Jane Van Ryan
Posted December 9, 2010
The administration is erecting more roadblocks to offshore drilling. According to published reports, the government will require an environmental assessment for each and every deepwater well. It also plans to extend the government's timeframe for exploration plan review from 30 to 90 days.
As a result, the plan approval and permitting process will take longer than ever before and further delay the offshore development of U.S. oil and natural gas.
API's Upstream Director Erik Milito told the Houston Chronicle the decision to require an environmental assessment for each well adds more red tape to the permitting process and gives less flexibility to regulators who have the authority to waive environmental assessments when appropriate.
Mark Shuster of Shell Oil said it's a matter of significant concern if an environmental review must be completed for sidetrack wells, which are drilled near existing wells. In recent years, oil companies have sought to reduce their footprint by drilling several wells from one drilling rig or platform, often within a few yards of each other. These wells help to locate the boundaries of the oil or gas deposit, manage it effectively, and improve the efficiency of energy production.
According to Shuster, Shell already is preparing environmental information at the request of regulators for its proposal to drill a deepwater well in its Appomattox discovery. As Platts reported recently, other drilling applications have been sent back to operators with requests for more information. Only one deepwater permit request is under consideration by the Interior Department now.
Earlier this week, Sens. Mary Landrieu (D-La.) and Lisa Murkowski (R-Alaska) sent a letter to the Senate Appropriations Committee asking committee leaders to stop the new 90-day period for reviewing permit applications. The letter stated that "our nation's offshore oil and gas industry is still reeling from the economic impact of the moratorium...Adding more time to the clock will only serve to further delay a process that needs to be accelerated."
Actions that delay the exploration and production of oil and natural gas threaten the stability of supplies and U.S. energy security. All credible energy demand forecasts show that American consumers will continue to need oil and natural gas for several decades in the future. The United States should encourage investment in U.S. energy production to ensure a steady supply of American energy, as well as to create jobs, stimulate economic growth, improve the nation's trade balance, and generate revenues for government.
A graphic located on API.org provides an overview of the permitting process as it existed in 2009.
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