Deep-water drilling moratorium lifted: why neither side is happy
To environmentalists, the lifting of the deep-water drilling moratorium Tuesday comes too soon. To the industry, it is seen as the beginning of a new era of uncertainty.
Tugs move the Noble Frontier Driller into port at Signal East Shipyard in Pascagoula, Miss., on Aug. 7. The Nobel Frontier was one of dozens of deep-water rigs forced into port because of the Gulf of Mexico drilling moratorium. The Obama administration lifted the moratorium Tuesday.
Rusty Costanza/The Times Picayune/AP/file
The Obama administration lifted its moratorium on deep-water drilling in the Gulf of Mexico Tuesday, replacing it with what Interior Secretary Ken Salazar is calling a 鈥済old standard鈥� of safety standards for operators looking to drill in water depths greater than 500 feet.
Following the announcement, environmental groups said that it was "premature" to lift the moratorium, while oil-industry operators worried that federal regulators are not finished creating new drilling standards.
Among the new safety measures:
鈥� Operators must have their blowout preventer inspected and its design reviewed by an independent third party.
鈥� They must present a report showing how they would prevent or reduce a blowout at the wellhead.
鈥� They must get all their casing designs and cementing procedures certified by a professional engineer.
The Bureau of Ocean Energy Management, which issues new permits for deep-water drilling in the Gulf, is 鈥渨orking to develop additional rules and guidelines鈥� past what is being established this week, said director Michael Bromwich.
In the meantime, he added, 鈥淲e will not approve permits or make decisions before the appropriate safeguards are in place."
The first permits under the new regulations will likely be issued 鈥渂y the end of the year,鈥� Mr. Bromwich said, adding: 鈥淗ow [many permits] by the end of the year, I can鈥檛 say.鈥�
That uncertainty is what worries industry experts, says Joseph Mason, an economist at Louisiana State University in Baton Rouge, La.
Increased safety regulations will not catch the oil and gas industry by surprise. Since the April 20 explosion of the Deepwater Horizon oil rig, most operators have prepared for new measures they expected would result from the review period, which was expected to last until Nov. 30.
Nor are the costs associated with getting equipment compliant or creating new emergency procedures expected to be prohibitive. Rather, industry operators worry that they will not be able to establish budgets for projects when they don鈥檛 know what regulation may come in future months.
鈥淲e鈥檙e not out of the woods yet,鈥� says Mr. Mason. The sluggish economy and 鈥渦ncertain policy decisions鈥� are both factors that make it difficult for rig operators to plan for the future at a particular well site, he says.
鈥淎nd when they can鈥檛 plan around it, they move,鈥� he adds, suggesting that operators could look abroad.
For their part, many environmentalists echo the statement released by Peter Lehner, executive director of the Natural Resources Defense Council. He calls the new rules 鈥渟trong鈥� but adds that 鈥渢hey may not be enough鈥� to ensure that 鈥渇uture drilling is done more responsibly.鈥�
His organization is calling for the moratorium to remain in place until more investigations determine the causes of the explosion, which killed 11 workers and released 4.4 million barrels (185 million gallons) of oil into Gulf waters.
To critics who say the moratorium is being lifted too soon, Secretary Salazar says, 鈥淭he truth is, there will always be risks associated with deep-water drilling鈥� but that the renewed regulation means 鈥渨e will have the drilling of oil and gas in the Gulf of Mexico safer than it ever has been.鈥�