Obama: Drilling ban will hurt Louisiana economy

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, June 7 -- US President Barack Obama acknowledged during a June 4 meeting in New Orleans that a 6-month deepwater drilling moratorium would have adverse economic impacts on Louisiana. The president also said he would be willing to listen sooner if engineers and scientists develop methods and procedures that would effectively prevent another deepwater well blowout and rig explosion.

“When I made the decision to issue the moratorium, we knew that that would have an economic impact,” Obama said following a meeting with parish presidents and other government and business leaders. “But what I also knew is that there was no way that we can go about business as usual when we discovered that companies like BP, who had provided assurances that they had fail-safe backup, redundant systems, in fact, not only didn't have fail-safe systems, but had no idea what to do when those fail-safe systems broke down.”

Obama’s remarks came as he began his third US Gulf Coast visit since a BP PLC deepwater well blew out on Apr. 20, killing 11 people, destroying the Deepwater Horizon semisubmersible drilling rig, and setting off a massive oil spill. US Interior Sec. Ken Salazar ordered immediate inspections of other deepwater rigs as he prepared an initial report for the president which he submitted on May 27. It recommended that drilling in water deeper than 500 ft stop until the accident and spill could be fully investigated and new regulations developed.

Obama also formed an independent commission to investigate US offshore resource development policies and regulation as well as the accident and spill, cochaired by former Florida Gov. Bob Graham and former US Environmental Protection Agency Administrator William K. Reilly.

When Louisiana Gov. Bobby Jindahl and other government officials in the state expressed concern about a deepwater drilling moratorium’s economic impact, the president said on June 4, he told them what he told Graham and Reilly “which is, if they can front-load some of the analysis of what went wrong and how you would solve what has happened and what can happen, and you can do that more quickly than 6 months, then let me know. Don't hold the results of your review for 6 months, and then tell me. Tell me when you find out.”

‘Even worse impact’
Obama said he also emphasized that he would not tolerate corners being cut or investigators taking less time than they need “to do an accurate, independent job based on sound science because I do not want to see this thing repeated…. As difficult as it may be, it’s important for us to do this right. If we don’t, you could end up seeing an even worse impact on the oil industry down here, which is so important to so many jobs.”

Obama said everyone with whom he spoke said they wanted offshore oil and gas operations to be safe and future accidents and leaks avoided. “They did ask, can we do it faster,” he said, adding, “And what I said to them was the same thing that I said to Graham and Reilly, which is, you do it as fast as it takes to do it right.”

Obama also said federal officials have been assigned “to look over BP’s shoulder” and work with state and local officials to make certain damage claims are processed promptly, fairly, “and that BP is now lawyering up.”

He said the US Coast Guard and BP each have an official working directly with every Louisiana parish president so they can quickly relay word of any problems to Incident Comm. Thad W. Allen so he can respond quickly. “And we want to set that up not just in Louisiana, but in Alabama as well as in Florida,” he said. “We want county equivalents to have that same kind of representation and rapid response.”

“I don't have a problem with BP fulfilling its legal obligations,” Obama said. “But I want BP to be very clear: They’ve got moral and legal obligations here in the gulf for the damage that has been done. And what I don't want to hear is, when they’re spending that kind of money on their shareholders and spending that kind of money on TV advertising, that they’re nickel-and-diming fishermen or small businesses here who are having a hard time.”

Contact Nick Snow at nicks@pennwell.com.

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