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New U.S. deepwater permits expected before Q3
January 13, 2011 / 7:39 PM / 7 years ago

New U.S. deepwater permits expected before Q3

WASHINGTON (Reuters) - The U.S. offshore drilling chief on Thursday said he would be “stunned” if no new deepwater drilling permits were approved during the first half of year, as he pledged to push forward with reforms despite industry opposition.

Michael Bromwich, head of the Interior Department’s Bureau of Ocean Energy Management, pushed back at critics who say that new agency regulations will block deepwater exploration for much of the year.

He called predictions that no new deepwater exploratory permits would be issued for the Gulf of Mexico before the third quarter “unduly pessimistic.”

“I would be stunned if it took that long,” Bromwich told reporters after delivering a speech at the Center for Strategic and International Studies.

Oil firms and Republicans say rules imposed after the BP oil spill have led to permitting delays that threaten domestic oil output and the nation’s offshore drilling industry.

“Permitting on deepwater wells needs to begin as soon as possible,” said Erik Milito of the American Petroleum Institute in a statement. “While continued vigilance on safety is essential, the time has come to get back to work producing the energy the nation needs.”

No new exploratory deepwater permits have been approved since the agency lifted its drilling ban last October.

While his department is working on making sure companies are not subjected to needless delays, Bromwich said it is unlikely permitting will ever return to its pre-spill pace.

At the same time, Bromwich said his department is considering a number of options to expand enforcement for offshore drilling.

His agency is weighing raising penalties for rule violators, as well as possibly considering companies’ safety records before awarding new drilling leases.

“The current enforcement framework, which permits maximum fines of only $35,000 per day, per incident, is patently inadequate to deter violations,” Bromwich said.

Congressional action would be needed to make “more meaningful” changes to that enforcement framework, Bromwich said.

Bromwich’s comments come on the heels of the release earlier this week of the White House oil spill commission’s final report, which called for a complete overhaul of the nation’s offshore drilling regulations.

While the agency is still reviewing the commission’s report, Bromwich said many of the changes being made at the agency address concerns raised by the White House panel.

Editing by Marguerita Choy

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