Panel urged to lift U.S. oil drilling ban, new one issued

By Ayesha Rascoe

NEW ORLEANS (BestGrowthStock) – Gulf Coast lawmakers and oil industry officials on Monday argued against a moratorium on deepwater drilling on the same day the Obama administration issued a new ban on the practice in the wake of the BP Plc oil spill.

The new ban came during the first meeting of the National Commission on the BP Deepwater Horizon Spill and Offshore Drilling, the seven-person White House panel charged with making recommendations following the April 20 explosion of the Deepwater Horizon rig and subsequent leak.

Opponents of the ban urged the commission to advise the government to allow some drilling to proceed under new safety guidelines or the Gulf will suffer irreparable damage.

The worst oil spill in U.S. history prompted the Interior Department to place a six-month moratorium on U.S. deepwater exploratory drilling to give the commission time to recommend potential safety enhancements.

That moratorium was struck down by a federal court as too broad but the Interior Department issued another deepwater drilling ban on Monday that is set to last through November 30.

Despite appeals from drilling advocates, there seemed to be some uncertainty among the panel about what role it would play regarding the ban.

“The idea that we would have a near-term responsibility to recommend policy was not our understanding,” said Bill Reilly, co-chair of the panel and former head of the Environmental Protection Agency.

Reilly said Interior Department Deputy Secretary David Hayes told him the department would make a decision on the moratorium “irrespective of us.”

Earlier Bob Graham, former Florida senator and the panel’s other co-chairman, said the commission could possibly issue interim guidance on deepwater drilling before its final report is due in six months.

The panel, which President Barack Obama established with an executive order, is modeled on commissions that looked into the 1986 space shuttle Challenger explosion and the Three Mile Island nuclear accident in 1979.

Larry Dickerson, president and chief executive of Diamond Offshore Drilling Inc, told the committee a ban on deepwater drilling would be costly.

“We will have effectively given away a high-tech, high-wage industry that is U.S. dominated,” said Dickerson, whose company is the largest U.S. driller and employs more than 11,000 people in the Gulf of Mexico.

Diamond is moving two of its rigs out of the Gulf due to the drilling ban and Dickerson said he sees a “slow motion” domino effect in the industry with future projects and jobs going to workers abroad.

Jay Collins, chief executive officer of oil fields services provider Oceaneering International Inc, said his company has been hit by the moratorium and he expects the exodus of oil rigs from the Gulf to continue.

“Our analysis says five of those are likely to move out to foreign locations soon,” he said.

Louisiana Senator Mary Landrieu disputed the idea that deepwater drilling is unsafe. “This Deepwater Horizon accident is an exception and not a rule and should be treated as such,” Landrieu, a Democrat, told the panel.

(Additional reporting by Alexandria Sage; Editing by Bill Trott)

Panel urged to lift U.S. oil drilling ban, new one issued