A bipartisan group of senators led by Kay Bailey Hutchison (R-TX) and Mary Landrieu (D-LA) introduced a resolution last Wednesday calling on the Interior Department to streamline the reviewing process for shallow and deepwater drilling applications and provide better guidance to producers seeking new permits.

Hutchison and Landrieu were joined by Sens. Mark Begich (D-AK), Thad Cochran (R-MS), John Cornyn (R-TX), Lisa Murkowski (R-AK), Jeff Sessions (R-AL), Richard Shelby (R-AL) and Roger Wicker (R-MS) in introducing the Senate resolution urging timely review of drilling applications.

The Obama administration imposed a moratorium on overall drilling in the Gulf of Mexico last May following a deadly explosion and fire aboard the Deepwater Horizon mobile rig leased by BP plc (see NGI, April 26, 2010). While the bans have been lifted, Interior has not awarded any permits for drilling in the deepwater Gulf since then, and fewer than 35 permits to explore the shallow waters have been issued, the senators said.

Moreover, Interior’s new safety requirements have not been clearly outlined to shallow or deepwater operators, which has prevented applications from being approved, the senators said. As a result, at least 12 rigs (both shallow and deepwater) have left the Gulf, many of them departing for international work, sending American jobs overseas.

“It has been nearly 10 months since the Deepwater Horizon disaster and the Interior Department still has not streamlined the shallow-water permitting process,” Landrieu said.

“The ongoing delays in the offshore permitting process have cast a pall on offshore energy production and overall Gulf Coast economy. Nobody wants a repeat of the Deepwater Horizon blowout, but neither do we want to hamstring an industry that creates jobs,” Cochran said.

“The administration has dragged its feet long enough on shallow-water drilling. When companies start filing for bankruptcy protection — as Seahawk Drilling did recently — it’s time to end the de facto moratorium on shallow-water drilling and let people get back to work producing the energy America depends on,” Murkowski said (see related story).

In a related development the Government Accountability Office (GAO), the investigative arm of Congress, has added the Interior to its high-risk list due to concerns over its management of oil and natural gas resources.

The list first came out in 1990 and is updated biennially, and identifies government agencies that have “greater vulnerability to fraud, waste, abuse and mismanagement,” and need the attention of Congress and the executive branch, the GAO said .

The oversight committees — the Senate Homeland Security and Government Affairs Committee and House Oversight and Government Reform Committee — released the GAO’s 177-page report updating the high-risk list last Wednesday.

Interior “does not have reasonable assurance that it is collecting its share of billions of dollars of revenue from oil and gas produced on federal lands, and it continues to experience problems in hiring, training and retaining sufficient staff to provide oversight and management of oil and gas operations on federal lands and waters,” the GAO said.

“Further, Interior recently began restructuring its oil and gas program, which is inherently challenging, and there are many open questions about whether Interior has the capacity to undertake this reorganization while carrying out its range of responsibility,” the agency said.

In May 2010 Interior Secretary Ken Salazar signed a secretarial order that divided the three conflicting missions of the department’s Minerals Management Service (MMS) — enforcement, energy development and revenue collection — into separate entities with independent missions. The embattled MMS was dissolved and renamed Bureau of Ocean Management, Regulation and Enforcement (BOEM), with Michael Bromwich as its director (see NGI, May 24, 2010). In October 2010 the revenue collection arm of the former MMS became the Office of Natural Resources Revenue.

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