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Obama Administration Lifts Ban on Deep Water Oil Drilling

October 12, 2010 at 6:32 PM EST
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A temporary ban on deep water oil drilling has been lifted. The moratorium was put in place after the BP spill disaster in the Gulf of Mexico. Judy Woodruff talks to reporter Juliet Eilperin of the Washington Post for more.
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JUDY WOODRUFF: Now: ending the ban on deepwater drilling for oil. We start with some background.

The U.S. Department of Interior lifted the freeze on deepwater oil drilling in the Gulf of Mexico a month early. It was imposed in May, after the April 20 blowout of BP’s Deepwater Horizon well.

In a conference call today, Interior Secretary Ken Salazar said: “The policy position that we are articulating today is that we are open for business. Operators who play by the rules and clear the higher bar can be allowed to resume.”

The oil industry and Gulf Coast officials had pressed to lift the ban. They argued it cost thousands of jobs and damaged the regional economy.

But White House Press Secretary Robert Gibbs denied today that political pressure played a role. He said the decision flowed naturally out of a series of public meetings.

WHITE HOUSE PRESS SECRETARY ROBERT GIBBS: This was part of a very deliberative policy process that, quite frankly, just got done more quickly than the original timeline.

JUDY WOODRUFF: The announcement also came as a federal judge was considering a new legal challenge to the moratorium. The ban is now lifted immediately, but it could be weeks before any drilling resumes.

And we turn now to Washington Post national environmental reporter Juliet Eilperin. She’s been covering this story for the paper. Juliet, thank you for being with us.

JULIET EILPERIN, The Washington Post: Thank you.

JUDY WOODRUFF: What is the new information that the administration has that has caused them to lift this ban?

JULIET EILPERIN: The administration has a few different components that they think make them more comfortable about allowing deepwater drilling in the Gulf.

One of them is that they have imposed new safety, workplace safety, as well as drilling rules, that will basically require tougher inspections of key components, as well as more detailed elaboration by oil and gas companies about what they do in an event of a spill.

Another factor that Interior Secretary Ken Salazar outlined is the fact that one of their concerns for a long time was, they didn’t want to have other new deepwater drilling going on while they were coping with the ongoing BP blowout, on the concern that they wouldn’t be able to respond to two spills at once. And he noted that, of course, they capped the well in July and then declared it dead, you know, more than a month ago. And, so, on those grounds, they felt comfortable going forward.

JUDY WOODRUFF: So, when Interior Secretary Salazar says that he thinks they have made progress in reducing the risks, is that what he’s talking about?

JULIET EILPERIN: Well, he’s talking about a few factors. He’s primarily saying that we now are asking oil and gas companies to prove that they have more comprehensive practices in terms of their well design, their testing of the blowout preventer, what kind of casing they’re using, that this will be independently verified by a third-party inspection, and then federal regulators will also look at it, so, essentially, both the tougher requirements and a stricter enforcement system.

JUDY WOODRUFF: So, none of these things were in place before?

JULIET EILPERIN: No, there wasn’t a third-party verification of many of these key components. And, of course, they were really strapped in terms of inspectors.

They have brought in some additional inspectors, federal inspectors, from the Pacific and from Alaska, but, even today, Michael Bromwich, who heads the agency that looks over drilling, acknowledged that they don’t have as many inspectors on hand as they would like.

JUDY WOODRUFF: So, for the companies, are they saying — are they welcoming these new regulations? What are they saying about this?

JULIET EILPERIN: They are welcoming it. And they’re suggesting that they can meet the higher bar that Secretary Salazar referred to.

They’re also questioning, however, whether permitting will happen as quickly as indicated. You know, they’re basically saying that: We think we can meet these higher standards, but we’re concerned that we’re not going to get the permission to go ahead as quickly as possible, and there may be a de facto moratorium, even if the formal federal ban on deepwater drilling is lifted.

JUDY WOODRUFF: A de facto meaning because it’s going to take a long time to get this approved — approval?

JULIET EILPERIN: Exactly. Exactly. As you indicated, it certainly will be weeks before any new deepwater drilling commences in the Gulf. And, again, it looks like we’re talking about there will be some by the end of the year, but it’s entirely unclear how many federal permits for new deepwater drilling will be issued by that time.

JUDY WOODRUFF: Now, Juliet Eilperin, the administration said today — I think White House Press Secretary Robert Gibbs said they’re — they didn’t bow to political pressure.

But what sort of pressure were they under? What were they hearing from the drilling — from the companies, from the community?

JULIET EILPERIN: They were under tremendous pressure, both from local and state and federal officials who hail from the Gulf, who said this was a huge problem in terms of jobs, which obviously is something that is important, when you have a run-up to critical congressional elections in November.

They were also hearing from companies that, you know, this really is the main place we still produce oil and gas for the United States. And, so, to cut back on drilling here really means that you’re undermining what kind of domestic production we have in the United States.

So, there’s no question there were economic and political factors that forced them to move as quickly as they could. But they say today that they’re comfortable with this being open for business, as Salazar said.

JUDY WOODRUFF: And has anyone been able to quantify just what the economic impact has been, how many jobs have been put on hold because of this, and so forth?

JULIET EILPERIN: You know, there are different estimates, but I think it’s hard to provide a reliable estimate at this point, because a lot of what we hear is, you know, from the oil and gas industry.

And, so, I don’t think that there’s a number that everyone is comfortable using at this point, although it is important to note that, obviously, a lot of the workers who have been idle are — can qualify for compensation from BP.

And, so, in terms of the long-term economic loss, I think a lot of that will depend on how quickly drillers can get back to business, because, that way, they won’t be forced to, say, relocate to other parts of the world for deepwater drilling.

JUDY WOODRUFF: And what about the environmental community, Juliet? What are they saying about this?

JULIET EILPERIN: Really, they were uniformly negative about this decision. They essentially said there’s not a question of if another spill will happen, but when. And — and, essentially, there were — I don’t think there was a single environmental group I heard from who said that this was the appropriate move.

They did, some of them explicitly, such as Greenpeace, accuse the administration of catering to voters in the run-up to the November elections. And so there certainly was a question that that community wasn’t in favor of this and — and is not convinced that the precautions that are now in place are sufficient to prevent a future oil spill.

JUDY WOODRUFF: So, even these new regulations don’t assuage their concerns?

JULIET EILPERIN: It did not. Their feeling is that this — there still aren’t enough precautions in place and that, again, the entire idea of whether we should be engaging in offshore oil drilling should be something debated, not under what conditions we do so.

JUDY WOODRUFF: All right. We are going to leave it there. Juliet Eilperin with The Washington Post, thanks very much.

JULIET EILPERIN: Thank you.