Salazar to Issue New Drilling Moratorium

WASHINGTON (Dow Jones Newswires), June 23, 2010

U.S. Interior Secretary Ken Salazar, who had imposed a six-month ban on deepwater drilling in the U.S. in response to a vast BP oil spill in the Gulf of Mexico, told lawmakers on Wednesday that he would take a look at issuing a new, scaled-back moratorium in the "weeks and months ahead."

"We will in the weeks and months ahead take a look at how it is that the moratorium in place might be refined," Salazar told the Senate Appropriations Committee.

"It might be that there are demarcations that can be made based on reservoirs where we actually do know the pressures and the risks associated with that versus those reservoirs that are exploratory in nature," Salazar said. "The moratorium order that we will issue will include the criteria under which it is appropriate to take a look at the lifting of the moratorium."

His comments came one day after a federal judge in New Orleans struck down the six-month deepwater-drilling ban, saying the Obama administration's policy went too far and was damaging the economy.

Salazar said one issue is that the blowout preventer used to drill the Macondo well remains on the floor of the Gulf of Mexico. The device is a last-resort device intended to shut off underwater wells in the event of a pressure surge. "We're still in a very dynamic situation," Salazar said. He said that while the conduct on the Deepwater Horizon rig leading up to the April 20 explosion was "reckless," [we] "also know that we are not going to have a critical evidence" until "after we get this well killed." That is unlikely to happen until August, when the first of two relief wells is supposed to be completed, Salazar said.

Copyright (c) 2010 Dow Jones & Company, Inc.


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