US Interior Department Defends Drilling Permit Process
September 13 2010 - 12:36PM
Dow Jones News
A top official at the U.S. Interior Department is defending the
speed at which the department issues new permits for shallow-water
drilling.
The official addressed shallow-water drilling permits after
weeks of intense criticism from oil and gas companies, which say
the Interior Department has started to drag its heels on
application approvals.
The companies say the length of the department's review process
represents a de facto moratorium on shallow-water drilling, even
though the administration's real moratorium applies only to
deep-water drilling activity.
In a statement Monday, however, the director of the influential
Bureau of Ocean Energy Management, Regulation and Enforcement said
newly adopted safety requirements have lengthened the application
review process.
"We will not approve applications until and unless they fully
comply with the new requirements," said the director, Michael
Bromwich. "That will not make everyone happy, but it is the right
way to proceed."
Bromwich pointed to two sets of requirements that the Interior
Department adopted following the Deepwater Horizon oil spill, which
require oil and gas companies to submit a raft of technical and
environmental information when applying for permits.
In the weeks since those requirements were issued, the Interior
Department says it has received 13 drilling applications and has
approved five of them.
"The central fact is that it has taken time to submit and verify
the additional required information," Bromwich said.
The speed at which the department has granted new shallow-water
permits has become a sensitive topic for oil and gas companies.
They assert that 44 rigs in the Gulf of Mexico, or more than 75% of
the rigs in that area, will go idle by the end of the month if the
department does not speed up its approval process.
Companies operating in shallow water include Apache Corp. (APA),
Rowan Cos. (RDC) and Hercules Offshore Inc. (HERO).
-By Tennille Tracy, Dow Jones Newswires; 202-862-6619;
tennille.tracy@dowjones.com