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November 22, 2010

Salazar meets with shallow water drillers

Secretary of the Interior Ken Salazar was in Louisiana today for a meeting with shallow water drillers. He was accompanied by Assistant Secretary Tom Strickland, and Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich.

He came after Senator Mary Landrieu dropped a hold she on the nomination of Jack Lew, President Obama's nominee to be Director of the Office of Management and Budget. She had blocked the nomination In a bid to force the Obama administration into action on getting offshore drilling permits moving.

On November 18, she dropped the hold after getting a commitment Interior Secretary Ken Salazar "to provide certainty and regulatory clarity to an industry that has operated in the dark for months with shifting rules."

Mr. Lew was later confirmed by the Senate.

According to Senator Landrieu, Secretary Salazar agreed to come to Louisiana "to meet with industry and express the Administration's support for the oil and gas industry. He will outline the path forward so that permits will be issued and the people of Louisiana can get back to work in this vital industry."

While Secretary Salazar kept his commitment to come to Louisiana, industry leaders still seem to be dubious on whether he delivered very much more than rhetoric.

A statement from the Department of the Interior says they "discussed the implementation of reforms that are raising the bar for safety and environmental protection in oil and gas operations on the Outer Continental Shelf (OCS)"

"Oil and gas resources from the Gulf of Mexico are - and will remain - important components of our nation's energy portfolio, but we must ensure that they are being developed safely and responsibly," said Secretary Salazar. "I am encouraged that operators are moving quickly to comply with the higher standards for safety and environmental protection that we have set. We will continue to work with the industry and stakeholders to provide certainty and ensure that everyone understands the rules of the road."

"Since June, BOEMRE has been in frequent communication with representatives from the oil and gas industry and the shallow water drilling coalition regarding shallow water drilling permits," said Director Bromwich. "Our ongoing discussions underline our commitment to working with industry to clarify any confusion in the federal regulations. BOEMRE is working as expeditiously as is safely possible on processing shallow and deep water permits."

Salazar, Strickland, and Bromwich told oil and gas industry representatives that BOEMRE will continue to work as expeditiously as is safely possible to review drilling permits under new and existing rules and regulations.

According to the Department of the Interior:

As of today, BOEMRE has approved 16 new shallow water applications for permits to drill (APDs) and 48 revised applications for permits for existing wells submitted since June 8. The revised applications BOEMRE has approved included compliance information related to the drilling safety NTL. There currently are four pending applications for APDs for new wells and zero pending for revised permits for existing wells.

BOEMRE has reallocated approximately 20 personnel internally and across the Bureau's regions to assist with the review and processing of permits in the Gulf of Mexico on an interim basis. BOEMRE is awaiting congressional action on the President's FY 2011 budget amendment, which includes funding for the hiring of 24 full time employees - including engineers, geologists, and other professionals - who would be devoted to permitting, as well as training and information technology improvements to enhance the efficiency of the permitting process.

Following Director Bromwich's recent five-campus recruitment tour of engineering programs in Louisiana and Texas, BOEMRE received 555 applications for approximately 30 petroleum engineering positions, 30 inspector positions, and 20 summer internships.

"People are responding to our call to public service. They understand the importance of our mission and want to be part of it -- but we need to have sufficient resources to continue building our workforce. That will benefit both the public and the oil and gas operators who want their permit applications to be processed as quickly as possible," said Director Bromwich.

Jim Noe, Executive Director of the Shallow Water Energy Security Coalition, issued the following statement regarding the meeting.

"We appreciate the time and effort that Secretary Salazar, Deputy Secretary Strickland and Director Bromwich have taken to meet with our coalition to discuss the need to put the Gulf back to work ensuring the energy and economic security of the United States.

"However, we are disappointed that the federal government gave us no commitments at this meeting. While candid discussions are important to frame the issues, unfortunately the time for discussion has passed for many of our most expert and productive drillers in the Gulf. For them, the continual slowdown in permitting has gone situation critical, leaving them with the uncomfortable choice between economic ruin or leaving the Gulf entirely for other regions of the world. In either case, American workers, businesses, and consumers are paying the price.

"As our industry's track record demonstrates, shallow-water drillers remain committed to the highest standards of safe and responsible drilling practices and design. However, the continued radical uncertainty over what is sufficient to meet new government pronouncements has slowed activities in the Gulf's shallow waters to a trickle, diminishing both the security and economic vitality of the United States.

"Suffice to say, we are ready to get back to work. We hope that today signals the long awaited point where action at the Interior Department will match the rhetorical commitment to let Gulf Coast communities get back to work providing clean and secure fuels. The thousands of workers whose livelihoods depend on the Gulf of Mexico's shallow-water industry are counting on it."

The Shallow Water Energy Security Coalition comprises a group of companies--Apache Corporation, Arena Offshore, Chevron, Delta Towing, Dynamic Offshore Resources, Energy XXI, Ensco, Hall-Houston Exploration, Hercules Offshore, Phoenix Exploration, Rowan Companies, Seahawk Drilling, W&T Offshore, and Walter Oil & Gas-- that explore, develop and drill for natural gas and oil in the shallow waters of the Gulf of Mexico.


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