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Shallow Water Drilling Effectively Banned

From CNN’s Money.Com:

A Spartan Offshore rig, in better times. The rig is now idle, its contractors unable to get drilling permits.

Stealth ban on Gulf drilling

By Steve Hargreaves, Senior writer

June 25, 2010

NEW YORK (CNNMoney.com) — The offshore drilling ban imposed after the BP disaster is only supposed to hit operations in deep water — 500 feet or more.

But drillers in shallow water say they haven’t been issued permits since the April 20 explosion. The delay has already forced hundreds of layoffs, and many more could be on the way.

"I’m almost out of business over here," said Paul Butler, president of Spartan Offshore, a small drilling company in Metairie, La.

Butler said that only one of his four drill rigs are operating; all four were drilling before the spill. Spartan has six contracts that would put his entire fleet back to work, but he can’t get going until the permits come through, he added.

The week before last, Butler said he had to lay off 72 employees. Come Tuesday he’ll have to let another 140 go.

"That’s 140 families, is how I look at it," Butler said.

Same is true at Hercules Offshore, the largest shallow water driller in the Gulf.

"The Department of Interior isn’t issuing permits," said Jim Noe, a Hercules executive. "By mid July all of our rigs will be on the beach, and the workers without a job."

That could be a lot of jobs.

Jobs on the line: Deep water drilling, which is currently banned while an investigation into the Deepwater Horizon accident is underway, is estimated to employ at least 35,000 people on both the rigs and in jobs that support them.

Nearly that many jobs could also be at stake over shallow water drilling. While shallow water rigs are smaller and employ only about half as many people, there are almost twice as many of them in the Gulf, according to the Louisiana Mid-Continent Oil & Gas Association

Safety first: An Interior Department spokeswoman said there is no freeze on shallow water drilling. However, she said, new safety procedures were put in place following the Deepwater Horizon spill.

"Companies have to comply before we can issue them permits," the spokeswoman said. "No one has fully complied."

Spartan’s Butler said there was a long delay between when Interior stopped issuing permits and when the new safety guidelines came out. Indeed, the first Interior Department notification to oil companies about the new requirements was dated June 8, nearly two months after the disaster.

Butler said he has been scrambling to get his paperwork in order and hopes that permits will be issued soon

Are we supposed to believe that these companies which have been able to qualify for permits up until April now no longer know how to meet the government’s requirements?

Or is it really just a way to stop drilling without risking being overturned by some troublesome judge?

This article was posted by Steve on Monday, June 28th, 2010. Comments are currently closed.

2 Responses to “Shallow Water Drilling Effectively Banned”

  1. Rusty Shackleford says:

    It’s either the “Law of unintended consequences” or, the boy is naive, or, it’s purely intentional.

    My money’s on the latter.

  2. BigOil says:

    I’d say this defacto offshore drilling ban is not at all stealthy. It is simply a continuation of the ongoing use of bureaucracy and the permitting process to stifle energy developement.

    How many years has it been since a refinery or nuclear plant has been built? I’ve also read that no new coal mining permits have been issued since Barry took office.

    Why even bother passing Cap and Tax when the federal bureaucracy in the executive branch can achieve the same result? Green energy can only be price competitive by choking off the supply of affordable forms of energy.

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