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Offshore leaders express frustration

By Jonathan Tilove

WASHINGTON — Better days for permitting of deepwater drilling in the Gulf of Mexico are just ahead, the top federal regulator told a congressional panel Thursday, even as leaders of the offshore industry assailed an administration they say has its “boot” on their neck, and is determined to shut them down, “rig by rig.”

“In a very few days there will be several additional permits,” said Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement. Appearing at a hearing on his agency’s 2012 budget, Bromwich told a House Appropriations panel that for the first time since last year’s oil spill, there are now more than 10 deepwater permits pending and “I anticipate a surge in permit applications.”

Bromwich said the breakthrough was the development of containment systems by Helix and the Marine Well Containment Company that could be deployed in the event of an operator loss of well control, which means that applicants who took advantage of either or both of the new systems would now have permits that could be fully in compliance with new regulations imposed in the wake of the Deepwater Horizon disaster.

The question mark, he said, is BOEMRE’s capacity to keep up with a spike in applications. The Obama budget for 2012 calls for a huge increase in the bureau’s budget, some of it paid for by fees on industry, but the fate of that request is uncertain. BOEMRE never received the $100 million supplemental appropriation the Obama administration sought for the current fiscal year.

Bromwich said the bureau has been actively recruiting new engineers and environmental scientists, and is seeking a waiver from the Office of Personnel Management to allow it to exceed the usual federal salary schedule to compete with private industry to hire qualified people for crucial roles in regulating the offshore industry.

Bromwich said there is a “consensus” in Congress that BOEMRE needs more money, with Republicans interested in hiring more permitting personnel and Democrats most interested in hiring more inspectors. But many Republicans are still a long way from agreeing to send more money BOEMRE’s way.

“The budget of the Interior Department and the number of Interior Department employees is staggering. I think there are about 70,000 people,” Sen. David Vitter, R-La., said.

Vitter said expediting drilling permits is “a national priority and they need to get it done,” but that what is lacking is not money. “They need to show some will and leadership,” he said.

The permitting dispute has grown increasingly bitter, and earlier Thursday, at a hearing of the House Energy and Commerce Committee, leaders of the offshore industry depicted an Obama administration that is trying to do them in.

“After the Macondo tragedy in April of last year, Secretary of the Interior Ken Salazar famously proclaimed that he ‘would keep his boot on the neck of BP,’ We quickly learned that his real intention was to keep his boot on the neck of every business owner and worker engaged in the offshore oil and gas industry,” said Jim Adams, president of the Offshore Marine Service Association, whose member companies service oil rigs and platforms.

Jim Noe, a senior vice president with Hercules Offshore and executive director of the Shallow Water Energy Security Coalition, said the slowdown in permitting in both deep and shallow water is placing at risk more than 400,000 jobs across the Gulf Coast connected to offshore energy.

“They are at risk for one simple reason: This administration wants to dismantle our industry, rig by rig, company by company, job by job,” Noe said.

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