Interior Secretary Ken Salazar Monday issued a new moratorium on deepwater drilling in the Gulf of Mexico (GOM) that, unlike the initial moratorium, gives a date-certain for when it would end -- Nov. 30.
But rather than call it a moratorium, Interior is calling it a suspension. The suspension will last until Nov. 30 or until such earlier time that Salazar determines that deepwater drilling operations can proceed safely, the Interior Department said. Salazar also ordered the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) to gather and analyze information from the public, experts, stakeholders and the industry on safety and response issues, which could potentially provide the basis for resuming certain deepwater drilling activities.
"A moratorium by any other name is still a moratorium," said the National Ocean Industries Association (NOIA), which represents the offshore industry. "If it looks like a moratorium, acts like a moratorium and the effect is the same as a moratorium, it is a moratorium," said NOIA Chairman Burt Adams. Monday's announcement appears to provide some certainty of an end to the government action. Observers had speculated when the moratorium was first announced that it could run over the initial six months and last 18 months to a year.
While the first moratorium, which was issued in late May, prohibited drilling in deep waters (1,000 feet or deeper), it purported to allow drilling in shallow waters (500 feet or less). The new moratorium does not suspend drilling activities based on water depth, but rather on the basis of the drilling configurations and technologies. Salazar's decision allows certain low-risk operations to occur in the deepwater GOM in spite of the moratorium.
"I am basing my decision [on the new moratorium] 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 operate safely," Salazar said. He said there was an extensive record 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.
In a decision memo to BOEM Director Michael Bromwich, Salazar said the moratorium would provide time to implement recent safety reforms and for:
The new moratorium comes after the original moratorium was struck down three times in court -- once in the Fifth Circuit Court of Appeals last week and twice in the U.S. District Court in late June.
U.S. District Court Judge Martin Feldman said the Interior Department failed to justify its decision to impose a prolonged ban on deepwater drilling in the wake of the explosion on board the Deepwater Horizon rig, and essentially sought retribution against an entire industry for the actions of one company -- BP (see Daily GPI, June 23). He rejected a bid by the administration to stay his decision (see Daily GPI, June 25). The Fifth Circuit upheld Feldman's ruling last Thursday (see Daily GPI, July 8).
While supposedly exempted from the moratorium, shallow-water drillers in the Gulf say they are paying a price. "Despite assurances from the White House and the Interior Department, about one-third of the shallow-water fleet has been idled by the application of what can only be called a de facto moratorium. Unless Interior changes course, and matches their action with their rhetoric, another third of the fleet will be idled," said Jim Noe, senior vice president and general counsel of Hercules Offshore.
"I fully support the Obama administration's move to impose a new moratorium on drilling in deep waters [until Nov. 30]. The Deepwater Horizon crisis has confirmed the inherent catastrophic dangers of deepwater drilling," said Sen. Dianne Feinstein (D-CA).
"In my opinion, the administration should continue to ban new deepwater drilling until there is a thorough overhaul of federal safety and environmental drilling policies; the full reorganization of the newly christened [BOEM] is complete; and technology is readily available to handle a deepwater catastrophe," she said.
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