Interior says Atlantic offshore drilling tests could begin this year

The Obama administration could allow companies to begin surveying the Atlantic for oil and gas development by the end of the year.

A top official at the Interior Department told Congress on Friday that the agency has received a handful of applications from companies requesting to conduct seismic testing in the Atlantic, to determine where drilling might be feasible and what impact it could have on the environment.

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Drilling would begin no earlier than 2017.

“It's possible, depending on what the contractor wants to do, that the first survey could be as early as later this year,” Tommy Beaudreau, director of the Interior Department's Bureau of Ocean Energy Management (BOEM), said during a subcommittee hearing for the House Appropriations Committee.

The Interior Department released an environmental impact statement in February that laid the foundation for testing to begin. The report established safeguards for contractors that conduct seismic testing in the Atlantic, and highlighted potential significant effects that it would have on whales, dolphins and other marine life.

While the report did not authorize seismic testing, BOEM is considering such a move, and Beaudreau said it could happen by the end of the year.

The Interior Department would review the tests to consider whether or not to allow drilling. But if the process continues without delay, the release of the environmental review would set the agency on a five-year planning process that would open up the Atlantic to drilling between 2017 and 2022.

Beaudreau said the agency has made no decisions yet about whether to allow drilling.

Democrats on the Appropriations committees remain skeptical of allowing companies to drill \ in the Atlantic.

The ranking Democrat on the subcommittee, Rep. James Moran (Va.), asked Beaudreau what safeguards the agency plans to establish to prevent spills and other disruptions to the environment.

“We're going to have to make sure there are sufficient safeguards in place before we proceed,” Moran said.

In addition to the harms it could cause for marine life, Moran expressed concerns about the disruptions spills could cause for the shipping and tourism industries, as well as military operations.

“Yeah, I've got a lot of concerns about drilling, particularly off Virginia's coast,” he said. “We have a very important tourism industry, and fishing industry, and there's a shipping channel, and we have extensive naval operations going on, and I don't want to jeopardize any of it. “

Beaudreau said BOEM is looking to establish the “most protective” set of regulations it can for any such drilling and testing activities.

Moran also expressed concerns that BOEM is delaying a rule that would increase the maximum fines for offshore drilling companies that are responsible for oil spills.

“I understand that opposition has surfaced, of course, from the industry, and that the cap adjustment may be delayed,” Moran said. “When do you expect that cap adjustment to be implemented on spill liability?”

Beaudreau said he hopes to raise the fines to a maximum of $134 million from the current $75 million by the end of the year. The fines haven't not been raised since 1990, so the changes mostly account for inflation, he said.

“We had some catch-up to do,” Beaudreau said.

Meanwhile, Republicans complained to Brian Salerno, director of the Interior Department's Bureau of Safety and Environmental Enforcement, who was also at the hearing, that the permitting process takes too long for companies that want to drill in the Gulf.

“We had companies who were complaining that they never got a permit done,” said Rep. Ken Calvert (R-Calif.), chairman of the subcommittee. The permitting process took an extraordinarily long time with permits being kicked back and forth. How is the timing on permits now?”

Salerno said his agency is speeding up the permitting process. In 2011, it took an average of 71 days from the time a company submitted an application to the time it was approved. Last year, the number of days had declined to 59.

“The number is coming down,” he said.