Just one day after meeting with the oil and gas industry in Houma, La., last week, Interior Secretary Ken Salazar unveiled the Obama administration’s “Smart from the Start” initiative to speed up the permitting process. Only this wasn’t permitting for offshore oil drilling, but wind farms off of the East Coast.
“To fully harness the economic and energy benefits of our nation’s vast Atlantic wind potential,” Salazar said, “we need to implement a smart permitting process that is efficient, thorough, and unburdened by needless red tape.”
If only Salazar would apply this regulatory philosophy to offshore drilling, then perhaps the Gulf Coast region’s economy could begin to recover.
Just one new deepwater drilling permit has been approved since the administration’s drilling moratorium was lifted in October — a sharp decline compared to one year ago.
Last week GNO Inc., an economic development agency serving the 10-parish New Orleans region, released its third installment of the Gulf Permit Index detailing the issuance of permits since the ban was lifted. Even though the moratorium has ended, the index shows little progress on pending permits.
Salazar and Bureau of Ocean Energy Management, Regulation and Enforcement Director Michael Bromwich came to Houma last week to discuss challenges facing the industry. But many industry leaders left the meeting unsatisfied and complained that a “de facto” moratorium still existed.
“This week’s announcement … shed no new light on the stalls in permit issuance,” said to Gregory Rusovich, chairman of the Business Council of Greater New Orleans and the River Region. “Jobs in southeastern Louisiana remain at risk until the federal government opens up the permitting process.”
Despite the federal moratorium only being aimed at deepwater drilling, shallow-water permits have also declined over the last three months. The average is just four per month, a 44 percent decline from this time last year.
Jim Noe, executive director of the Shallow Water Energy Coalition, on Monday wrote in the Washington Times: “Perhaps the most fundamental problem plaguing the permitting process is the agency’s continued insistence on painting the entire industry with one broad brush, ignoring fundamental, scientific distinctions between offshore operations – natural gas versus oil drilling; shallow versus deep water.”
Safety concerns for delaying permit issuance is difficult for industry leaders to understand with no major incident in shallow-water drilling since 1949 and only 15 barrels of oil spilled in blowouts during the last 15 years.
BOEMRE, the agency that issues offshore drilling permits, is enforcing new requirements for obtaining permits, but those requirements — such as the Interim Drilling Safety Rule — lack clarity for the industry as no one knows if those regulations will change. Also these new requirements lack an accompanying increase in BOEMRE staff to administer them, increasing the time needed to complete the permit review process.