Ban on deepwater drilling lifted

The Obama administration on Tuesday lifted a controversial deepwater drilling ban, but the move failed to quell attacks over offshore policy or persuade a Gulf Coast Democrat to remove her block on the nomination of a top White House economic adviser.

Interior Secretary Ken Salazar said Tuesday that federal regulators will allow drilling by companies that can demonstrate they have met beefed-up safety standards put in place in recent weeks and months.

{mosads}“I have decided that it is now appropriate to lift the suspension on deepwater drilling for those operators that are able to clear the higher bar we have set,” he said. The ban was imposed after the BP oil spill began and had initially been slated to last until late November.

But Sen. Mary Landrieu (D-La.) said immediately that she will not lift her hold on Jacob Lew, President Obama’s nominee to run the White House Office of Management and Budget.

Landrieu — an ally of the Gulf Coast oil-and-gas industry who said the ban was harming the region’s economy — said she will wait and see how permitting proceeds.

“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,” Landrieu said Tuesday.

Landrieu’s action underscored the political cross-currents on offshore drilling in the run-up to the midterm elections, nearly six months after the blowout of BP’s Macondo well touched off the worst oil spill in U.S. history, dumping over 4 million barrels of oil into the Gulf of Mexico.

The decision to lift the ban about six weeks early follows immense pressure on the White House from the oil industry, Republicans and Gulf Coast lawmakers of both parties. 

They charged the moratorium was a major job-killer — a powerful claim in an election season in which the sour economy is the dominant issue.

Several Republicans said the formal lifting of the ban doesn’t go far enough, warning of a de facto moratorium until permits are issued.

“Until we see new permits issued to allow drilling to go forward, jobs are not being saved or created, revenue for the Gulf region is not being generated and much-needed domestic energy resources are not being tapped,” said Sen. John Cornyn (Texas), who leads the National Republican Senatorial Committee (NRSC), the political arm of Senate Republicans.

But administration officials say they have not succumbed to political pressure but rather raised the bar on safety enough to allow compliant drillers to get back to work.

“Politics in the region, politics outside the region, none of that has played a role in the president’s instituting the moratorium, none of it has played a role in the policy process that’s gone on to devise a way out of the moratorium,” White House press secretary Robert Gibbs said in a briefing Tuesday.

Oil-and-gas industry groups that have for months called for lifting the ban said the real question is how quickly regulators allow development to resume. 

“While we are pleased today that Secretary Salazar has opted to end the job-killing moratorium on deepwater drilling in the Gulf of Mexico, our companies remain doubtful that this announcement is anything more than symbolic, until permits are actually issued for new drilling,” said Randall Luthi, a top Interior regulator under the George W. Bush administration who is now president of the National Ocean Industries Association.

Interior officials say it’s unclear how quickly permits will be issued, noting that depends in part on how fast offshore drillers can show they are complying with tougher standards. 

“My sense is that we will have permits approved before the end of the year. But how much before the end of the year, I can’t say, and how many permits, I can’t say,” said Michael Bromwich, who heads Interior’s Bureau of Ocean Energy Management, Regulation and Enforcement, on a conference call with reporters. 

Salazar added, however, that “I expect we will see a resumption of deepwater drilling very soon.”

Industry groups and Landrieu are also pressing for faster permitting of shallow-water projects that were not covered by the formal ban but face new requirements as well. 

But several environmental groups criticized the deepwater ban’s removal. Natural Resources Defense Council Executive Director Peter Lehner called the action “premature.”

“To ensure a disaster like this never happens again, we must know what caused it in the first place. We’re still waiting for that answer, and until we get it, the moratorium should remain in place,” he said.

Greenpeace went further. “This is pure politics of the most cynical kind. It is all about the 
election season, not safety and environmental concerns,” Greenpeace
USA Executive Director Phil Radford said.

Salazar on Tuesday said regulators have struck the right balance.

“Some will say that the new rules for offshore drilling are too onerous or that the bar we have set is too high. These are the same people who have long fought to weaken regulation and oversight of the oil and gas industry who will make those points,” he said on a conference call with reporters.

“Others will say that we’re lifting the deepwater drilling suspension too soon. … The truth is, there will always be risks associated with deepwater drilling, but we have now reached a point where we have significantly, in my view, reduced those risks,” Salazar added.

Interior has imposed a suite of new requirements around construction of wells, third-party inspections of blowout preventers — the device that failed to deploy properly in the Deepwater Horizon disaster — and other aspects of drilling.

—This post was updated at 2:39 p.m. and 7:17 p.m.