petroleumworld

Reuters/Lisi Niesner

Greenpeace activists paint over a banner with the British Petroleum (BP) logo in a protest against the BP oil spill in the Gulf of Mexico at St. Stephen's square in Vienna July 7, 2010.

The US government issued a new moratorium on deepwater drilling Monday until November 30 to ensure oil companies implement safety measures following the Gulf of Mexico disaster.

"More than 80 days into the BP oil spill, a pause on deepwater drilling is essential and appropriate to protect communities, coasts and wildlife from the risks that deepwater drilling currently pose," Interior Secretary Ken Salazar said in a statement.

"I am basing my decision on evidence that grows every day of the industry's inability in the deepwater to contain a catastrophic blowout, respond to an oil spill and to operate safely."

The move comes days after an appeals court denied the government's emergency request to stay a federal judge's ruling to lift its previous six-month moratorium order.

The decision was immediately slammed by Louisiana Senator Mary Landrieu, who said it could cause her state to lose 120,000 jobs and spark a "second economic disaster that has the potential to become greater than the first."

The US Chamber of Commerce's Institute for 21st Century Energy provided a much lower figure, saying the move threatened 20,000 jobs in Louisiana alone, while Landrieu did not detail how she came up with her numbers.

She insisted the offshore drilling industry is safe, and noted that 42,000 other wells have been drilled in the Gulf of Mexico's US waters without serious incidents.

"Obviously, more effective regulations and greater transparency are a must, but this Deepwater Horizon incident is an exception and it should be treated as such," Landrieu told a presidential commission probing the BP spill.

"I urge this commission to take immediate and swift action to immediately lift the moratorium."

Salazar previously warned he would issue a new order to block deepwater drilling, regardless of how the court ruled, to back up the first moratorium, imposed after the deadly April 20 explosion on a BP-leased drilling rig sparked the worst environmental disaster in US history.

The new order is supported by "an extensive record" showing new deepwater drilling would threaten "serious, irreparable, or immediate harm or damage to the marine, coastal, and human environment," according to the Interior Department.

Bill Reilly, the Republican co-chair of the commission, said he understood why industry and local officials would rather replace the blanket freeze with a way to impose greater scrutiny and grant approval on a case-by-case basis.

"Before we can recommend lifting the moratorium one would have to have a conviction that the kinds of concerns it intended to address have been met," he added.

"It doesn't seem to me that we're in that position."

Yet oil companies with extensive operations in the Gulf have warned of an exodus if the drilling remains suspended.

"It is not possible for us to retain our assets idled," Diamond Offshore Drilling CEO Larry Davidson told the commission, saying two of the company's 10 rigs impacted by the freeze have already been redeployed to Egypt and West Africa, and a third would soon be leaving for Brazil.

Obama had acknowledged the moratorium would cause economic harm, but said such an order was necessary to give investigators adequate time to understand what caused the accident, and create new safety regulations.

"I remain open to modifying the new deepwater drilling suspensions based on new information," said Salazar, but he added the oil and gas drilling industry "must raise the bar on its practices and answer fundamental questions about deepwater safety, blowout prevention and containment and oil spill response."

Institute for 21st Century Energy president Karen Harbert said 41 business organizations in the Gulf region had joined the Chamber in urging an end to the "moratorium on jobs and growth."

Story by Alex Ogle from AFP
AFP 07/13/2010 00:14

Internet web links to http://www.petroleumworld.com are appreciatedPetroleumworld welcomes your feedback and comments,
share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions, please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7+/ 800x600 pixels

US imposes new freeze on deepwater drilling