The Louisiana congressional delegation led by Sen. Mary Landrieu (D-LA) has called on President Obama to put an end to the de facto moratorium in the deepwater Gulf of Mexico.
In a letter to the president on Feb. 19, the eight-member group wrote, “We would appreciate the opportunity to discuss with you as a delegation how this can most effectively be done to benefit all stakeholders. We…request to meet with Chief of Staff William Daley to further discuss this matter.”
The moratorium, which was imposed last May following the Macondo well blowout, officially ended in October (see NGI, Oct. 18, 2010). However, the oil and natural gas industry contends that a de facto moratorium continues because of the Interior Department’s sluggish pace in issuing new drilling permits. Sen. David Vitter (D-LA) has placed holds on two Obama administration nominees until the drilling permit impasse in the Gulf is resolved.
Earlier this month, Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, indicated that offshore production could move forward, once containment technologies were in place. A new containment system recently was launched by the Marine Well Containment Co., a non-profit, independent organization founded by ExxonMobil Corp., Chevron, ConocoPhillips and Royal Dutch Shell (see NGI, Feb. 21). BP plc this said it planned to join the other producers (see NGI, Feb. 7). The system, based in the GOM, operates in water depths of up to 8,000 feet and can process up to 60,000 b/d of liquids.
Interior Secretary Ken Salazar Friday traveled to Houston to review the containment systems.
“The de facto moratorium which replaced it [the original moratorium] has created a new climate of uncertainty. There is now a confusing and cumbersome permitting policy on drilling, with nothing being approved,” the Louisiana delegation said.
An analysis by the Obama administration indicated that the economic impact of the drilling ban led to nearly $2 billion in reduced industry spending and a loss of up to 12,000 jobs, according to the lawmakers. And studies commissioned by business and industry pointed to even greater losses.
“As we work to restore U.S. manufacturing jobs, offshore energy production can be a driver for national independence and innovation. Instead the current decision to limit OCS [Outer Continental Shelf] drilling has paralyzed an important domestic industry, cut thousands of jobs and stifled economic investment and growth at a time when job creation is paramount,” the group noted.
“As Congress prepares to enact major cuts in spending aimed at reducing our deficit, we should not deny royalties and other revenue from oil and gas development that could assist in paying down the debt.
“Wood Mackenzie…recently released a study showing that a one-year delay in the permitting process will likely result in a loss of nearly $10.8 billion in government revenues, further exacerbating our problem.”
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