THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

White House won’t expand offshore drilling

Gulf spill adds weight to case for safeguards

LESSONS FROM DEEPWATER HORIZON “We need to proceed with caution and focus on creating a more stringent regulatory regime,” Ken Salazar said. LESSONS FROM DEEPWATER HORIZON
“We need to proceed with caution and focus on creating a more stringent regulatory regime,” Ken Salazar said.
By John M. Broder and Clifford Krauss
New York Times / December 2, 2010

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WASHINGTON — The Obama administration announced yesterday that it had rescinded its decision to expand offshore oil exploration into the eastern Gulf of Mexico and along the Atlantic Coast because of weaknesses in federal regulation revealed by the BP oil spill.

Interior Secretary Ken Salazar said that a moratorium on drilling would be in force in those areas for at least seven years, until stronger safety and environmental standards were in place. The move puts off limits millions of acres of the Outer Continental Shelf that hold potentially billions of barrels of oil and trillions of cubic feet of natural gas.

The latest decision is an admission that the plan announced last spring to open vast new coastal areas to oil and gas development was made without heeding the dangers of deep-water drilling and the profound flaws in the government’s program for overseeing it.

“As a result of the Deepwater Horizon oil spill, we learned a number of lessons,’’ Salazar said in an afternoon briefing, “most importantly that we need to proceed with caution and focus on creating a more stringent regulatory regime.’’

After the BP spill, Salazar disbanded the discredited agency charged with regulating offshore oil and gas operations, the Minerals Management Service, and replaced it with a new bureau with enhanced powers.

Exploration and production will continue in the central and western Gulf of Mexico under new safeguards put in place after the deadly BP Deepwater Horizon explosion and oil spill in April. Future gulf leases will be subject to further environmental and safety studies, he said.

Shell’s pending lease in the Arctic Ocean off the Alaska coast will be honored, but drilling will be allowed only after a new environmental review is completed and additional spill response requirements are met. That may push the oil company’s plans back by a year or more, officials said.

Other potential drilling sites in the Arctic will be studied before any leasing decisions are made for the 2012-2017 period, Salazar said.

The administration imposed a moratorium in May on all deep-water offshore drilling while the new safety procedures were drawn up. Salazar lifted the ban in October, and oil companies have been seeking new permits to resume exploration in the gulf. Oil industry executives complained yesterday that the government was overreacting to the BP spill and said that the new safeguards being imposed were more than adequate to prevent another major spill.

“This is an unfortunate decision that will eliminate badly needed government revenues, inhibit employment growth, and increase reliance on imported energy,’’ said Kenneth Cohen, vice president of public and government affairs at ExxonMobil. “It ignores the industry’s track record and commitment to improving environmental and safety performance as well as the overwhelming evidence that the Gulf of Mexico spill resulted from practices far outside industry norms.’’

The American Petroleum Institute called the decision a mistake at a time of national economic distress.

“I’m surprised and disappointed by this decision, which will stifle investment and clearly stop the creation of tens of thousands of jobs,’’ said Jack Gerard, president of the petroleum group. “This really compounds the problem with the existing de facto moratorium in the gulf. Eventually the oil and gas pipeline for production for the country will slow to a trickle.’’

Environmental advocates welcomed the administration’s reversal of a policy they had vigorously opposed.

“What it means is they’ve learned a great deal from the Macondo blowout and they’re taking a lot of places off the table that originally were going to be considered,’’ said Marilyn Heiman, an oceans specialist at the Pew Environment Group.

She said she was troubled, however, by the decision to move forward with continued exploration off the shores of Alaska.

“They still need to learn a lot more as it relates to drilling in the Arctic,’’ Heiman said.