US revises deepwater drilling ban, may extend it

12 July 2010 22:12  [Source: ICIS news]

WASHINGTON (ICIS news)--The US Department of the Interior (DOI) on Monday announced a new “suspension” of deepwater drilling in US waters of the Gulf of Mexico, saying the pause in those operations will last until 30 November and perhaps longer.

The department circulated a summary of its new deepwater drilling moratorium, calling the development ban a suspension rather than a moratorium.

A formal announcement of the deepwater drilling ban was expected later on Monday.

The summary said that Interior Secretary Ken Salazar was issuing the new suspension order under authority of the Outer Continental Shelf Lands Act “to ensure safe operations on the OCS”.

The department's initial moratorium on deepwater drilling in the Gulf was ruled invalid by a US federal court, prompting the Obama administration to revise the drilling ban.

“The new suspensions are supported by an extensive record of existing and new information indicating that allowing the deepwater drilling operations ... would pose a threat of serious, irreparable or immediate harm or damage to the marine, coastal and human environment,” the department summary statement said.

The suspension could be extended beyond 30 November, the department indicated, noting that lifting the deepwater ban would be dependent on “submission of evidence by operators demonstrating that they have the ability to respond effectively to a potential oil spill in the Gulf”.

The department indicated that an effective industry response to another major Gulf oil well leak would not be possible while so many assets were devoted to the ongoing BP well disaster.

The summary also indicated that the deepwater drilling suspension might be maintained until all investigations of the BP rig explosion and wellhead leak were completed and the causes of that accident were known.

“Secretary Salazar is open to modifying these new deepwater drilling suspensions based on new information,” the department statement said, “but industry must raise the bar on its practices and answer fundamental questions about deepwater safety, blowout prevention and containment, and oil spill response.”

The American Petroleum Institute (API) said that the new suspension order was “unnecessary and short-sighted” and threatened enormous harm to the nation and the Gulf region.

API president Jack Gerard said that the new Interior Department order “places the jobs of tens of thousands of workers in serious and immediate jeopardy and promises a substantial reduction in domestic energy production”.

Gerard noted that 80% of US oil production in the Gulf came from deepwater leases, as does 45% of natural gas.

“Deepwater is indispensable to a strong and secure US energy future,” Gerard said.  “The moratorium makes that future uncertain.”

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By: Joe Kamalick
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