Hastings to Push Bill to Move US on Drilling Permits

WASHINGTON (Dow Jones Newswires), March 16, 2011

A leading House Republican said Wednesday he will push legislation to force the Obama administration to issue permits for offshore oil drilling more quickly.

Rep. Doc Hastings (R., Wash.), chairman of the House Natural Resources Committee, began to build a case for that legislation Wednesday by hearing testimony from officials from Texas, Louisiana, and other states on the Gulf of Mexico about the negative economic fallout of delays in issuing the permits.

Hastings said he would pursue legislation "to put the Gulf of Mexico back to work" and "to reverse President Obama's imposition of an offshore-drilling moratorium outside the Gulf of Mexico."

After an explosion last April on a rig leased by BP PLC (BP, BP.LN) led to the worst offshore oil spill in U.S. history, federal regulators revised safety requirements for offshore drilling. They lifted a moratorium on issuing new deep-water permits in October, but officials in Gulf states and Republicans in the U.S. House say the pace of issuing permits has not returned to a level that would allow the fragile Gulf economy to recover.

"We support that it cannot be business as usual, but we also believe we can have regulation without strangulation," Scott Angelle, secretary of the Louisiana Department of Natural Resources, told lawmakers at a House Natural Resources Committee hearing Wednesday.

One of the central reasons for a delay in new permits is the requirement that each new well undergo an individual environmental review, Angelle said.

Indeed, the Obama administration says the delays are in place because the industry has not met new safety requirements, including the ability to contain a spill from a well tens of thousands of feet below the surface of the sea.

"This is not just a bureaucratic slowdown. This is a necessary step to see that this industry is operating properly," Rep. Rush Holt (D., N.J.), said Wednesday.

The Bureau of Ocean Energy Management, Regulation, and Enforcement says it has approved 38 shallow-water permits since June 8 of last year, when it issued new regulations. There were 16 permit applications for new wells pending as of March 16.

In deep water, BOEMRE says it has received 44 permit applications since October for new wells that would be subject to new safety requirements. The agency says it has returned 17 to operators with requests for more information, often with regard to subsea containment of an oil spill. As of March 14, two deep-water permit applications had been approved.

The agency also says it has recently seen an increase in permit applications. Since March 1, it has received 11 applications for shallow-water permits and 10 for deep-water permits.

The administration also won a stay Tuesday of a federal judge's ruling that it must act on five permit applications from London-based Ensco, which had sued the Interior Department. An appeals court ruled that the administration does not have to act on the applications while the court considers its appeal.

Copyright (c) 2011 Dow Jones & Company, Inc.


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