The oil industry “must raise the bar on its practices and answer fundamental questions about deepwater safety, blowout prevention and containment, and oil spill response,” said Interior Secretary Salazar.Original photo courtesy Mike at Sea via FlickrWASHINGTON — The U.S. government on Monday issued a new moratorium on deepwater drilling until November 30 to ensure oil companies implement safety measures following the Gulf of Mexico disaster.
“More than 80 days into the BP oil spill, a pause on deepwater drilling is essential and appropriate to protect communities, coasts, and wildlife from the risks that deepwater drilling currently pose,” said Interior Secretary Ken Salazar in a statement.
“I am basing my decision on evidence that grows every day of the industry’s inability in the deepwater to contain a catastrophic blowout, respond to an oil spill, and to operate safely.”
The move comes days after an appeals court denied the government’s emergency request to stay a federal judge’s ruling that lifted its previous six-month moratorium order.
The decision was immediately slammed by Louisiana Sen. Mary Landrieu (D), who said it could lead to the loss of 120,000 jobs in her state and a “second economic disaster that has the potential to become greater than the first.”
Landrieu insisted the offshore drilling industry is safe, and noted that 42,000 other wells have been drilled in U.S. waters in the Gulf of Mexico without serious incidents.
“Obviously more effective regulations and greater transparency are a must, but this Deepwater Horizon incident is an exception and it should be treated as such,” Landrieu told a presidential commission probing the BP spill. “I urge this commission to take immediate and swift action to immediately lift the moratorium.”
Bill Reilly, the Republican co-chair of the commission, set up by President Obama to probe the catastrophic spill, said he could understand why the industry and local officials would rather replace the blanket freeze with a process to impose greater scrutiny and grant approval on a case-by-case basis.
“Before we can recommend lifting the moratorium, one would have to have a conviction that the kinds of concerns it intended to address have been met,” Reilly said. “It doesn’t seem to me that we’re in that position.”
Salazar had previously warned he would issue a new order to block deepwater drilling regardless of how the court ruled, as oil companies decided not to resume drilling due to the legal uncertainties.
The first moratorium was imposed after the deadly April 20 explosion on a BP-leased drilling rig sparked the worst environmental disaster in U.S. history.
The new order, said the Interior Department, is supported by “an extensive record of existing and new information indicating that allowing new deepwater drilling to commence would pose a threat of serious, irreparable, or immediate harm or damage to the marine, coastal, and human environment.”
Obama previously acknowledged the moratorium would cause economic harm, but said such an order was necessary to give investigators adequate time to understand what caused the accident and create new safety regulations.
Oil companies and Louisiana politicians have railed against the move, saying it would cause further economic devastation and that rigs and drilling plans should simply be inspected on a case-by-case basis.
The suspension order Monday is to last until November 30 “or until such earlier time that the Secretary determines that deepwater drilling operations can proceed safely,” said the department.
“I remain open to modifying the new deepwater drilling suspensions based on new information,” said Salazar, but he added the oil and gas drilling industry “must raise the bar on its practices and answer fundamental questions about deepwater safety, blowout prevention and containment, and oil spill response.”
Louisiana Gov. Bobby Jindal (R) last Thursday hailed the appeals court’s decision but expressed concern that uncertainty had created a “de facto moratorium” that could cost the state 20,000 jobs.
Lawyers representing the oil companies argued the government is overreaching and that the moratorium has already caused irreparable economic harm. Those oil companies with extensive operations in the Gulf have warned of an exodus if the drilling remains suspended.
Some 33 rigs already operating in the Gulf were impacted by the freeze, 10 of which are run by Diamond Offshore Drilling, and two of those rigs have already been redeployed to Egypt and West Africa, CEO Larry Davidson told the commission, adding that a third would soon be leaving for Brazil.
“It is not possible for us to retain our assets idled,” Davidson said, noting that many of the company’s shallow water rigs have also been idled because customers cannot get permits.
U.S. oil giant ExxonMobil made a similar argument. After the court’s decision last week, company spokeswoman Cynthia Bergman White said that if the moratorium continued, “we will need to redirect our human resources — the technical talent — to other parts of the world where we are allowed to work. We will also redirect rigs and equipment elsewhere. It is too expensive not to do so.”
The U.S. Chamber of Commerce’s Institute for 21st Century Energy slammed the Obama administration’s move, saying it threatened 20,000 jobs in Louisiana alone.
The group’s president, Karen Harbert, said 41 business organizations in the Gulf region had joined the Chamber in urging an end to the “moratorium on jobs and growth.”
“While a renewed focus on safety, spill prevention, and advanced technology should be aggressively pursued, keeping America’s energy resources under lock and key is the wrong approach for our economy and for a more secure energy future,” she said Monday after Salazar’s announcement.
