UPDATE 3-US to issue more flexible oil drilling moratorium

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Wed Jun 23, 2010 4:08pm EDT

 * Salazar says new drilling moratorium can be adjusted
 * Drilling may be allowed in certain oil reservoirs
 * New team to investigate misconduct by gov't, oil workers
 (Recasts, updates throughout, adds analyst comment)
 By Tom Doggett and Ayesha Rascoe
 WASHINGTON, June 23 (Reuters) - The U.S. government will
revise its restrictions on offshore drilling, which could allow
some deepwater oil projects to go forward after a court threw
out the Obama administration's blanket drilling ban, a senior
official said on Wednesday.
 U.S. Interior Secretary Ken Salazar told a congressional
panel the new moratorium would be adjusted and would include
criteria for ending the ban. He did not provide more details on
how the new moratorium would get around the judge's ruling or
when it would be released.
 He suggested some drilling in proven oil fields might move
forward. That would be good news for companies like Petrobras
and Royal Dutch Shell, which were set to delay major projects
on fields that offer the best new source of domestic crude.
 "It might be that there are demarcations that can be made
based on reservoirs where we actually do know the pressures and
the risks associated with that versus those reservoirs which
are exploratory in nature," Salazar said.
 "We will in the weeks and months ahead take a look at how
it is that the moratorium in place might be refined," he said.
 President Barack Obama's administration imposed a six-month
moratorium on deepwater drilling after BP Plc's (BP.L) (BP.N)
massive spill, which has devastated wetlands and communities
along the U.S. Gulf coast.
 Limiting the moratorium based on the risks associated with
certain reservoirs may not be easy, said Ken Medlock, an energy
fellow at the Baker Institute at Rice University.
 "I think it's going to be difficult for them to actually
implement this kind of plan. The geology with regard to fields
out there is actually quite complicated," Medlock said.
 Fields can have different pressures in different areas, so
it may be hard to determine risks, he added.
 The ban was placed on all exploratory and development wells
in waters more than 500 feet deep while a special presidential
commission investigated the cause of the spill and what changes
need to be made to offshore drilling.
 Thousands of high-paying oil workers and the related
service jobs that supported them have been sidelined, adding to
the economic woes of the Gulf Coast states that have had their
fishing and tourism industries hurt by the oil spill.
 But on Tuesday, a U.S. judge ruled against the government,
calling the ban "a blanket, generic, indeed punitive
moratorium."
 The Obama Administration also said it would appeal the
federal court ruling.
 Salazar would not say how the new moratorium would get
around the judge's ruling against a blanket ban, but Salazar's
move to include criteria for lifting the ban and possibly
allowing drilling for certain fields may be the answer.
 The secretary would not commit to issuing the new drilling
moratorium this week.
 "We're working out the specifics. I have a meeting this
afternoon on when we'll do it," he told reporters after the
hearing.
 Meanwhile, the new head of the renamed agency that
regulates offshore drilling made his first appearance before
lawmakers and pledged to end the cozy relationships some
federal inspectors have had with the oil companies they are
supposed to oversee.
 Michael Bromwich, who heads the Bureau of Ocean Energy that
replaced the troubled Minerals Management Service, said he will
establish an internal investigation team to battle misconduct
by government employees and regulated energy companies.
 Plagued by numerous scandals, the agency is being broken up
into three divisions overseeing royalty collection, energy
leasing and safety enforcement.
 (Editing by Kristin Roberts, Lisa Shumaker and Jim Marshall)


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Comments (10)
“Salazar told a Senate Appropriations subcommittee the new moratorium would be adjusted where appropriate and include criteria detailing when the drilling ban will end.”

“Adjusted where appropriate”, wow thats a real specific statement and obviously Obama will decide what is appropriate, big change there.

I see no flexibility. Why haven’t they been fast tracking inspecting the Rigs to determine which one’s meet safety requirements and which, if any, do not?

I hope the Federal Courts stand firm and rule in favor of the people that need these jobs, the States that rely on the royalties. He can’t stop the drilling by other countries further off our shores. He plans to invest or lend or give millions to Brazil for their deepwater drilling program. Who’s side is this Administration on? Not the American People’s that is for sure.

Jun 23, 2010 1:41pm EDT  --  Report as abuse
“Salazar told a Senate Appropriations subcommittee the new moratorium would be adjusted where appropriate and include criteria detailing when the drilling ban will end.”

“Adjusted where appropriate”, wow thats a real specific statement and obviously Obama will decide what is appropriate, big change there.

I see no flexibility. Why haven’t they been fast tracking inspecting the Rigs to determine which one’s meet safety requirements and which, if any, do not?

I hope the Federal Courts stand firm and rule in favor of the people that need these jobs, the States that rely on the royalties. He can’t stop the drilling by other countries further off our shores. He plans to invest or lend or give millions to Brazil for their deepwater drilling program. Who’s side is this Administration on? Not the American People’s that is for sure.

Jun 23, 2010 1:52pm EDT  --  Report as abuse
MikeS651 wrote:
Hope they takem back to court and they lose again.

Jun 23, 2010 2:06pm EDT  --  Report as abuse
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