First deep-water drill permits since BP spill expected soon Deep drills set for Gulf

Regulator says the first permits since BP oil spill are about to be issued

Get the rigs warmed up. The deep-water drilling permits are on the way.

At least that's what the nation's top offshore energy regulator said in a visit Friday to Houston.

The Bureau of Ocean Energy Management, Regulation and Enforcement has issued no new deep-water drilling permits since last April's Deepwater Horizon accident that killed 11 and spilled millions of gallons of oil into the Gulf of Mexico.

"I'm on the record as saying that I expect deep-water permits to begin to be granted before the end of the second quarter," said Michael Bromwich, director of the bureau, in a meeting with the Houston Chronicle editorial board.

"But I now think we're going to see them, I hope, in the next several weeks."

Five permits for new wells are pending, he said, but they are held up primarily by requirements that the industry finish building systems capable of responding to a subsea blowout like last year's.

An industry consortium, formed by oil majors including Exxon Mobil, Shell, ConocoPhillips and Chevron, is expected to conduct testing this month on a capping stack that could handle a blowout like the one at BP's Macondo well that triggered last year's disaster, Bromwich said.

A second well containment system being developed by Helix Corp. is expected to be ready by the end of March.

A spokeswoman for the consortium said construction of an interim containment system is complete and that federal officials are scheduled to observe testing of the system next week.

Shallow drilling resumed

Permitting for drilling in shallow water, typically under 500 feet, resumed last year, albeit at a slower pace than before the spill amid new safety and environmental rules.

Thirty-one shallow-water permits have been granted since June, including one Friday morning, Bromwich said. Nine shallow-water permit applications are pending, and at no time since the Macondo accident have more than 15 permits been in line awaiting review, he said.

"Is that the pace industry would like? No. Is it at the highest level we saw before the accident? No," Bromwich said. But the pace has been steady, and the industry has not been applying for many permits, he said.

The ocean energy bureau shifted staff to speed up the permit review process last year, but soon found it wasn't necessary.

"We don't have enough permits to fully occupy the people that we transferred," he said. "We expected the flow to pick up, but it really hasn't."

Industry has complained about permitting delays, and Gary Luquette, head of Chevron's North American upstream business, took issue with Bromwich's assertion that no big backlog has developed, which he also made in a speech to a Rice University forum on offshore drilling.

"I think he's being a little coy on that issue," Luquette said during a panel discussion after Bromwich's speech.

Luquette said that oil companies have not filed new permit applications because of "vagueness" and "arbitrariness" of new offshore safety and environmental rules.

There is, however, a backlog of drilling work to be done, he said.

Bromwich said his agency has no plans to make additional emergency rules as it did in the aftermath of the Macondo spill. Rather, any changes will now go through the typical rulemaking process that takes up to two years, he said.

New rules coming

He said advance notice of rule-making regarding blowout preventers will be published "any day now." Investigators are still working to determine why the blowout preventer on the Macondo well failed to contain it.

Also on Friday Bromwich challenged what he said are a number of misconceptions about how permitting works.

The permits are submitted and approved in the bureau's regional offices along the Gulf Coast, Bromwich said, where some 500 of the agency's 1,200 workers are located. He and others in the bureau's headquarters aren't personally involved in the process.

"The reason that's relevant is it's not some bureaucrats in Washington who are making up the rules and holding up permits. It's your neighbors, the people who live down the street," he said.

"The reason that's relevant is it's not some bureaucrats in Washington who are making up the rules and holding up permits. It's your neighbors, the people who live down the street," he said.

"So they see the results of the human and business suffering, so it seems to me they have every incentive to expedite the process. If anyone thinks this is a Washington-imposed slowdown, that we have a big pile of these permits that we're just sitting on, it couldn't be further from the truth."

Refutes complaints

Some accusations against regulators are simply wrong, he said. At a meeting in Louisiana this week a businessman accused the ocean energy bureau of sitting on three shallow-water drilling permits his company had filed in October.

When bureau staff checked their records it turned out one of the permits had been granted and the other two were filed earlier in the week.

"That guy just told us a tall tale," Bromwich said.

Bromwich also denies claims the pace of permitting reflects a desire by the Obama administration to stop all offshore drilling.

"I have very little contact with the White House," Bromwich said. "They're interested in what I do, but they can't lean on me to do political things.

"I don't like having our agency and me personally attacked in the press as job killers. So all the incentives are on us to trying to get this to move forward."

If anything, he said, field personnel may have slowed the pace of permitting because they fear criminal liability if they make the wrong decision in the wake of the Deepwater Horizon accident.

Jennifer A. Dlouhy contributed to this report from Washington and Brett Clanton from Houston.

tom.fowler@chron.com