The administration said it could be months before the rigs are actually back to work. Obama ends deep-water-drilling ban

The Obama administration Tuesday lifted its ban on deepwater oil and gas drilling a month ahead of schedule, but it isn’t enough to get its top budget nominee past Sen. Mary Landrieu, a Louisiana Democrat who said the move doesn’t go far enough.

Interior Secretary Ken Salazar removed the moratorium imposed after the BP oil disaster in April, but he said it could take months before the rigs off the Louisiana coast and the Gulf of Mexico are back to work.


But Landrieu said the announcement was unsatisfactory. As a result, she said, she will not remove her hold on the confirmation of Jack Lew, President Obama’s nominee to head the White House Office of Management and Budget.

“I applaud the administration for taking a step in the right direction by lifting the deepwater drilling moratorium,” Landrieu said in a statement. “Today’s decision is a good start, but it must be accompanied by an action plan to get the entire industry in the Gulf of Mexico back to work. This means that the administration must continue to accelerate the granting of permits in shallow and deep water, and provide greater certainty about the rules and regulations industry must meet. I strongly believe that we can do this safely and swiftly.

“I am not going to release my hold on Jack Lew,” she added. “Instead, I will take this time to look closely at how BOEM is handling the issuing of permits and whether or not drilling activity in both shallow and deep water is resuming. When Congress reconvenes for the lame duck session next month, I will have had several weeks to evaluate if today’s lifting of the moratorium is actually putting people back to work.”

White House press secretary Robert Gibbs called Landrieu’s hold “unwarranted” and “outrageous.”

“Our feeling on this is, the nomination of Jack Lew is not in any way connected to and shouldn't be in any way connected to" the drilling ban, Gibbs said at Tuesday afternoon’s press briefing.

“We know there’s inherent risks in doing this at all,” Gibbs said. “That we understand. But the belief of the secretary – I think rightly so – is that each operator has to certify what the worst case scenario is.”

The administration has been subject to constant political pressure from Gulf state lawmakers and the oil and gas industry concerned about job losses attributed to the ban, which covers drilling along the outer continental shelf more than 1,000 down.

“The policy position we’re articulating today is that we are open for business,” Salazar told reporters on a conference call.

“There will always be risks associated with deepwater drilling, but we have now reached the point where in my view we have reduced those risks,” he added.

Although the moratorium is lifted, the oil and gas industry will have to comply with new rules and tougher equipment and technology standards – including requiring independent certification of a well’s blowout preventer, a crucial piece of safety equipment which failed in the BP oil disaster. Interior’s new rules also include new workplace standards aimed at reducing human and organizational errors, such as the ones believed to have played a role in the Deepwater Horizon rig explosion.

“It will clearly not be tomorrow and it will not be next week,” said Michael Bromwich, director of the Bureau of Ocean Energy Management Regulation and Enforcement. “My sense is we will have permits approved by the end of the year, but how much before the end of the year I can’t say and how many before the end of the year I can’t say.’

The blame game on potential delays has already begun. Bromwich noted that although Interior wishes it has more inspectors, the bulk of any waits will be because the energy companies need to get their house in order before the department can act.

Interior will have 22 inspectors in place in the Gulf, and will transfer inspectors from other regions and asked Congress for additional funds. “We don’t have a lager number of additional inspectors in place,” Bromwich said. “We wish we did but we don’t.”

Salazar cautioned the industry that complaining about delays won’t go over well. “They want us to ignore the new reality and go back to business as usual. But that is simply not an option,” he said.

The Deepwater Horizon explosion, which killed 11 workers and triggered a massive oil spill, is widely considered the worst environmental disaster in U.S. history and took months to bring under control; oil billowing from the undersea well coated sensitive Louisiana marshlands and wildlife in crude oil.

The region also paid a heavy economic price: the disaster sidelined both fishermen and oil rig roughnecks, and the threat of tar-coated beaches nearly shut down summer tourism along the Gulf of Mexico.

“What they’ve done is they’ve gotten rid of the political problem,” of the deepwater drilling ban, said Dan Kish, senior vice president at the industry-funded Institute for Energy Research.

Since the April 20 explosion, Kish said, Interior has issued shallow water permits at a 10 percent clip of its previous rate over the past two years. “I don’t know what business can run at 10 percent of what it normally does,” he said.

Rep. Doc Hastings (R-Wash.), the ranking member of the House Natural Resources Committee, said “today’s announcement is so difficult to fully trust.”

“They claim their arbitrary, job-killing deepwater ban is being lifted, yet promise only to look at applications to resume drilling and vaguely threaten unknown new regulations in the future,” Hastings said.

Elgie Holstein, a senior director at the Environmental Defense Fund and former Energy Department chief of staff, called Interior’s new rules “a dramatic and sweeping new framework for ensuring a much higher level of worker and environmental safety.

“I think the moratorium has probably reached the end of its usefulness and we now need to move to a project-by-project evaluation so the industry can show it’s ready to do things in a new way,” he added.

Other environmentalists, however, were not pleased.

“This is an incredibly disconcerting and unjustified move, that could open the door for the next great oil disaster,” said Oceana’s Jacqueline Savitz. “Oil spills are common. The question is not whether there will be another spill but when. While the recent BP spill occurred on a well permitted by a previous administration, and based on regulations that were not devised by the Obama administration, that will not be the case with the next spill.”

Meanwhile, the administration-created National Oil Spill Commission will meet Wednesday afternoon in Washington, D.C., to discuss regulatory oversight and the future of offshore drilling.

Robin Bravender contributed to this report.