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The End of the Drilling Permitorium? Guess Again

The first permit issued for drilling in the Gulf since the Obama administration declared a moratorium is ... not for a new well at all.

by
Jazz Shaw

Bio

March 4, 2011 - 12:00 am

Supporters of a sane, productive national energy policy must surely be popping champagne corks and blasting their vuvuzelas all across the land this week.  After 314 days of the United States government holding the nation’s oil industry hostage in a fashion which hearkened back to the Carter administration, the first deep water drilling permit in the Gulf of Mexico has been issued.

Or has it?

As The Hayride points out, this wasn’t actually a new permit. It was awarded to Noble Energy for a well at the Santiago project, located off the coast of Louisiana, not far from the scene of the Deepwater Horizon blowout. Last summer the operators had already drilled more than 13,500 feet down, well on their way to the estimated 19,000 feet required to reach the oil when they encountered an obstruction. The permit in question was actually permission to bypass that obstruction and complete the original job.

None of that stopped Michael Bromwich, head of the Obama administration’s Bureau of Ocean Energy Management, Regulation and Enforcement, (BOEMRE) from proclaiming it a glorious benchmark in the efforts of the oil industry to work with the federal government.

“This is a new well in the sense it is going into a reservoir and therefore was barred under the moratorium,” Bromwich said. ”So we treat an application for a bypass like this much as we do for new wells. I don’t think it’s right to say, ‘Oh it’s just a bypass so its not as significant as a permit for a new well.’”

The truth is that there is a significant difference which the administration is attempting to downplay. This was a well which was nearly completed at the time of the BP accident and it could have been online and producing long ago. But even though there were no serious concerns raised about this rig, they have been forced to jump through one hoop after another, installing new equipment and documenting modified protocols for months on end.

None of that is a bad thing in and of itself. While human error and a cascading series of mechanical failures were to blame for Deepwater Horizon, a potential weakness in standard systems was identified and energy developers needed to respond. And they have.

The problem is that BOEMRE isn’t going to accept — at least at this point — a new safety system being put in place for the industry or each individual company. They currently want a discrete review conducted for each and every individual drill site permit, no matter how repetitive, with the same level of reporting and review required before the necessary paper is issued. Industry insiders have already expressed private concerns that such a system will continue a de facto permitorium indefinitely.

So how did this one approval slip through the ropes and into the ring? It’s a fairly safe bet that the president is feeling the pressure not only of public opinion and pleas from the energy industry, but from two separate courts effectively holding him in contempt for not obeying an order to get the oil rigs back in business. If they can show that some permits are going out it will probably lend some ammunition to the defense in their efforts to maintain the status quo.

But even issuing one single permit, no matter how many safety precautions have been put in place, won’t be enough to satisfy some of Obama’s hard-core anti-drilling base. Observe the reaction of David Dayen of Firedoglake fame upon learning that the Santiago well was not owned entirely by Noble Energy, but also in large part by — wait for it — British Petroleum. The phrase “fit to be tied” leaps to mind.

Putting two and two together, there does seem to be a pattern emerging which could lend itself to theories about how Barack Obama plans to keep his base happy as he faces a decidedly uphill battle for a second term. I’m not generally one given to conspiracy theories, but I may have to take a fresh look at the comments of one of his prospective challengers this week.

Mississippi Gov. Haley Barbour, a potential presidential contender, accused the Obama administration Wednesday of favoring a run-up in gas prices to prod consumers to buy more fuel-efficient cars.

Barbour cited 2008 comments from Steven Chu, now President Barack Obama’s energy secretary, that a gradual increase in gasoline taxes could coax consumers into dumping their gas-guzzlers and finding homes closer to where they work. Chu, then a Nobel Prize-winning professor, argued that higher costs per gallon could force investments in alternative fuels and spur cleaner energy sources.

I’d really prefer not to think along those lines. Maybe my rose colored glasses are welded too firmly to the bridge of my nose, but I would hope that any sitting president would do anything in their power to avoid inflicting more economic pain on a nation already struggling with a fiscal crisis like this one. But then again, I also keep clinging to the idea that Devo will have another top ten hit any day now.

Jazz Shaw is a heretical, Northeastern former RINO and the weekend editor at HotAir.com He can be reached at jazzshaw@gmail.com. Or you can follow him on Twitter @JazzShaw
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