Post Carbon: Obama administration reimposes offshore oil drilling ban - Washington Post

Interior Secretary Ken Salazar announced Wednesday afternoon that the Obama administration will not allow offshore oil drilling in the eastern Gulf of Mexico or off the Atlantic and Pacific coasts as part of the next five-year drilling plan, reversing two key policy changes President Obama announced in late March.

"We are adjusting our strategy in areas where there are no active leases," Salazar told reporters in a phone call, adding that the administration has decided "not expand to new areas at this time" and instead "focus and expand our critical resources on areas that are currently active" when it comes to oil and gas drilling.

In March--less than a month before the BP oil spill--Obama and Salazar said they would open up the eastern Gulf and parts of the Atlantic, including off the coast of Virginia, to offshore oil and gas exploration. On both of those new areas, the administration said it would start scoping to see if oil and gas drilling would be suitable. The eastern Gulf remains closed to drilling under a congressional moratorium, but the White House indicated it would press to lift the moratorium if necessary.

Wednesday's announcement is sure to please environmentalists while angering oil and gas companies as well as some lawmakers from both parties who have pressed for continued offshore energy exploration in the wake of massive Gulf of Mexico spill.

Salazar said while the administration will still allow offshore drilling in both the central and western Gulf of Mexico and in the Arctic, it will delay lease sales planned for March and August in the gulf to conduct additional environmental reviews, and will prepare a new environmental assessment of Shell's proposal to drill in Alaska's Beaufort Sea next year. Shell officials warned that the additional review could jeopardize its ability to explore for oil and gas in the Arctic in 2011.

Marilyn Heiman, director of offshore energy reform for the Pew Environment Group, welcomed the announcement but questioned why the administration is still leaving open the possibility of leasing areas in the Chukchi and Beaufort Seas between 2012 and 2017.

"Much more needs to be done to ensure there is adequate spill response capability that is proven to work in Arctic conditions before drilling can be considered," she said.

Sen. Bill Nelson (D-Fla.), who has consistently pushed to restrict drilling in the eastern gulf, also welcomed the news. Salazar called the senator Wednesday morning, according to Nelson spokesman Dan McLaughlin, but the two men did not speak yet because Nelson is chairing a hearing.

"Drilling off Florida's Gulf coast is banned at least until 2022, under a 2006 law passed by Senator Nelson," McLaughlin said. "The senator is pleased the White House has decided rightly to keep the area off-limits. He hopes Florida's next governor and the Legislature similarly will commit to protecting the state's tourism economy and unique environment."

Activists such as Margie Alt, executive director of Environment America, also praised the administration's plan, saying, "Today, anyone who loves our beaches, who fishes in the ocean or who depends on a healthy coastal economy can thank the Obama administration for protecting the Atlantic and Pacific coasts and the west coast of Florida from oil drilling. The BP disaster earlier this year was a tragic reminder that drilling is a dirty and dangerous business. The only way to truly keep our coasts and ocean ecosystems safe is to keep them rig free."

But the move could spark a backlash from business interests as well from both many congressional Republicans and conservative Democrats such as Sen. Manry Landrieu, who argue that curbing offshore energy exploration could exacerbate the nation's economic woes.

Karen Harbert, president and CEO of the U.S. Chamber of Commerce's Institute for 21st Century Energy, said in a statement, "The Administration is sending a message to America's oil and gas industry: take your capital, technology, and jobs somewhere else."

Rep. Doc Hastings (Wash.), the top Republican on the House Resources Committee, issued a statement Wednesday afternoon accusing the administration of "taking the wrong approach in responding to the BP spill and creating energy and energy jobs in this country. The answer isn't to give up and say, 'America can't figure it out, we'll rely on other countries to produce our energy.' The answer is to find out what went wrong and make effective, timely reforms to ensure that U.S. offshore drilling is the safest in the world."

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Drilling freeze ended _ but when will work resume? - Philadelphia Inquirer

WASHINGTON - The U.S. is back in the deep water oil-drilling business. The question now is when work will resume.

The Obama administration, under heavy pressure from the oil industry and Gulf states and with elections nearing, lifted the moratorium that it imposed last April in the wake of the disastrous BP oil spill.

The ban had been scheduled to expire Nov. 30, but Interior Secretary Ken Salazar said Tuesday he was moving up the date because new rules imposed after the spill had reduced the risk of another catastrophic blowout. Industry leaders warily waited for details of those rules, saying the moratorium wouldn't be truly lifted until then.

"The policy position that we are articulating today is that we are open for business," Salazar declared.

The reality is more complicated. While the temporary ban on exploratory oil and gas drilling is lifted immediately, drilling is unlikely to resume for several weeks at least as oil and gas companies struggle to meet a host of new safety regulations. For example, the CEO of a company responsible for a well would have to certify it had complied with all regulations. That could make the person at the top liable for any future accidents.

"Operators who play by the rules and clear the higher bar can be allowed to resume," Salazar said.

The April 20 BP spill, which was triggered by an explosion that killed 11 people, dumped an estimated 200 million gallons of oil in the Gulf, harming wildlife and severely cramping coastal businesses. BP sealed the well last month and expects to eventually pay at least $32 billion to handle the cleanup and damage claims.

News that the moratorium , much-despised along the Gulf Coast , was being lifted came as a federal judge weighed a drilling company's bid to overturn it.

The action also came just weeks before midterm elections in which Democrats face widespread criticism for overextending government actions on the economy, including the health care overhaul, the economic stimulus plan and the drilling moratorium. A federal report said the moratorium probably caused a temporary loss of 8,000 to 12,000 jobs in the Gulf region.

White House spokesman Robert Gibbs denied that pressure from the oil industry or anyone else played a role in the decision to lift the moratorium ahead of schedule. It was, he said, "part of a very deliberative policy process ... that got done more quickly than the original timeline."

Salazar said he knew that some drilling supporters would say the new rules are too onerous, while critics would say risks remain in deep water drilling. The truth is, there will always be such risks, Salazar said, but "as we transition to a clean energy economy, we will still need oil and gas from the Gulf of Mexico to power our homes, our cars, our industry."

Rep. Charlie Melancon, D-La., called the end of the drilling ban great news for Louisiana's economy and workers, while Sen. David Vitter, R-La., contended there would be a "continuing de facto moratorium" on drilling that could extend for months or years. Melancon is challenging Vitter for his Senate seat next month.

Louisiana Sen. Mary Landrieu, a Democrat, applauded the decision to lift the ban but said she would not release her hold on Jacob Lew, President Barack Obama's choice to head the Office of Management and Budget. Landrieu has blocked a Senate vote on Lew, in part, to protest the moratorium.

"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," Landrieu said, calling on the administration to accelerate permit approvals for drilling in shallow and deep water and provide greater certainty about regulations industry must meet.

The White House expressed disappointment. Officials continue to believe her actions are "outrageous" and "unwarranted," Gibbs said.

Salazar emphasized that companies seeking to drill exploratory wells will have to prove they have the appropriate steps in place to contain a worst-case accident.

The new rules include many recommendations made in a report Salazar released in May, including requirements that rigs certify that they have working blowout preventers and standards for cementing wells. The cement process and blowout preventer both failed to work as expected in the BP accident.

Under the new rules, a professional engineer must independently inspect and certify each stage of the drilling process. Blowout preventers , the emergency cutoff equipment designed to contain a major spill , must be independently certified and capable of severing the drill pipe under severe pressure.

Todd Hornbeck, CEO of Covington, La.-based Hornbeck Offshore Services, said lifting the moratorium would leave the industry in a "de facto moratorium stage" until the government fully explains how new drilling permits will be issued.

"We're still in the dark," said Hornbeck, who heads up one of the companies that sued to block Interior's initial moratorium. His company provides vessels and other services for the offshore industry.

Louisiana Gov. Bobby Jindal, a Republican and fierce opponent of the drilling ban, called the announcement good news, but added: "The devil is always in the details."

He said he will watch closely to see if new drilling permits are issued promptly.

Industry groups expressed similar skepticism. Both the American Petroleum Institute and the National Ocean Industries Association said they were concerned that a "de facto moratorium" would replace the one the administration lifted Tuesday.

Dan Favre, campaign organizer for the Gulf Restoration Network, a Louisiana-based environmental group, said the decision to lift the moratorium put the region at risk.

"The Gulf and our communities have a long road to recovery from the BP disaster," he said. Local fishermen are still out of work, effects on wildlife have not been fully assessed and long-term work is needed to ensure ecological and economic recovery, he added. "We certainly can't afford another oil catastrophe."

Ensco Offshore, which owns and operates offshore drilling rigs, asked a federal judge last month to overturn the moratorium. U.S. District Judge Martin Feldman set a Tuesday deadline for legal briefs in the case, but has not said when he would rule.

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Associated Press writers Dina Cappiello, Julie Pace and Darlene Superville in Washington, and Michael Kunzelman and Kevin McGill in New Orleans contributed to this story.

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