Tuesday, March 22, 2011

Obama Admin Approves 1st Deep-water Gulf Drilling Plan

The Obama administration approved on Monday, through the Interior Department's Bureau of Ocean Energy, Management, Regulation and Enforcement (BOEMRE), the first new deep-water exploration plan in the Gulf of Mexico since the Deepwater Horizon disaster last April.  The Royal Dutch Shell PLC plan still needs a separate permit to start drilling. Shell plans to drill wells in about 2,950 feet of water 130 miles off the Louisiana coast.

The Interior Department approved Shell's environmental assessment of the specific site, clearing an important regulatory hurdle. In the past, Interior had granted drilling permits in the Gulf without requiring environmental studies for the specific projects. The department discontinued issuing these "categorical exclusions" in August 2010 as part of a broader overhaul of offshore-drilling regulation in the aftermath of the worst offshore oil spill in U.S. history. Currently, 13 similar exploration plans are pending before Interior's Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE).

After the explosion at the BP PLC-leased Deepwater Horizon, Interior imposed a moratorium on deep-water drilling in the Gulf and required operators to meet more stringent safety standards. It lifted the moratorium in October, 2010, but the department has faced criticism for limiting deep-water permit approvals to three sites where operators had already been drilling before the moratorium. By contrast, the Shell plan approved Monday would tap new wells. (WSJ, 3/22/2011)

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