Interior Secretary Ken Salazar told two Senate panels last week that he was planning to issue a new order that may narrow the scope of the sweeping moratorium on deepwater drilling in the Gulf of Mexico (GOM), but he did not indicate precisely when.

“We will in the weeks and months ahead take a look at how it is that the moratorium in place might be refined,” Salazar said during a hearing of the Senate Appropriations Committee’s Subcommittee on Interior, Environment and Related Agencies last Wednesday. The administration imposed the moratorium on deepwater drilling a month after the explosion aboard the BP plc-leased Deepwater Horizon rig, which sank off the coast of Louisiana (see NGI, May 31).

“It might be that there are demarcations that can be made based on reservoirs where we actually do know the pressures and the risks associated [with them] versus those reservoirs which are exploratory in nature [and] where you don’t know as a company what it is that you are drilling in,” he said.

“So the [new] moratorium order that we will issue will include as a criteria under which it is appropriate to take a look at the lifting of the moratorium. We will also work with the president’s Deepwater Horizon commission to get their views on when they believe…it’s appropriate for us to lift the [pause] button.”

The Interior Department will “make whatever adjustments are appropriate” to the deepwater moratorium, but only after the GOM well, which has been leaking oil for more than two months, is killed; evidence on the failure of the blowout preventer has been gathered; and Michael Bromwich, head of the new Bureau of Ocean Energy Management, Regulation and Enforcement (BOE), formerly known as Minerals Management Service (MMS), has had a chance to familiarize himself with the agency, Salazar said. Bromwich was sworn in as director of BOE last Monday.

Salazar’s comments came one day after a federal judge in New Orleans granted a motion for a preliminary injunction barring the federal government from enforcing its six-month moratorium on deepwater oil and natural gas drilling in the GOM (see related story).

At a separate hearing of the Senate Energy and Natural Resources Committee, Sen. Mary Landrieu (D-LA) recommended that the 33 deepwater wells affected by the moratorium be allowed to immediately resume “top hole section” drilling. “This would allow them to drill through non-hydrocarbon zones, thus foregoing the possibility of loss-of-well control incidents or oil spills. Drilling would stop within a reasonable distance of the targeted hydrocarbon zone, to be reviewed for continuation as further regulations are developed,” she wrote in a recent letter to President Obama.

The administration “has laid down a blanket, inappropriate…six-month moratorium with no end in sight,” Landrieu said. She urged Salazar to consider either shortening the duration of the moratorium or narrowing the scope of it.

“We’re looking at everything…I [originally] drew the demarcation at 500 feet because the shallow water drillers and others gave us the information that essentially gave us a sense of comfort,” Salazar told Landrieu.

“As we move forward looking at the moratorium across the Gulf Coast, we’re going to look at a number of different factors. And we’ll have some additional information to you [Landrieu] in the days ahead,” he said.

Most of the production “continues in the Gulf of Mexico,” Salazar noted. “There has been very little effect from the [Deepwater Horizon] blowout on the production of both oil and natural gas in the Gulf of Mexico.”

Landrieu estimated that approximately 4,000 wells are still producing in the GOM. “These have not been shut down.” While only 33 rigs are affected by the deepwater moratorium, she noted that each of those rigs has 1,400 workers onshore and offshore, or close to 46,200 in total.

Sen. Robert Bennett (R-UT) said that while he understood the administration’s decision to impose a moratorium, he wasn’t sure a blanket moratorium would provide a higher degree of safety than a targeted moratorium.

Sen. John Barrasso (R-WY) criticized Interior for saying that the moratorium was peer-reviewed and approved by experts who the department consulted during its safety review following the explosion of the Deepwater Horizon. He further charged that the presidential commission reviewing the rig accident was “stacked with people” who oppose offshore exploration.

Salazar made clear that the decision on the moratorium was out of the hands of the experts. Rather it was his and the president’s alone. And he said he was “confident this commission will do the job” and get to the “root” causes of the disaster.

Bromwich, who has a reputation for fixing broken and corrupt organizations, appeared with Salazar before the Senate panels. He said he plans to make sure agency employees and companies that do business with BOE walk a straight line. He said he is creating an internal investigations and review unit, which will not only probe allegations of misconduct within the agency, but “also [will] pursue with aggressiveness and diligence allegations that the companies who are under the regulatory supervision of my agency are not doing what they’re supposed to do, have violated the terms of their leases and may have made false statements or engaged in other misconduct in order to acquire those leases.”

Bromwich said he was “going to try to stand that [unit] up absolutely as soon as possible.” He noted that the unit would be modeled after a similar one he set up in the Department of Justice’s Office of Inspector General, which, among other things, investigated the Federal Bureau of Investigation laboratories.

The MMS “is no more,” Salazar told the subcommittee. Under the umbrella of BOE, the new agency will consist of three distinct units: the Bureau of Energy Management, which will handle leases and be involved in the drafting of the five-year leasing plan; Bureau of Safety and Environmental Enforcement, which will handle the inspections of rigs and platforms and will issue penalties for violations; and a third office to be created will collect revenues from oil and gas production on the federal Outer Continental Shelf (see NGI, May 24).

Salazar said 380 existing employees could be moved into the Bureau of Safety and Environmental Enforcement, but he estimated that at least 220 more would be needed to properly inspect GOM facilities and enforce violations.

Currently there are only 60 inspectors to cover 3,800 platforms in the GOM, of which 1,000 are manned. “That will have to be significantly expanded.” Salazar said he plans to submit an amended budget request so additional inspectors can be hired.

©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.