Government ordered to act on Gulf oil drilling permits

WASHINGTON Thu Feb 17, 2011 6:21pm EST

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WASHINGTON (Reuters) - A federal judge on Thursday ordered the Interior Department to decide in the next 30 days whether to approve five pending permits to drill in the deep waters of the Gulf of Mexico.

The permit requests from London-based Ensco Plc have been in limbo since the BP oil spill and the department's insistence that oil companies meet tough new safety requirements before they can get approval to explore for crude or natural gas in the Gulf.

The judge's order does not require the department to approve the permit requests, but only to decide their fate within a month.

The five permits in question have been sitting at the department from four to nine months. Before the BP spill, permits were processed on average in two weeks, according to the judge.

"Perhaps it is reasonable for permit applicants to wait more than two weeks in a necessarily more closely regulated environment. Delays of four months and more in the permitting process, however, are unreasonable, unacceptable and unjustified by the evidence before the court," said U.S. District Judge Martin Feldman in his ruling.

While the Interior Department lifted its deepwater drilling ban last October that had been in place for five months in response to the spill, the oil industry has accused the department of having a de facto ban still in place because no deepwater drilling permits have been approved.

The American Petroleum Institute welcomed the court's ruling.

"It's past time we got back to work in the offshore and we anxiously await permitting back at a normal pace," said Erik Milito, who heads API's upstream policies. "Every day that goes by without a permit is damaging to our economy and to the workers and citizens of the Gulf and the nation."

Many U.S. lawmakers have been critical of the department's slow place in approving drilling permits since last year's BP spill.

"The court has now clearly found that the Obama Administration's refusal to act on permits is causing irreparable harm to companies, families and people of the Gulf," said Representative Doc Hastings, who chairs the House Natural Resources Committee.

(Reporting by Tom Doggett; editing by Sofina Mirza-Reid and David Gregorio)

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