A bipartisan group of senators led by Kay Bailey Hutchison (R-TX) and Mary Landrieu (D-LA) has called on the Interior Department to expedite consideration of shallow-watering drilling applications and to provide adequate guidance to those companies seeking new permits.
Hutchison and Landrieu were joined by Sens. Roger Wicker (R-MS), Thad Cochran (R-MS), David Vitter (R-LA), John Cornyn (R-TX), Jeff Sessions (R-AL), Lisa Murkowski (R-AK), Mark Begich (D-AK) and Richard Shelby (R-AL) in introducing a Senate resolution urging swift review of applications. The lawmakers also sent Interior Secretary Ken Salazar a letter asking that guidance be given to the shallow-water industry as to how new requirements can be satisfied so the agency can resume and expedite approval of permits.
Even though the Obama administration says the current moratorium in the Gulf of Mexico does not extend to shallow-water drilling (water depths of 500 feet or less), only one new permit -- to Apache Corp. -- for drilling in shallow water has been approved in the past 10 weeks, according to the senators (see Daily GPI, July 20).
That's because Interior's new safety and environmental requirements have not been clearly outlined to shallow-water operators, they said. As a result, more than 35% of available shallow-water drilling rigs in the Gulf are idle and awaiting application approval. If shallow-water permits continued to be held up, the senators estimated that nearly 75% of the shallow-water fleet will be without work by the end of the summer.
In June Interior issued Notice to Lessees (NTL) 05 and 06 imposing new safety and environment requirements that had to be satisfied in order for lessees to receive new shallow-water drilling permits (see Daily GPI, June 9). Interior "has provided some assistance to applicants to how to satisfy NTL 05; however, [Interior] has not provided adequate guidance and information for shallow-water operators to comply with NTL 06, resulting in only one shallow-water permit being issue," the senators wrote in their letter to Salazar Thursday.
"Shallow-water operators must abide by all safety and environment regulations, but without clear guidance on how to meet those standards, they are being forced to shut down operations or are facing application delays. These bureaucratic delays are becoming a de facto moratorium on shallow-water drilling," said Hutchison.
"Although shallow water was excluded in Secretary Salazar's drilling suspension, the department bureaucrats clearly are dragging their feet on processing safe shallow-water leases," said Wicker.
"Shallow-water rigs have operated without a major incident for over 50 years," Cornyn said.
In other action, Murkowski, Landrieu and 22 other senators Thursday sent a letter to their Senate colleagues urging them to support revenue sharing for energy production on the Outer Continental Shelf if it comes up in legislation. "This issue may arise in the context of the Senate's response to the Deepwater Horizon oil spill as well as debates on other measures including climate and energy legislation," they wrote.
The 24 senators said they hold "varying views on offshore energy production in the federal waters seaward of our states," but "we are united...in our position that any such production in federal waters must include a program in which affected coastal states and coastal political subdivisions are entitled to a share of the federal revenues resulting from such production."
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