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Deepwater Drilling Ban Ends

The Obama administration lifted its ban on deep water drilling seven weeks ahead of schedule Tuesday, Oct 12, stating that the new rules cut the risk of a repeat of the BP oil spill, caused by the Deepwater Horizon explosion on April, 20th.

The U.S. Interior Department said oil companies must comply with new regulations and demonstrate they can adequately respond to blowouts.

Reuters reports: “The oil and gas industry will be operating under tighter rules, stronger oversight, and in a regulatory environment that will remain dynamic as we continue to build on the reforms we have already implemented,” Interior Secretary Ken Salazar said in a statement.

The government imposed the deepwater drilling freeze in late May after BP’s ruptured Macondo well began leaking millions of gallons of oil into the Gulf. The ban was supposed to last through November. The Obama administration is lifting it as Congressional Democrats prepare for mid-term elections in November, with voters worried about the economy and unemployment.

Michael Bromwich, head of Interior’s Bureau of Ocean Energy Management, said it would take time for companies to comply with the rules and for the department to review new permit applications.

Every rig must be inspected before drilling begins and company chief executives must certify each project has met all requirements.

“My sense is we will have permits approved by the end of the year,” Bromwich told reporters on a conference call.

Shallow-water drillers, which were not subject to the drilling ban, also have complained about lengthy delays in permitting since the BP spill.

Jack Gerard, who heads the American Petroleum Institute, a major oil lobbying group, urged the government to move quickly to restart drilling.

“Even though the moratorium is lifted, if the permitting process comes to a grinding halt we really haven’t accomplished much,” Gerard told Reuters.

The department said there were 18 idled rigs in deep water that must seek drilling permits under the new safety rules.

“Today’s decision is a good start, but it must be accompanied by an action plan to get the entire industry in the Gulf of Mexico back to work,” Senator Mary Landrieu, a Louisiana Democrat and moratorium critic, said in a statement.

She said she would block confirmation of the Obama administration’s nominee to head the Office of Management and Budget until she was certain drilling had resumed at an adequate pace.

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