US House passes bill to speed offshore drilling permit responses

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, May 13 -- The US House of Representative approved a bill on May 11 that would require the US Interior secretary to act on offshore drilling permit applications within 30 days. HR 1229, which was approved by 263 to 123 votes, would authorize up to two 15-day extensions if the secretary explained in writing to the applicant why the permit has been delayed or rejected.

House Natural Resources Committee Chairman Doc Hastings (R-Wash.) said following its passage that the bill would establish a firm timeline to assure that the Obama administration could not impose a moratorium through deliberate inaction. He said it also would provide 30 days, with no extension, for Interior Sec. Ken Salazar to restart Gulf of Mexico permits that were approved before he imposed a 6-month deepwater drilling moratorium on May 27, 2010.

Hastings said HR 1229 improves offshore oil and gas safety by requiring leaseholders to receive an approved permit before starting to drill, and requiring the Interior secretary to conduct a safety review of each application. It also would establish an expedited review process for legal challenges of gulf drilling permits to discourage lawsuits which could take years to resolve, Hastings said.

If it becomes law, the bill would reiterate a requirement outlined in the 2005 Energy Policy Act, which Salazar has said does not allow enough time for offshore drilling plans to be reviewed. The House passed HR 1229 after it approved HR 1230 by 266 to 149 votes on May 5. That measure would compel Interior to hold federal Outer Continental Shelf lease sales that it canceled following the 2010 Macondo well accident and oil spill. Hastings said a third bill, HR 1231, could come to a vote before the full House later in the week.

Contrast to Senate’s bill
Officials from two leading oil and gas groups applauded HR 1229’s passage. American Petroleum Institute Executive Vice-Pres. Marty Durbin said the House’s vote was a dramatic contrast to the May 10 announcement by US Senate Democrats of a bill to repeal several key federal tax deductions for the five biggest US oil companies.

“Rather than raising taxes on our industry, granting more access to our own vast resources gives us an opportunity to create hundreds of thousands of new American jobs and deliver billions more to the federal treasury,” Durbin said.

National Ocean Industries Association Pres. Randall B. Luthi said HR 1229 is important to oil and gas producers because it lays the foundation for a consistent and reliable offshore permitting process. “A statutory timeframe in which the government must decide to either approve or deny a permit to drill offshore will replace the current limbo-like waiting game with a predictable response time,” he explained.

Luthi added, “A ‘yes’ or ‘no’ answer allows companies, which range from multinational corporations with thousands of employees to family-owned ventures that provide hundreds of jobs, to make a business decision on whether or not to contract for a drilling rig, which can cost more than half a million dollars a day. In addition, it is important to note that the proposed timeframe does not short cut any environmental and safety reviews.”

Contact Nick Snow at nicks@pennwell.com.

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