Interior hits back at oil industry over deepwater permits

The Interior Department struck back Tuesday against oil-and-gas industry claims that federal officials are dragging their feet in the resumption of deepwater drilling permits, alleging instead that delays stem from the industry’s lack of preparation.

Interior’s Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) has not issued deepwater permits since last year’s BP spill, even though the formal moratorium was lifted in October.

“The main reason that BOEMRE has not yet issued a deepwater drilling permit for activity suspended under the moratorium is because not a single operator has demonstrated in a permit application that it has access to and can deploy containment resources to deal with a deepwater blowout and spill,” said BOEMRE spokeswoman Melissa Schwartz in a statement Tuesday.

Helix Energy Solutions Group has developed deepwater containment systems to address potential future spills, and the Marine Well Containment Company — which is a nonprofit consortium of big oil companies including Exxon and Shell — is developing a rapid-response containment system as well.

But Schwartz noted that deepwater drilling companies have yet to blend such plans into their permit requests.

“Both MWCC and Helix have discussed the development of their systems over the past several months, but so far no operators have incorporated elements of either system in connection with a permit application. Before BOEMRE can approve deepwater drilling permits, operators must make that showing,” she said.

Her comment follows the American Petroleum Institute’s release Tuesday of a report alleging that continued delays jeopardize long-term energy production and billions of dollars in investment. The industry consulting firm Wood Mackenzie modeled delays that ultimately postpone field start-ups by 1-2 years and delay drilling times by 10-20 percent.

The study concludes that delays in drilling for oil and natural gas could put much as 680,000 barrels of oil-equivalent per day at risk in 2019, and jeopardize tens of billions of dollars in investments in the 2011-2020 period, not to mention jeopardizing billions of dollars in federal revenues that stem from development.

BOEMRE Director Michael Bromwich said this month that he expects permitting to resume in the first half of this year, but didn’t provide specifics.