The People of America's Oil and Natural Gas Indusry

Judge Orders Interior to Act on More Drilling Permits

Jane Van Ryan

Jane Van Ryan
Posted March 2, 2011

The Interior Department isn't off the legal hook yet. Although it finally issued one deepwater drilling permit this week after months of delays, U.S. District Court Judge Martin Feldman has ordered it to act on two more permit applications, raising the total number to seven.

In a ruling last month, Judge Feldman gave the Bureau of Ocean Energy Management (BOEMRE) 30 days to take action on five deepwater applications. Yesterday he said two additional applications from Houston-based ATP Oil & Gas Corp. were included in his order.

API President and CEO Jack Gerard called the approval of the first application "welcome news," but warned that the slow pace of permitting could be dangerous to U.S. energy security and the economy:

"[T]ightening the screws on domestic oil and natural production during a time of increased demand and global uncertainty is a formula for disaster. This slow moving process continues to stifle domestic production and puts thousands of jobs at risk in the Gulf and around the country."

A recent study by Wood Mackenzie indicates that as much as 680,000 barrels of oil equivalent Gulf production per day could at risk if permits continue to be delayed. The job losses could reach 125,000 per year by 2015.

Several members of Congress also have voiced concerns about the administration's drilling delays. Twenty-two House Republicans are reportedly floating legislation that would allow companies with drilling permits issued before May 2010 to move forward with exploration and production "without further review" by drilling regulators and "without further review or delay" under environmental regulations (The Hill). The bill's author, Rep. Tim Murphy (R-Pa.), says the United States has a choice: "...become energy independent or pay the price with more job losses, a worsening economy, and families crushed by higher gas prices...."

Similarly, Chairman of the House Energy and Commerce Committee Fred Upton (R-Mich.) said at an event yesterday that the United States needs to boost oil production to limit damage to the economy. As reported by Bloomberg, Upton said that instability in certain parts of the world and higher oil prices "threaten our economy in the months and years ahead."

The United States has an abundance of oil and natural gas, but government policies have inhibited its development onshore and offshore. After the Deepwater Horizon tragedy last April, the administration suspended the development of 33 deepwater exploratory wells in the Gulf of Mexico and imposed the moratorium which was struck down by Judge Feldman. There's no doubt about it; it's time to get domestic oil and natural gas production back on track.