.S. Supreme Court.

“It will be the biggest environmental litigation in the country’s history,” said Alabama Attorney General Luther Strange, who serves as co-coordinating counsel for state interests with Louisiana Attorney General Buddy Caldwell.

“It’s got to be one of the most complex cases in history, not to mention the amount of money involved, which is very large,” said Edward Sherman, a Tulane University law professor who studies complex litigation.

The goal of the trial will be to determine the proportion of fault among the involved companies, a decision that will in turn be used to calculate how much each should pay in penalties and damages.

While the case will cover much of the same material that was the subject of the 2010 Coast Guard hearings and the various commissions that examined the disaster, the trial is expected to create a more comprehensive narrative about what happened and look more deeply at the safety cultures of the companies involved.

Epic in size and scope

Bringing the case to trial just 22 months after the event required conducting as many as seven depositions a day, sometimes on both sides of the Atlantic, to make sure that 303 witnesses were questioned in time for trial. The parties to the litigation have produced 72 million pages of documents that have been distilled to 21,000 exhibits for trial, but Magistrate Judge Sally Shushan is pleading with the parties to find a way to whittle that number down.

At its core, the trial is a maritime law proceeding that was triggered when Transocean, the owner of the rig, filed legal documents seeking to limit its liability in the incident. But the case has expanded into an omnibus proceeding that will hear many civil claims tied to the spill. In addition to weighing maritime law, the case will also rely heavily on the Clean Water Act, the Oil Pollution Act, the Outer Continental Shelf Lands Act and statutes that carry penalties. Because it’s a judge trial rather than a jury trial, the weight of making all of these decisions about a company’s liability, penalties and whether its conduct has been egregious enough to warrant punitive damages falls on the shoulders of Barbier, who was appointed by President Bill Clinton in 1998.

The litigation consolidates 535 lawsuits originally filed all over the country. Some 110,000 individuals and businesses have also gotten involved in the case by filing “short forms” to hold their place in the litigation. At the same time, many of them are trying to resolve their grievances through Kenneth Feinberg’s Gulf Coast Claims Facility, which is financed with $20 billion from BP. If they reach a final settlement with Feinberg, they are required to sign a waiver releasing legal claims, and they can’t stay in the litigation.

There are many different types of plaintiffs in the New Orleans case. The federal government, states like Alabama and Louisiana, and local governmental bodies are seeking to recuperate natural resource damage costs as well as the costs of responding to the oil spill and damage to the economy. Several states in Mexico have even filed claims. Many private parties are also in the litigation, such as fishers, seafood processors, restaurants, land owners and others whose businesses were harmed. The suit also includes people who got sick, saw their boats damaged or were unhappy with the payment they received from BP for responding to the spill or cleaning up the oil, but those claims won’t be resolved until later.

The trial will not delve into criminal matters, and shareholder suits are being aired in a separate consolidated proceeding in Houston.

Many different defendants are in the hot seat for their work on the well, including BP, which held the lease on the Macondo well; Transocean, which owned the Deepwater Horizon rig; Halliburton, which poured the cement lining in the well; and Cameron, which manufactured the blowout preventer that was supposed to shut down the well in an emergency. There’s also the dispersant manufacturer, Nalco, and other companies that were involved in responding to the spill. In addition, parties like the U.S. government and states could also find themselves as defendants when dealing with accusations about their role in stopping the oil or overseeing the cleanup in later stages of the litigation.

3-tiered legal drama

The trial will unfold in three phases and could take most of the year.

The first phase, which starts on Feb. 27, is known as the “incident” phase. It deals with everything leading up to the explosion of the Deepwater Horizon rig and the start of the oil spill. The first phase will include the biggest number of players; defendants are expected to highlight one another’s mistakes to shift blame.

The second phase, which is scheduled to start in mid-July, will deal with the efforts to stem the flow of oil from the well between April 22, 2010, when the Deepwater Horizon fell over and sank, and September 19, 2010, when BP finally succeeded in sealing the well permanently. It will also examine the critical question of how much oil was actually released into the Gulf of Mexico, which will be the basis for penalties under the Clean Water Act.

The main players in the second phase of the trial will be BP and the government. Expect plaintiffs to paint a picture of a company that was completely unprepared to shut in the well, and expect BP to blame the federal government for its directives.

There’s no start date scheduled for the third phase, which will deal with the efforts to contain and clean up the oil that was spilled. Those efforts included burning the oil, applying dispersants to break it up and using booms to skim it off the water’s surface. The court will also look at where the oil was carried and how those efforts to contain or disperse the oil affected where it went.

There’s some difference of opinion about the content of the third phase, but it is believed that questions of cleanup workers’ health and whether boat owners were properly compensated will be handled in later, still-unscheduled proceedings. The third phase of the trial again will have BP and the government as main players, but it will also feature the dispersant manufacturer and subcontractors that worked on collecting or getting rid of the oil.

Punitive payday possible

One of the central reasons that plaintiff attorneys, led by New Orleans attorney Stephen Herman and Lafayette lawyer Jim Roy, say they brought the case is to try to hit the companies with substantial punitive damages if the court finds that they acted with “gross negligence” or “willful misconduct.”

Exxon Shipping Co. v. Baker, the case emanating from the 1989 grounding of the Exxon Valdez tanker that was decided by the U.S. Supreme Court in 2008, said punitive damages should be equal only to the amount of actual environmental and economic damages. But a footnote in the decision leaves open the possibility that a court could award three or even four times the amount of the judgment in punitive damages in cases where the “defendant’s wrongful conduct was motivated solely by unreasonable financial gain and the unreasonably dangerous nature of the conduct, together with the high likelihood of injury, was actually known” by company leadership.

Many, such as Blaine LeCesne, a tort law professor at Loyola University who has written on the topic, believes that the BP oil spill is that case. “You’ve never had the constellation of circumstances that you had here,” LeCesne said.

LeCesne wants to see the case go to trial and run to its conclusion because he thinks that a high multiple of punitive damages will be awarded. Such a finding would be quite lucrative for Louisiana, and would kick start a chain of appeals that could lead to the U.S. Supreme Court sometime in the next five to six years.

Not everyone sees it that way. Defendants say that any award of punitive damages would be restricted to commercial fishers or people who had oil directly on their property, leaving out people like restaurant and condo owners. Meanwhile, the Oil Pollution Act is silent on the topic of punitive damages, and the famously conservative Fifth U.S. Circuit Court of Appeals could easily say that the case should have been decided under the Oil Pollution Act rather than maritime law, throwing out any punitive damage award.

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Oil and gas exploration and production in the Gulf of Mexico will some day return to pre-BP spill levels, the president of Chevron North America Exploration and Production Company, Gary Luquette said Thursday.

But the rigorous permitting, safety and verification requirements imposed after the April 2010 BP disaster are here to stay, Gary Luquette said during an interview with The Daily Advertiser before the Greater Lafayette Chamber of Commerce annual banquet, where he was keynote speaker.

“It’s a new normal,” Luquette said.

The industry hasn’t found its stride since the Deepwater Horizon platform operated by BP off the coast of Louisiana exploded and sunk, creating the largest oil spill in U.S. history.

That disaster, which killed

11 workers, led the federal government to impose a six-month moratorium on deepwater drilling that was followed by more stringent permitting and safety regulations.

“I think activity levels can and will return to pre-Macondo (spill) levels,” he said. “The effort and rigor in getting permits approved won’t return.”

Luquette said that’s a good thing for Louisiana and the industry. The BP disaster tainted the entire industry.

Tighter permitting, regulations and oversight will help the industry rebuild public trust, he said.

The “new normal” may be too costly for some of the small independent companies to survive, Luquette said.

“In the end,” he said, “the standards are going up. It’s your responsibility to enact them.”

The Gulf of Mexico is still a major source of oil and natural gas and Chevron maintains a presence there, in deepwater and shallow water, said Luquette, a 1978 civil engineering graduate of UL Lafayette.

More than half of the company’s 2012 budget is allocated to Gulf of Mexico activity. Today, Chevron has 10 rigs operating in shallow water, he said.

Lafayette plays an important role in the industry with numerous supply and service companies operating here.

Chevron alone has 300 workers in its Lafayette office and another 300 or so working offshore out of the Lafayette office, Luquette said.

President Obama said last week in his State of the Union address that he wants to end “subsidies” to the oil and gas industry which makes billions of dollars in profits. Luquette said the energy industry creates jobs and creates wealth for the federal government.

In 2011, the oil and gas industry paid $86 million a day to the federal government in royalties, rents and tax revenue, he said. The industry also employs more than nine million either directly or indirectly.

The industry doesn’t need bailouts and such, just a level-playing field, the same so-called subsidies and breaks the federal government provides other U.S. industries and those from foreign nations, Luquette said.

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Small oilfield companies and their employees took the biggest hit during the six-month drilling ban that followed the 2010 BP oil spill, according to a report released Monday.

The report’s findings are based on data collected via a survey of 102 oilfield-related businesses in Louisiana. It says 41 percent of the companies failed to show a profit, 50 percent laid off workers and 76 percent lost cash reserves as a result of the slower drilling-permit process in the Gulf of Mexico.

The six-month drilling ban and subsequent slowdown in permit approvals related to new regulations were federal reactions to the April 2010 BP oil spill.

The report was commissioned by Greater New Orleans Inc., an economic-development group that serves a 10-parish area. That area does not include Terrebonne and Lafourche, but the local parishes were included in the report.

Michael Hecht, president of Greater New Orleans Inc., detailed the report’s findings in a news conference held Monday at Superior Energy in Harvey, saying he hopes the work sheds light on the “hidden victims of the moratorium,” primarily small domestic companies.

The data was compiled using detailed surveys of a range of oilfield-related businesses, from shipbuilders to offshore caterers. Half the surveys were submitted anonymously, but a quarter of the 53 that did identify themselves are based in Terrebonne and Lafourche.

Among those were RigChem, a Houma-based chemical manufacturing and distribution company with a staff of 15.

RigChem President Lori Davis said she lost 70 percent of her business during the height of moratorium and remains 30 percent lower than compared to pre-spill levels.

She amended the company’s benefits plan, a cost-saving measure that enabled her to keep staff at pre-spill levels.

“We had two employees who chose to leave anyway. They wanted to work at bigger companies,” she said, adding that meeting the new safety and training requirements made it costly to stay competitive.

“The regulations are really going to strangle small businesses,” she said.

Davis said she is looking at opportunities overseas, but it takes longer for a small company like hers to make inroads in new markets.

“I’m hoping this will bring more stability,” she said. “But it definitely takes time. We don’t have the international brick and mortar in these locations like Halliburton does.”

According to the report, 46 percent of the companies surveyed have moved all or some of their operations away from the Gulf of Mexico.

Lafourche Parish President Charlotte Randolph said when she met with President Obama in the spring of 2010 and asked him to reconsider the moratorium, “he said the mood of the country was such that they had to stop drilling for a short time,” Randolph said, adding, “That ‘short time’ still exists today.”

The comments came after Randolph praised Coast Guard Rear Adm. James Watson, the recently appointed director of the Bureau of Safety and Environmental Enforcement, following his announcement that 10 new rigs would come to the Gulf of Mexico this year. She said last week that the announcement was “the best news we’ve heard since April 20, 2010,” and that it “may remove some of the uncertainty that was hanging over us.”

But on Monday, Randolph said that the ban’s legacy continues to haunt the Gulf. Twenty-three rigs won’t be able to return to the Gulf as planned until after they complete existing overseas contracts overseas, she said.

And while the offshore industry is growing healthier, the permitting process for shallow-water drilling, the bread and butter of smaller energy companies, remains slow.

“Deepwater is going to help Mr. Exxon and Mr. Chevron, but what about Mr. Cheramie? His boats are still tied up on the bayou,” she said, referencing Edwin Cheramie & Sons Boat, a marine-services company in Larose. “In shallow water, it’s the independent companies and the smaller vessel owners that suffer. That still leaves us with that era of uncertainty.”

Lizette Terral, president at J.P. Morgan Chase Bank in New Orleans, said that public data does not paint a complete picture of the continuing harm the moratorium has wrought on smaller businesses, many of which have dipped into their assets.

“Businesses have been resisting layoffs, hoping that the permit wait time will decrease,” she said.

According to the report, 27 percent of surveyed businesses have used more than half of their cash reserves since the spill.

Business owners have also taken a hit; 82 percent lost some personal savings as a result of the moratorium and subsequent permit slowdown, and 13 percent reported they’d lost all of their personal savings.

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By  Sen. David Vitter

This week marks one year since the Obama administration lifted its formal moratorium on deepwater drilling, but thanks to the Interior Department​’s frustrating approach to energy development, much of the Gulf of Mexico is still suffering the effects of a permitting logjam.

On Tuesday, I joined Rep. Jeff Landry (R.-La.) at a meeting with Bureau of Safety and Environmental Enforcement (BSEE) Director Michael Bromwich and other officials from the Interior Department to discuss the unacceptably slow pace of permits for offshore energy exploration and production in the Gulf.

We were hoping for a productive discussion about how we can work together to remove the Interior Department’s bureaucratic roadblocks and allow our Gulf Coast energy industry to get back to work.  Unfortunately, we just got the same old company line:  They’re working on extending leases and granting permits on a ‘case-by-case’ basis.

This just adds to our frustration, especially as we’ve seen 14 rigs leave the Gulf of Mexico.  Three years ago, the federal government brought in $10 billion in revenues by selling offshore drilling leases.  But the Obama administration has achieved quite a feat with its energy policy:  In just three years, lease-sales revenue has plummeted from $10 billion to a grand total of zero dollars.

It’s pretty simple, actually.  The Obama administration decided in fiscal 2011 that it just didn’t need to do any leasing on the Outer Continental Shelf—even though there are vast unexplored oil and gas reserves in the Gulf of Mexico and elsewhere just waiting to be developed.

Revenue can’t be generated from lease sales that don’t happen, and jobs can’t be created on leases that private industry can’t acquire.  We’re in a severe fiscal crisis, and we’re facing significant economic challenges related to job creation, yet the administration continues to neglect our offshore resources.

I recently sent a letter—which was signed by my Republican colleagues Senators Richard Shelby (Ala.), Kay Bailey Hutchison​ (Tex.) and John Cornyn​ (Tex.)—to Interior Secretary Ken Salazar and the BSEE’s Bromwich, who also heads the Bureau of Ocean Energy Management, Regulation and Enforcement, urging them to provide the status of all anticipated lease sales for the next fiscal year, as well as current planning areas under review for inclusion in the next five-year plan.  This kind of accountability is absolutely crucial to reversing the energy policies that have killed thousands of good jobs in the states we represent.

Not surprisingly, the financial scope of these bad policies reaches far beyond Washington, D.C.  Under the Gulf of Mexico Energy Security Act, energy-producing states along the Gulf Coast receive a share of revenues from certain lease sales.  But if there are no lease sales, then there are no revenues.  This puts further strain on states that are already struggling to make ends meet.

Even worse, the 100% fall-off in lease-sale revenue from 2008 to 2011 will have long-term economic effects that include lost jobs, lost royalties and lost rental fees—which certainly won’t help our economy recover.

The administration’s attitude toward permitting also creates tremendous uncertainty for companies that want to invest in energy exploration.  If companies continue to face challenges in obtaining permits, future lease-sales revenue will suffer.  No company wants to own a lease if there is not a reasonable expectation that its exploration plan or permits will be approved.  A recent HIS Global Insight study concluded that fixing the permitting process would result in 230,000 new or retained American jobs, more than $44 billion more in gross domestic product (GDP), nearly $12 billion in tax and royalty revenues for federal and state governments, and a reduction of $15 billion in payments to foreign governments for imported oil.

In fact, recent reports indicate that as many as 20 deepwater drilling rigs could leave the Gulf of Mexico because of the Interior Department’s slow pace on issuing permits.  Much of the backlog is due to the administration’s voiding of drilling permits and its extended moratorium, and it’s unacceptable that permits are not being issued at a reasonable pace.

Good-paying jobs can be created without federal loan guarantees or government grants.  If the permitting process is reliable, these companies are ready and willing to invest in energy exploration.

And because lease-sale revenues and royalties from energy production are a significant source of revenue to the federal treasury, increasing Gulf Coast energy exploration is crucial to addressing our nation’s fiscal crisis.

It won’t be easy to balance the federal budget, rein in the trillion-dollar deficits of the Obama administration, and put Americans back to work, but a few simple changes can help.  The President can start by allowing energy producers to buy the leases they want, and by giving them the permits they need to develop the resources that fuel our economy.

It’s not complicated.  As the President is fond of saying, “It’s just math.”

Original Article

“Political uncertainty” bedevils Gulf region and discourages business investment

Ten oil rigs have left the Gulf of Mexico since the Obama Administration imposed a moratorium on deepwater oil and gas drilling in May 2010, according to documentation obtained from Sen. David Vitter’s (R-La.) office.

The ten rigs named in the document are: Marinas, Discover Americas, Ocean Endeavor, Ocean Confidence, Stena Forth, Clyde Bourdeaux, Ensco 8503, Deep Ocean Clarion, Discover Spirit, and Amirante. The rigs have left the Gulf for locations in Egypt, Congo, French Guiana, Liberia, Nigeria and Brazil.

“This highlights the problem we have with losing domestic energy production as a result of the drilling moratorium and the slow permitting,” David Kreutzer, a research fellow in Energy Economics and Climate Change at the Heritage Foundation, said. “We must also keep in mind that the impacts are not instantaneous, the rigs may be idle for a while, but once they move it’s going to be difficult to move them back once they are drilling in say Nigeria or Brazil.  The oil companies must have confidence they can move forward with their drilling plans and to know these plans won’t be revoked. Only certainty will bring them back.”

Although federal officials announced they were lifting the restrictions last October, a “de-facto moratorium” remains in effect that stifles energy production and undermines large and small businesses in the Gulf region, industry officials have argued.

“I don’t think the people in Washington D.C. who implement these policies have an understanding of how much this has impacted our economy, especially in Louisiana,” Renee Baker, the state director for the National Federation of Independent Business (NFIB), said. “We can’t just look at the large businesses to understand what’s happening, there are small businesses that do a lot of services for the rigs and they have been set back. We just want to see people get back to work.”

Unfortunately, the “political uncertainty” surrounding the Gulf region has discouraged companies from making investments that could help spur economic growth, Don Briggs, president of the Louisiana Oil and Gas Association (LOGA), laments. Even before the 10 rigs cited in the document from Vitter’s office pulled out, eight other rigs that were planned for the Gulf were detoured away, Briggs said.

“When you have companies that would be spending hundreds of millions of dollars, or some cases, billions of dollars, they need certainty,” Briggs explained. “We don’t have that now and I don’t expect that we will anytime soon. We will be in a deteriorating position until this changes.”

Briggs also questions the necessity of the moratorium that was imposed in response to the explosion of British Petroleum’s (BP) Macondo oil well on April 20 of last year. The accident resulted in the death of 11 workers and caused an estimated five million barrels of crude oil to spill into the Gulf.

Despite whatever missteps were involved with BP’s oil drilling operations, the industry as a whole has a “great safety record” in the Gulf, but this has not been taken into account, Briggs noted.

“We would have implemented new rules and guidelines without any federal action. This could have been done without a moratorium. There is no getting around how severe the regulatory fallout has been for us,” Briggs said.

Meanwhile, Sen. David Vitter has called out top Obama administration officials for issuing what he views as conflicting and misleading statements on the correct number offshore drilling permits. A U.S. Justice Department motion filed in March stated there are 270 shallow water permit applications pending and 52 deepwater permit applications pending.

But in testimony before the Senate Energy and Natural Resources Committee this past March, Interior Secretary Ken Salazar said the Interior Department had received only 47 shallow water permit applications over the previous nine months and that only seven deepwater permit applications were pending. Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation, and Enforcement, told Vitter personally that only six deepwater permits were pending, and he publicly stated that deepwater permits would be limited because “only a handful of completed applications have been received.”

Over the past three months, deepwater permits are down 71 percent from their historical monthly average of 5.8 permits per month, Robert Bluey, a blogger and journalist with the Heritage Foundation, has reported on The Scribe. Shallow-water permitting have also fallen in past few weeks by 34 percent from the historical monthly average of 7.1 permits, Bluey reported

Original Article