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  • Interior Secretary Salazar cracks under pressure and begins issuing Gulf of Mexico drilling permits 0 comments
    Mar 1, 2011 6:13 PM | about stocks: XOM, CVX, COP, NBL, ATPAQ, RIG, APC, BP, BHI, RES, SLB, HAL, WFT, NOV, CAM, CRR, NE, STO, FOR, GEOI, NOG, WLL, CLR, EOG, DVN, MRO, HES, OXY, PBR

     

    By Amanda Carey - The Daily Caller
    Bio | Archive | Email Amanda Carey

     

    Updated: 3:07 PM 03/01/2011

    Ken Salazar can no longer avoid issuing deep-water drilling permits in the Gulf of Mexico. Though the secretary of the interior recently said he would not bow to political pressure on lifting the de facto drilling moratorium in the gulf, rumors that he would crack under that pressure were confirmed Monday evening when the first deep-water permit since the BP oil spill was issued.

    Prior to the announcement that the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) had approved a permit for Noble Energy’s oil well off the coast of Louisiana, rumors were circulating on Capitol Hill that the de facto moratorium would be lifted prior to Salazar’s appearance on the Hill later this week.

    Frank Maisano, a consultant at Bracewell & Giuliani, told The Daily Caller that a decision by Salazar to issue a permit this week was a “lock.”

    “[They wouldn’t] go up to the Hill without having a bird in hand,” said Maisano.

    Salazar’s scheduled Wednesday appearance before the Senate Energy and Natural Resources Committee promises to contain plenty of finger-pointing by congressmen and witnesses on the issue of deep-water drilling.

    “There’s a range of Interior issues that committee members will want to ask Salazar about,” Robert Dillion, a spokesman for the Senate committee, told The Daily Caller. “Offshore drilling will certainly be on top of the list.”

    Following the oil spill last April, the federal government banned deep-water drilling. While the ban was officially lifted in October, until Monday’s announcement, Salazar had refused to reissue permits to oil companies in the gulf, despite a bipartisan effort from lawmakers to do so.

    According to some observers, Salazar relented because a number of factors and political elements forced his hand on the issue.

    For starters, Salazar was losing his battle in the court system at every turn. On Feb. 2, Judge Martin Feldman of the U.S. District Court for the Eastern District of Louisiana, rebuked the administration for “determined disregard” of his previous June 2010 order to lift the moratorium.

    In a separate ruling two weeks later, Feldman gave President Obama and Secretary Salazar 30 days to act on five pending permit applications. “[T]he government is under a duty to act by either granting or denying a permit application within a reasonable time,” said Feldman. “Not acting at all is not a lawful option.”

    TheDC previously reported that one company,Texas-based Seahawk Drilling, recently filed for Chapter 11 bankruptcy, blaming the federal government’s failure to issue permits.

    Perhaps the biggest factor pushing Salazar to act was a new billion-dollar well containment system that was recently completed by the Marine Well Containment Co. – a non-profit organization formed by oil companies including ExxonMobil, Shell, Chevron and ConocoPhillips.

    When the completion was announced, many, including Karen Harbert, president of the U.S. Chamber’s Institute for 21st Century Energy, argued the oil industry had done its part to alleviate concerns over the environmental impact of deep-water drilling.

    “Industry has stepped up to the plate, and now government should do the same and end the de facto moratorium to get the gulf back to work for all Americans,” said Harbert in a statement.

    The containment system will provide rapid containment response capabilities should another spill occur, and can operate in 8,000-feet deep water and process up to 60,000 barrels of oil a day. The BP spill spewed about 50,000 gallons a day.

    With such a system in place, industry insiders said Salazar would be hard-pressed to continue stalling on deep-water permits.

    Dan Kish of the Institute for Energy Research, who spent more than two decades working on energy-related issues on the Hill, TheDC Salazar had just run out of excuses.

    “Politically, Ken Salazar had to begin to relieve some of the pressure that gas prices were exerting on the administration,” said Kish. “He was running out of excuses and with Congress no longer rubber-stamping or ignoring his anti-energy policies, he had to issue at least one permit to placate the Hill.”

    Kish pointed out that with the completion of the well containment system, Salazar’s safety concerns had been met.

    A spokesperson for the Department of Interior has not yet responded to email requests from TheDC to comment.

    Stocks: XOM, CVX, COP, NBL, ATPAQ, RIG, APC, BP, BHI, RES, SLB, HAL, WFT, NOV, CAM, CRR, NE, STO, FOR, GEOI, NOG, WLL, CLR, EOG, DVN, MRO, HES, OXY, PBR
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