Oil Spill Crude Disaster

Sep 30, 2010 6:13 PM

Obama Administration not ready to lift moratorium

WASHINGTON (AP) - The Obama administration on Thursday imposed
new rules to make offshore drilling safer, but said it was not yet
ready to lift a temporary ban on deepwater drilling.
Interior Secretary Ken Salazar called offshore drilling
inherently risky and said, "We will only lift the moratorium when
I, as secretary of Interior, am comfortable that we have
significantly reduced those risks."
White House press secretary Robert Gibbs called the new
regulations "a big step forward" and said they moved the
administration closer to lifting the deepwater drilling ban.
"The president does not oppose the offshore exploration for
oil," Gibbs told reporters. "We need to do this in a way that is
technologically safe, technologically proven," to avoid
catastrophic blowouts such as the massive BP spill in the Gulf of
Mexico.
The new rules, which take effect immediately, 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
spill.
The April 20 spill, which was triggered by an explosion that
killed 11 people, dumped an estimated 200 million gallons of oil in
the Gulf. BP killed the well two weeks ago and expects to
eventually pay at least $32 billion to handle the cleanup and
damage claims.
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.
Companies also will be required to develop comprehensive plans
to manage risks and improve workplace safety.
"We are raising the bar for safety, oversight and environmental
protection," he said Thursday in a speech at a Washington think
tank. "The oil and gas industry needs to expect a dynamic
regulatory environment as we bring offshore programs up to the gold
standard we need to have."
Salazar and other administration officials had said the new
rules must be in place before the Interior Department lifts a ban
on deepwater drilling. The ban is set to expire Nov. 30, but
officials have said they hope to end it early.
The rules announced Thursday are not the final step, Salazar
said, noting that the Interior Department is likely to propose
requiring that blowout preventers have a second set of blind shear
rams - the parts that can shear off and shut down wells in the
event of a catastrophic spill.
Lee Hunt, chief executive of the International Association of
Drilling Contractors, said the new rules could make offshore
drilling safer, but would add layers to a regulatory process that's
all but shut down drilling in the Gulf. The government has approved
just a handful of shallow-water drilling permits during the past
few months, and oil companies are growing frustrated with the wait.
"All of this can be done," Hunt said of the new rules. "The
question is if we're now getting to a choke point," in which the
permitting process grinds to a complete halt.
A spokesman for the American Petroleum Institute said the oil
industry group will review the rules. The API has called for a
clear, practical and well-defined review process that will protect
the environment and allow drilling to resume.
"We cannot have an approval process that creates unpredictable
delays that could place at risk the flow of domestic energy in our
country," said Erik Milito, a lobbyist for the group. Extended
delays in permit approvals are likely to discourage investment in
new projects - hampering job creation and restricting energy
production, he said.
Richard Charter, senior policy adviser for Defenders of
Wildlife, cheered the new rules. It's hard to tell if they will
make the Gulf safer, he said, but at least "it shows they're not
sweeping this under the rug. The era of 'drill baby drill' is
over."
Government regulators have long been criticized for a cozy
relationship with the oil and gas industry - a situation Salazar
and other Obama administration officials have vowed to fix.
Even after the temporary ban on exploratory drilling is lifted,
drilling is unlikely to resume quickly.
"You're not going to see drilling going on the next day, or
even the next week," Michael Bromwich, director of the agency that
oversees offshore drilling, said this week. "It's going to take
some time."
---
Associated Press writers Chris Kahn in New York and Erica Werner
in Washington contributed to this story.

(Copyright 2010 by The Associated Press. All Rights Reserved.)

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