IPAA, IADC warn of extended drilling ban's impacts

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, June 1 -- Extending a drilling ban in many parts of the Gulf of Mexico could have serious economic impacts on the US Gulf Coast, officials of two oil and gas associations said separately on May 28 in response to announcements made the previous day by the Obama administration.

“The administration should not make hasty decisions and advocate legislative and regulatory initiatives that could result in severe limitations to offshore drilling in America—consequences that can further harm the Gulf Coast economy,” Independent Petroleum Association of America Chairman Bruce H. Vincent said in a statement.

“Controlling the well and protecting the environment are the main priorities today,” Vincent said, adding, “We believe the federal government, as it considers new regulations and new offshore exploration policies, should first allow the facts in this incident to be investigated.”

Meanwhile, Brian T. Petty, executive vice-president for government affairs at the International Association of Drilling Contractors, said, “The biggest problem is that they’re going to be down 6 months, which will have cascading economic effects not only for the crews on them but for the companies and people providing supplies onshore. We’re talking about an impact on the order of tens of thousands of jobs.”

There apparently are 25 rigs that actually are drilling in deep water in the gulf, Petty told OGJ. “Others which were permitted will not be able to spud. They’re en route to location or hot-stacked,” he said.

The order which US Interior Secretary Ken Salazar issued at US President Barack Obama’s direction on May 27 could have a bigger impact if drilling operations off production platforms to extend a field are included, according to the IADC official.

Comprehensive, total shutdown
“It’s a comprehensive and total shutdown of all permits involving working drilling operations and future operations in the near term,” he said. “We anticipated that new drilling permit applications would be denied for the 6 months that the president’s independent commission is working. We did not expect existing operations to be stopped dead in the water.”

Vincent noted that IPAA supports Obama’s independent commission that is investigating the Apr. 20 well blowout and explosion that destroyed the Deepwater Horizon semisubmersible rig in the gulf, killing 11 people and causing a massive ongoing oil spill.

“It is important that a thoughtful, thorough, and timely investigation and analysis is conducted to understand what caused the accident and to ensure that the proper, improved safety measures are identified and put into practice to prevent similar incidents in the future,” he said.

“The entire industry is dedicated to working together to protect the health and safety of our people, as well as the environment in which we operate as we work to contain the damage from this incident,” said Vincent, who also is president of Houston-based Swift Energy Co.

“Many of our member companies have offered supplies and services; others are directly helping with the clean-up efforts. This is certainly a time when actions speak louder than words,” Vincent maintained.

Contact Nick Snow at nicks@pennwell.com.

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