New deepwater drilling permits slightly off pace from before BP oil spill

02 28, 2012 by The Times-Picayune

New government data show that in the year since deepwater drilling officially resumed in the Gulf of Mexico following the BP oil spill, there were slightly fewer new deep well permits issued than in the same yearlong period before the spill. The Obama administration angered Gulf Coast leaders and the oil industry by imposing a moratorium on deepwater drilling after the Deepwater Horizon rig exploded April 20, 2010, killing 11 men and soiling the Gulf of Mexico and its shores for months. Opponents said it was an overreaction to shut down the industry and then "slow-walk" permitting.

Feb. 28, 2011, was the date that the Interior Department approved the first permit for an oil company to drill a new well in more than 500 feet of water after it had implemented new safety rules.

In the year since then, there have been 61 permits to drill new wells in more than 500 feet of water issued by the Bureau of Ocean Energy Management, Regulation and Enforcement and its successor agency, the Bureau of Safety and Environmental Enforcement.

In the same one-year period from Feb. 28, 2009, to Feb. 27, 2010, the government issued 67 such permits.

New wells - as opposed to any number of drilling activities involving existing wells that also require permits - are a critical measure of drilling activity because they represent the largest investment by oil exploration companies and offer the greatest potential for finding new sources of crude.

As recently as last week, Jack Gerard of the American Petroleum Institute complained that the Obama administration was still artificially slowing the permitting process. The president, meanwhile, has been responding to attacks on his energy policy amid skyrocketing gas prices and firing back at the slogan "Drill, baby, drill."

While the numbers indicate the pace of permitting in deepwater is nearly back to what it was in the same period before the spill, industry experts have argued that permitting should have expanded by now, not remained flat, given the continued investment from oil companies. On the other hand, the government has stated that it was forced to hold up many permits because those applicants had not fully complied with new safety rules that were imposed as lessons were learned from the BP disaster.