Administration Lifts Drilling Moratorium; Landrieu Won’t Lift Hold

The Obama administration announced today that it is lifting the moratorium on deepwater drilling in the Gulf of Mexico.

But Sen. Mary Landrieu (D-LA), who has been holding the nomination of a new director for the Office of Management and Budget in protest of the moratorium, said she will not release her hold.

Interior Secretary Ken Salazar, who announced the early end to the moratorium today, said that oil companies who comply with new, stricter safety rules will be able to apply for permits.“It is now appropriate to lift the suspension on deepwater drilling for those operators who are able to clear the higher bar we have set,” he told reporters. Salazar announced the decision along with Michael Bromwich, the head of the Bureau of Ocean Energy Management, which oversees offshore drilling operations.

Landrieu, however, said it wasn’t enough, yet, for her to remove her hold on OMB nominee Jack Lew.

“Today’s decision is a good start, but it must be accompanied by an action plan to get the entire industry in the Gulf of Mexico back to work,” she said in a statement. “This means that the administration must continue to accelerate the granting of permits in shallow and deep water, and provide greater certainty about the rules and regulations industry must meet.”

“I am not going to release my hold on Jack Lew,” she went on. “When Congress reconvenes for the lame duck session next month, I will have had several weeks to evaluate if today’s lifting of the moratorium is actually putting people back to work.”

Although oil companies will have to meet a slew of new safety regulations, Salazar admitted that it will never be 100% safe to drill in the Gulf.

“The truth is, there will always be risks with deepwater drilling,” he said. “In my view, we have significantly reduced those risks.”

In order for oil and gas companies to resume drilling new wells (producing wells were not shut down by the moratorium), they must prove to the BOEM that they meet new safety requirement. Among the new hurdles, according to Bromwich: Operators must show they’re prepared to handle a blowout and worst-case leak scenario; must submit a description of the changes they’ve made; must provide a third-party physical inspection and design review of their blowout preventers; and must meet new standards for well design, casing and cementing.

“It won’t be tomorrow,” when drilling resumes, Bromwich said. “It won’t be next week.” Salazar added, however, that it will be “very soon.”

The news affects some 36 wells. According to Salazar, 18 can now begin the permit process. Another eight were stopped in the middle of the old permit process. And 10, including the two relief wells, were allowed to continue operating after the Deepwater Horizon exploded.

Bromwich said they inspected all the wells after the explosion, and will inspect them again as they apply for permits. He added they have been trying to beef up their inspection corps, posting jobs and aggressively recruiting, but do not have as many inspectors as they would like.

“We’re trying to fill slots as quickly as we can,” he said.

Late update: White House Press Secretary Robert Gibbs, in his briefing this afternoon, said the lifting of the moratorium was part of the “natural process,” and that Lew’s nomination had nothing to do with it.

Gibbs wouldn’t say whether the White House had asked Landrieu to drop the hold, but said the president believes the hold is “unwarranted and outrageous.”