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Mr. President: Get Interior’s House in Order

June 3, 2010

Utter Confusion reigns at MMS and Interior

June 5: President Obama must act decisively to remedy the permitting operations for new offshore oil wells. Given the lack of clarity on the moratorium on new offshore drilling and continued flip flopping by DOI and MMS, it’s clear that the Administration is in no position to permit new wells. Action is needed to ensure that there are no repeats. Repeated visits to the Gulf are important, but won’t do the job.

Consider the following chronology:

In April, after the the explosion of BP’s Deepwater Horizon rig, Bandon Oil andGas applied for a permit to drill in 115 feet of water.

May 27: Administration announces moratorium on new drilling; however, the moratorium has an important exemption — wells in water depths less than 500 feet may proceed.

June 2: Little more than a month after  Bandon’s application, MMS grants the company its permit. The site is 50 miles south of the Louisiana coast about 200 miles west of the Deepwater Horizon site. The water depth is 115 feet and was not covered by the moratorium. However, as we pointed out in our story of June 2nd, the permit approved specifies that the equipment is rated to drill to a depth of nearly 5 miles below the crust. Drilling this deep is risky due to the high pressures and high temperatures of the oil. Deep drilling and not just deep water led to (a) the BP blowout and (b) the many failed efforts to stop the gush of oil.

June 2-June 3: Significant media scrutiny and environmentalist opposition to the new permit. I personally called Frank Quimby one of the chief communications officers at DOI and pointed the risk of blowouts from deep drilling and the political risks of moving issuing new permits without public accountability and independent review.  SF Chronicle, columnist Yobie Benjamin had published an excellent piece siting these issues and the lack of a publicly available safety plan. The Center for Biodiversity strongly protested the permit.

June 3 AM: Michael J. Saucier, regional supervisor of field operations for the MMS Gulf of Mexico region, said in an e-mail to one company seeking a permit that “until further notice we have been informed not to approve or allow any drilling not matter the water depth.” Only three days earlier the company had been informed that drilling in water up to 500 feet deep would not be affected by the Obama moratorium. (Source: SF Chronicle City Brights Column)

June 3 PM: DOI denies that it the drilling freeze was extended to shallow waters. See the following excerpt in the Washington Post article:

Later, as hedge fund and investment bank trading desks scrambled to decipher the administration’s intentions, an Interior Department spokesman said “shallow water drilling may continue as long as oil and gas operations satisfy the environmental and safety requirements Secretary [Ken] Salazar outlined in his report to the President and have exploration plans that meet those requirements. There is no moratorium on shallow water drilling.”

Wow: so who is calling the shots at DOI anyway? Oil companies? Oil state senators? Hedge fund managers? Hmm.. they sound familiar, Mr. Salazar?

Clearly, the President must act decisively, and to make it clear that the moratorium will cover all new offshore permits including those in shallow water. He should open the permitting process the full scrutiny of the public, the media and independent experts.

Mr. President, in the words of James Carville, “you need to be the big daddy.”

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