New Gov. Order Expands Deepwater Drilling Suspension

The federal government announced Monday it is issuing a new order to suspend deepwater drilling in the Gulf of Mexico and off the coast of California until as late as November 30.

The new order expands the drilling operations to include not only the Gulf of Mexico but also rigs off California in what is called the Pacific region.

A federal judge threw out the initial six-month ban, and last week, a federal appeals panel rejected the government's request to overturn the lower court judge's decision.

Obama administration officials have repeatedly indicated their intention to reinstate the moratorium since the initial ruling.

The U.S. Department of the Interior released the following statement Monday (July 12, 2010):

Secretary of the Interior Ken Salazar (pictured) today directed the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) to issue new suspensions of deepwater drilling on the Outer Continental Shelf (OCS), saying a pause is needed to ensure that oil and gas companies first implement adequate safety measures to reduce the risks associated with deepwater drilling operations and are prepared for blowouts and oil spills.

Shallow water drilling activities that use different technologies do not present the same type or level of risks as deepwater drilling operations and can continue to move forward if operators are in compliance with all safety and environmental requirements, including new safety and environmental requirements implemented through recent Notices to Lessees. Production activities in federal waters of the Gulf are not affected by the deepwater drilling suspensions.

“More than eighty days into the BP oil spill, a pause on deepwater drilling is essential and appropriate to protect communities, coasts, and wildlife from the risks that deepwater drilling currently pose,” said Secretary Salazar. “I am basing my decision on evidence that grows every day of the industry’s inability in the deepwater to contain a catastrophic blowout, respond to an oil spill, and to operate safely.”

Secretary Salazar’s decision to impose new deepwater drilling suspensions is based on his authorities and responsibilities under the Outer Continental Shelf Lands Act (OCSLA) to ensure safe operations on the OCS. The new decision is supported by an extensive record of existing and new information indicating that allowing new deepwater drilling to commence would pose a threat of serious, irreparable, or immediate harm or damage to the marine, coastal, and human environment.

In a decision memorandum to BOEM Director Michael R. Bromwich, Salazar said that a temporary pause on deepwater drilling will provide time to implement recent safety reforms and for:

1. The submission of evidence by operators demonstrating that they have the ability to respond effectively to a potential oil spill in the Gulf, given the unprecedented commitment of available oil spill response resources that are now being dedicated to the BP oil spill;

2. The assessment of wild well intervention and blowout containment resources to determine the strategies and methods by which they can be made more readily available should another blowout occur; and

3. The collection and analysis of key evidence regarding the potential causes of the April 20, 2010 explosion and sinking of the Deepwater Horizon offshore drilling rig, including information collected by the Presidential Commission and other investigations.

In this period, the Department and BOEM will also be issuing and implementing interim safety rules in accordance with recommendations in the 30-Day Safety Report that Secretary Salazar submitted to the President on May 27, 2010.

The suspensions ordered today will last until November 30, 2010, or until such earlier time that the Secretary determines that deepwater drilling operations can proceed safely.

To help inform decisions about deepwater drilling safety reforms Secretary Salazar today also asked Director Bromwich to engage in an active public outreach effort with industry, academic experts, the public and other interested parties, and to prepare a report with recommendations on deepwater drilling.

“I remain open to modifying the new deepwater drilling suspensions based on new information,” said Secretary Salazar, “but industry must raise the bar on its practices and answer fundamental questions about deepwater safety, blowout prevention and containment, and oil spill response.”

The new suspensions apply to drilling operations that use subsea blowout preventers (BOP) or surface BOPs on floating facilities.

Like the deepwater drilling moratorium lifted by the District Court on June 22, the deepwater drilling suspensions ordered today apply to most deepwater drilling activities and could last through November 30. The suspensions ordered today, however, are the product of a new decision by the Secretary and new evidence regarding safety concerns, blowout containment shortcomings within the industry, and spill response capabilities that are strained by the BP oil spill. Moreover, the new decision by the Secretary establishes a process through which BOEM will gather and analyze new information from the public, experts, stakeholders, and the industry on safety and response issues, which could potentially provide the basis for identifying conditions for resuming certain deepwater drilling activities. In addition, the May 28 moratorium proscribed drilling based on specific water depths; the new decision does not suspend activities based on water depth, but on the basis of the drilling configurations and technologies.

Secretary Salazar’s decision memorandum on the new deepwater drilling suspensions is available here.

To view a Q and A document regarding the suspension decision, click here.