New drilling moratorium issued as first drilling rig leaves gulf

The Obama administration issued a new drilling moratorium in the Gulf of Mexico Monday. Last month a federal court judge, citing oil drilling jobs, overturned the first deep water drilling moratorium. Interior secretary Ken Salazar vowed to come back with another one courts would accept. The first deep water drilling moratorium singled out drilling for oil at any kind of depths of 500 feet or more. The new drilling moratorium disregards depth and focuses on drilling circumstances and different technologies. The 2010 oil spill within the Gulf of Mexico dumped an estimated 140 million gallons of crude into the sea.

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At all depths, new drilling moratorium applies

Last week, a federal appeals court rejected an appeal by the interior department to restore its original offshore deep-water drilling moratorium, which halted the approval of any new permits for deep-water projects and suspended drilling on 33 exploratory wells. It was reported by the Washington Post that Salazar made the announcement Monday, arguing that a drilling moratorium is still needed to ensure that oil and gas companies implement safety actions to lower risks – and are prepared to deal with oil spills. Different from the first moratorium, which applied to drilling rigs in waters of more than 500 feet, the new one applies to any deep-water floating facility with drilling activities.

At risk are oil drilling jobs

Through Nov. 30, the new moratorium will last. Some permits could be allowed before then if drillers prove safety measures have been taken. Meanwhile, a New Orleans business group explained that the economic damage from a drilling moratorium would be worse than the toll taken by the oil spill within the Gulf of Mexico 2010. It was reported by Business Week that Michael Hecht of Greater New Orleans Inc. told the National Commission on the BP Deepwater Horizon Spill and Offshore Drilling at a listening to the six-month drilling ban may affect as many as 24,000 oil drilling jobs in Louisiana. Hecht said that the economic impact from the BP oil spill would be dwarfed by the impact from the moratorium.

Oil drilling companies not to be trusted

Salazar strongly disagrees with Hecht’s assessment of the outcome. Salazar said in a statement, “A pause on deepwater drilling is essential and appropriate to protect communities, coasts, and wildlife from the risks that deep water drilling presently poses. I am basing my decision on evidence that grows every day of the industry’s inability in the deep water to contain a catastrophic blowout, respond to an oil spill and to operate safely.”

First drilling rig leaves the gulf

At the national commission hearing, the CEO of a service provider for offshore drillers said drilling rigs will leave the Gulf because of the drilling moratorium. One has proven right so far. The Houston Chronicle reports that on July 9 Diamond Offshore announced that its Ocean Endeavor drilling rig will leave the Gulf of Mexico and move to Egyptian waters quickly — making it the first to abandon the gulf in the wake of the BP oil spill and the drilling moratorium being tested in the courts.

Discover more information here:

Washington Post

washingtonpost.com/wp-dyn/content/article/2010/07/12/AR2010071203003.html?hpid=topnews

businessweek.com

businessweek.com/news/2010-07-12/economic-damage-of-drilling-ban-to-dwarf-oil-spill-hecht-says.html

Houston Chronicle

chron.com/disp/story.mpl/business/7101738.html