Friday, February 18th, 2011

News

In a case regarding the British drilling company Ensco, Judge Martin Feldman, a District Court judge from Louisiana, has issued a statement that in effect orders the Obama administration to expedite the permitting process for new deepwater oil wells in the Gulf of Mexico. Additionally, he stated that it the Department of the Interior was required to process drilling permit applications in a reasonable period of time. He went on to say that, “Not acting at all is not a lawful option.”

Reports from the New York Times indicate that the delays in processing these applications are due to the imposition of the Department of the Interior’s Secretary Ken Salazar’s policy of a moratorium on deepwater drilling after the BP explosion last April. However, Judge Feldman has stated that the delays in processing are increasingly driving deepwater drilling companies to relocate to foreign locations. This trend could have adverse effects not only on the local Louisiana economy, but also on the broader US economy particularly with regard to gas prices.

The response of the Department of the Interior’s Secretary has been that drillers have not yet shown they have revised their policies or improved technology to make deepwater drilling safer. Despite this, the results of the case involving Ensco, were that Judge Feldman has ordered the Department of the Interior to decide within 30 days to approve or disapprove the drilling permits required by the company to continue is drilling operation in the Gulf.

There are indications that companies are making great strides in improving the technology necessary to deal with the blowout demonstrated this past April by Deepwater Horizons. The association of oil companies named Marine Well Containment Company, which is comprised of BP, Chevron, Conoco Philips, Exxon Mobil, and Shell have recently received encouraging responses from the spokeswoman for the Bureau of Ocean Energy Management, Regulation, and Enforcement, the bureau in charge of dispensing permits for deepwater drilling.

Sources:

http://www.nytimes.com/2011/02/18/business/energy-environment/18oil.html?partner=rss&emc=rss

http://www.louisianarecord.com/news/233482-gulf-drilling-can-resume-in-30-days-judge-rules

http://www.marketwatch.com/story/gulf-prospects-lead-to-weekly-gain-for-drillers-2011-02-18