Safety fears forced US ban on oil drilling


23/8/10; The Australian; No Internet Text, The Wall Street Journal; (2 Items)

Senior Obama administration officials concluded the moratorium on deepwater oil drilling would cost 23,000 jobs, but went ahead with the ban because they did not trust the industry’s safety equipment and the US government’s own inspection process, documents reveal. Critics of the moratorium, including Gulf Coast political figures and oil industry leaders, have said it is crippling the region’s economy, and some have called on the administration to make public its economic analysis.

A federal judge who in June threw out an earlier six-month moratorium faulted the administration for playing down the economic effects. After his action, administration officials considered alternatives and weighed the economic costs, the newly released documents show.

The Justice Department filed them in a New Orleans court this week, in response to the latest litigation over the moratorium. Spanning more than 27,000 pages, they provide an unusually detailed look at the debate about how to respond to legal and political opposition to the moratorium.

They show the new top regulator of offshore oil exploration, Michael Bromwich, told Interior Secretary Ken Salazar that a six-month deepwater-drilling halt would result in “lost direct employment” affecting approximately 9450 workers and “lost jobs from indirect and induced effects” affecting 13,797 more. The July 10 memo cited an analysis by Mr Bromwich’s agency that assumed direct employment on affected rigs would “resume normally once the rigs resume operations”.

Asked to comment, a White House spokesman said the administration “well understood, and understands, the enormous importance of oil and gas to the region’s economy”, but the potential economic risks from another spill to other elements of the gulf economy — such as fishing and tourism — also informed the administration’s deliberations, “especially as spill-response resources were fully engaged to address the BP Deepwater Horizon spill”. An American Petroleum Instiute spokesman said the documents show “the government itself understood there would be significant impacts felt throughout the region.”

The newly released document trove shows that a top science adviser at the Interior department worried in late June that BP, primary owner of the blown-out well, had an “unrealistically optimistic” corporate culture. After working with BP in Houston on spill response, US Geological Survey director Marcia McNutt told Mr Bromwich that BP officials “seem to hope for the best and plan for the best”.

In another document, William Hauser, chief of the regulations and standards branch of what was formerly called the Minerals Management Service, outlined the risks of drilling activities in an email to colleagues and then wrote: “The more I write this stuff the more I believe we can/should/ could regulate/stop activities through a prudent management process versus a moratoria scheme.”

He added: “I guess the moratoria approach is necessary because the MMS cannot be trusted to regulate.”

The administration has said in court filings that the economic effect of suspended drilling was not as severe as the industry asserted.

Meanwhile, BP said it has begun an attempt to remove the drilling pipe from the ruptured well that unleashed the Deepwater Horizon spill.The attempt follows the completion of a 48-hour ambient pressure test, in which the company determined that if the sealing cap and the blowout preventer that sit atop of the well are removed, no oil or gas would come out.

Underwater Oil Belies All-clear Call For Gulf

21/8/10; The Australian

Scientists have heaped more criticism on the Obama administration’s claim that most of the Gulf of Mexico oil spill is gone. This is after the discovery of an oily underwater cloud 35km long, 2km wide and 200m deep. The growing doubts came as US authorities said that crews would not completely seal the well until September, more than a month after plugging the site that triggered the world’s worst maritime oil spill. Most of the 4.1 million barrels of spilled oil remained in the environment even if it was not visible, posing unknown consequences for sea life and the thousands of gulf residents whose livelihoods depended on fishing, scientists said yesterday. They accused the Obama administration of painting a rosy picture while revealing only a portion of the data on which government experts based their analysis, released two weeks ago.