U.S. to Issue More Gulf Drilling Permits
NEW ORLEANS—Michael Bromwich, the top U.S. offshore-drilling regulator, said Tuesday that the speed with which some oil and gas companies are shrugging off last year's deadly Deepwater Horizon disaster as an aberration is disturbing.
Nonetheless, Mr. Bromwich, who heads the Bureau of Ocean Energy Management, Regulation and Enforcement, said more permits to drill for oil and gas in the Gulf of Mexico's deep water would be issued "within the next week."
In recent weeks, the agency has issued four deep-water drilling permits, including one Tuesday that allows Exxon Mobil Corp. to drill a new well in 6,941 feet of water. Those permits are the first to be issued since such operations were shut down for deep-water drilling in response to the Deepwater Horizon's explosion and subsequent oil spill. On Monday the agency also awarded Royal Dutch Shell PLC the first deep-water exploration plan since the disaster.
Some oil and gas companies have "clearly recognized that Deepwater Horizon was the symptom of a broader failure in both industry and government" to match safety with the increasing risk of deep-water operations, Mr. Bromwich said in a speech during the agency's annual meeting.
"But there are other operators who, with surprising and disturbing speed, have seemed all-too-ready to shrug off Deepwater Horizon as a complete aberration, a perfect storm, one in a million," Mr. Bromwich said.
He also said a shallow-water natural gas well operated by Apache Corp. that leaked for several days this year shows that risks aren't confined to deep water. Deep water is typically that over 1,000 feet.
Apache spokesman Bill Mintz said the company worked closely with regulators to stop a bubbling natural gas well, which released no oil and caused no injuries. The Houston company was permanently plugging wells in a depleted gas field when the bubbling was noticed, he said.
"Apache knows very well that the risks of operating offshore are neither trivial nor non-existent," Mr. Mintz said in an email.
Though he told regulators that more deep-water drilling permits will be approved "in the coming weeks and months," he said after the speech that some projects would be approved in the next week.
Mr. Bromwich said he couldn't predict the pace at which permits will come from the agency, because each project will be considered individually.
"I don't know what the pace will be going forward," he told reporters. "I don't think anyone is in a position to say what that will be."
The key for permits being issued is the development and readiness of a pair of spill-containment systems, one built by a nonprofit consortium of large oil companies, the Marine Well Containment Co., and the other owned by Helix Energy Solutions Group Inc., which helped stanch the flow from BP PLC's runaway well after the Deepwater Horizon rig exploded.
"The tests that have been conducted so far, even though they're not under spill conditions, give us the confidence that has been necessary for us to be comfortable in approving these permits," Mr. Bromwich said.
Mr. Bromwich also said there is a "high probability" some offshore leases will be extended to account for the five-month drilling ban that followed the Deepwater Horizon disaster and subsequent permitting delays. But he said he was "cool" to the idea of extending all leases by a certain amount of time.
Write to Ryan Dezember at ryan.dezember@dowjones.com
Sign In to comment
Rich Cocovich
rick martin
JESS ARMOR
Tim Dolan
WILLIAM VASCONI
Victor Connor
Bill Bunting
Custom HTML Preview
Archived Comments
Yes indeed BO will do this over the next 30 years. Oh he will be gone , by then so who will issue the permits?
Watch what they do, not what they say. While Obama has choked off US production, we, the US, loaned Brazil $2 billion to develop their offshore wells so they could sell their oil to the highest bidder.
Can you imagine for just a moment if the US government loaned $2 billion to US energy companies to develop US energy fields? We might even find huge offshore oil fields like Brazil has. But if we aren’t looking for them, we’ll never find them.
Brazil on the other hand, is now an energy EXPORTER due to their recent finds. So while we import more oil than ever before, and while we loan money to other countries to develop their oil, we strangle and propose raising costs and taxes on US companies. With Obama, you are treated better as a foreign company than as a US company.
And you wonder why companies and jobs are moving out of the US?
Not only are we shutting down our production capability, delaying every permit as long as possible, at the same time we are loaning money (of which we have to borrow 42% from abroad) to our competitors (Brazil, Mexico & Canada) so they can develop their wells, create jobs in those countries, create tax revenue in those countries, all so the end product can then be sold to us, thereby actually increasing our dependence on foreign sources of oil and shipping more jobs, taxes, and money out of the US.
I guess “green energy” means we pay our green to other countries so we can get energy from them that we loaned them money to produce in the first place!
BTW, the production from the Brazil Tupi fields, which we lent the $2 billion to develop, is all under contract to China. What a smart guy that Obama is. But don't worry; we'll all have government provided health care as we go down the tube!
Are we really that stupid? Apparently so.
no all of us, just the "yes we can crowd" that elected obama.
We definitely need to get moving one way or another away from the umbilical chord of the middle east.
Rich Cocovich
Global Star Capital
www.globalstarcapital.com
What To Read Next...