Wednesday, January 5, 2011

U.S. to Ease Requirements on Some Deepwater Projects

by Ayesha Rascoe, Reuters, Washington, Jan 3, 2011 Mon 8:11 PM EST

Credit: Reuters/Lee Celano. Description: Unused oil rigs sit in the Gulf of Mexico near Port Fourchon, Louisiana August 11, 2010.

The Obama administration on Monday eased new environmental barriers to some oil and gas deepwater projects, but companies will still have to meet stringent regulations before drilling resumes.

Oil companies and Republican lawmakers have complained that regulations imposed after the BP oil spill have brought Gulf of Mexico drilling to a standstill.

The [Interior] department's decision to waive some environmental requirements comes as Noble Corp announced that Marathon Oil Co canceled a four-year, $752 million contract for a deepwater rig in the Gulf due to lack of drilling permits.

The policy will impact 13 companies with projects that were already underway when the department imposed its ban on deepwater drilling. Companies will be able to forego additional environmental reviews depending on new calculations of the worst-case flow rate estimates for their wells.

While removing one potential obstacle for these companies, it does not automatically mean drilling will begin immediately.

Affected companies such as Chevron and Royal Dutch Shell, which were drilling wells when the department imposed its moratorium, must still meet new offshore drilling regulations before restarting their projects.

"We are taking into account the special circumstances of those companies whose operations were interrupted by the moratorium and ensuring that they are able to resume previously approved activities," said Michael Bromwich, head of [the Department of the] Interior's Bureau of Ocean Energy Management, [Regulation and Enforcement (BOEMRE)].

Since lifting its ban in October ... , the department has yet to approve any new deepwater exploration drilling permits.

Shell characterized the government's move as a good first step, but said more action is needed "to improve the timeliness and efficiency of the permitting process," according to a statement from the oil company.

Republicans, who will control the House of Representatives in the new Congress, vow to press the Obama administration on the slow permitting process. More

(For the Gulf of Mexico oil spill, see also my post, here -- D.R.)

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