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Obama administration lifts 6-month oil drilling freeze

WASHINGTON — The Obama administration lifted the moratorium on deep-water oil and gas drilling Tuesday, but it will be weeks or months before drilling resumes while industry and government regulators scramble to meet strict new rules intended to prevent another disaster like the Deepwater Horizon explosion and spill in the Gulf of Mexico.

The moratorium, imposed after the BP accident that killed 11 workers and spewed nearly 5 million barrels of oil into gulf waters, was a blow to the oil industry and angered Gulf Coast communities dependent on offshore drilling for jobs and income.

The freeze was intended to address lax safety and environmental regulation that contributed to the BP crisis. Department of Interior regulators have written new protective measures that they believe will allow offshore operations to resume safely.

"We have made and continue to make significant progress in reducing the risks associated with deep-water drilling," Interior Secretary Ken Salazar said.

The new rules, issued by the Interior Department's new Bureau of Ocean Energy Management, Regulation and Enforcement, tighten standards for well design, blowout preventers, safety certification, emergency response and worker training.

The bureau estimates that compliance with the added regulations will cost the deep-water industry $183 million a year.

Although the suspension of the moratorium takes effect immediately, offshore operators will first have to submit new applications showing they have complied with the tougher rules and have their rigs inspected. Officials said they expected at least some of the rigs to be drilling again by the end of the year.

The moratorium was scheduled to expire Nov. 30, but the administration came under pressure to lift it sooner as companies began laying off workers, oil industry support businesses suffocated and several rigs moved out or were taken out of service. Two federal courts ruled that the moratorium was illegal, but it stayed in place as the government appealed.

The initial reaction to the decision was mixed, with environmentalists saying it endangered the gulf and the oil industry complaining that the new rules mean the ban will effectively continue.

Sen. Mary Landrieu, D-La., who has been among the most vocal critics, called it "a step in the right direction" but said the administration must speed the granting of permits and offer more clarity about the new rules.

Obama administration lifts 6-month oil drilling freeze 10/12/10 [Last modified: Tuesday, October 12, 2010 11:32pm]
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