US Interior Secretary Ken Salazar said he is lifting the Obama administration’s ban on deep-water drilling, citing new safeguards intended to prevent a repeat of BP Plc’s spill in the Gulf of Mexico.
‘I have decided that it is now appropriate to lift the suspension on deepwater drilling for those operators that are able to clear the higher bar that we have set,” Salazar said today on a conference call with reporters.
President Barack Obama halted oil and natural-gas drilling in waters deeper than152 metres after BP’s Macondo well off the Louisiana coast blew out April 20, killing 11 workers and setting off the biggest US oil spill. The moratorium was opposed by officials in Gulf Coast states, who said it only added to the economic devastation caused by the spill’s effect on fishing and tourism.
Lifting the six-month moratorium, in place since May 27, won’t immediately lead to new drilling, Michael Bromwich, director of the Bureau of Ocean Energy, the Interior Department unit that oversees energy production, has said. Few drilling permits are likely to be issued in the month after the suspension is lifted as companies work to meet new requirements, Bromwich told a panel investigating the spill on September 28.
$183 million a year
The new rules will add $183 million a year to the cost of drilling on the Outer Continental Shelf, the Interior Department said in a notice to be published October 14 in the Federal Register. Each new deep-water well that uses a floating rig will cost an additional $1.42 million. Shallow-water wells will cost an extra $90,000.
The rules will add less than 2 per cent to the cost of a deep-water well and 1 per cent for shallow wells, the department said. Deep-water wells drilled from floating platforms typically cost about $90 million to $100 million.
“The overwhelming share of the cost imposed by these regulations will fall on companies drilling deep-water wells,” the department said.