http://www.chron.com/disp/story.mpl/business/energy/7292617.html
By JENNIFER A. DLOUHY Copyright 2010 Houston Chronicle
Nov. 12, 2010, 10:25PM
WASHINGTON – The future of a planned March sale of offshore drilling leases in the Gulf of Mexico is in doubt because of the federal government’s plans to first conduct a lengthy environmental study of the region.
The environmental analysis – formally announced this week – is expected to take about six months, so it probably won’t be finished before March.
Although the Bureau of Ocean Energy Management, Regulation and Enforcement has not announced any delay in the lease sale covering offshore tracts in the central Gulf of Mexico, oil industry lobbyists and analysts said it is unlikely to go forward.
Analysts at the investment bank FBR Capital Markets said the March lease sale will probably be canceled because of the study and because of the bureau’s work vetting new drilling permits and drafting new safety rules.
“The agency faces significant workload on other offshore regulation, including permitting and public comment period requirements,” the analysts said.
Mike Olsen, a lawyer with the Houston-based Bracewell & Giuliani firm who previously spent five years working for the Interior Department, said such studies typically take several months, and it would be difficult to get one done by March.
The government’s environmental impact study is designed to assess the potential impact of drilling in the Gulf of Mexico in light of the Macondo deep-water well blowout and oil spill earlier this year. The last similar study was conducted long before the April 20 blowout that destroyed the Deepwater Horizon drilling rig and killed 11 workers.
“This is a vehicle for BOEMRE, other government scientists and the public to gather and consider new information obtained and analyzed as a result of the Deepwater Horizon blowout and spill,” said Michael Bromwich, the bureau director.
Helps decision-makers
He said the fresh assessment will allow his agency “to make objective, science-based decisions about the activities involved in offshore energy exploration, development and production.”
Under the government’s current five-year plan for drilling on the outer continental shelf – which runs through June 30, 2012 – the ocean energy bureau was slated to conduct three more sales in the Gulf of Mexico, beginning with the one in March and followed by sales in the Western Gulf of Mexico later in 2011 and in the Central Gulf in early 2012.
Bromwich said in an interview Tuesday that an upcoming “filing” would shed light on the future of the sales. It was unclear when – or what – that would be.
But the government may have tipped its hand with its formal announcement of the environmental impact study, which lays the groundwork for the upcoming sales.
The notice published in the government’s Federal Register on Wednesday specifically named two of the remaining three sales – and omitted the one planned for March. To analysts and industry advocates in Washington, that signaled the March sale is off
.
Notice revised
The government swiftly revised that notice, and the announcement published a day later did not specifically name any lease sales.
Olsen said the revision gives the government more flexibility and preserves the appearance, at least, that the March sale is still on track.
jennifer.dlouhy@chron.com
__________________________________
http://www.dailycomet.com/article/20101113/ARTICLES/101119666/1212?Title=First-new-deepwater-permit-issued
Daily Comet
First new deepwater permit issued
By Kathrine Schmidt
Staff Writer
Published: Saturday, November 13, 2010 at 6:01 a.m.
Last Modified: Saturday, November 13, 2010 at 12:01 a.m.
HOUMA – Federal officials have issued the first deepwater permit since the Deepwater Horizon spill.
It’s not quite what the industry was hoping for – it’s not an entirely new well, but a water-injection well, which pumps substances into a reservoir that has already been drilled to extract additional oil and gas. But some are saying it’s a start.
The revamped Bureau of Ocean Energy Management issued the permit to BHP Billiton for a well in 4,583 feet of water on Nov. 5, according to spokeswoman Melissa Schwartz. The company will use Transocean’s Development Driller 1.
“It’s good news,” said Chett Chiasson, executive director at Port Fourchon, the Lafourche port that handles more than 90 percent of deepwater activity in the Gulf. “It’s not full-fledged new well drilling. It’s another positive step in the right direction. We’re hoping to see more of that in the coming weeks.”
That job will mean at least some additional business for Fourchon, since BHP Billiton uses a shorebase there, Chiasson said.
Still, the announcement was greeted without much enthusiasm from the industry and business advocates who have urged the federal government to speed up its issuance of permits in the aftermath of the April 20 Deepwater Horizon explosion, which killed 11 and caused the worst oil spill in the nation’s history.
Offshore oil-and-gas work has slowed substantially and drilling, an important economic driver in south Louisiana, has nearly stopped as officials implement new safety and environmental rules.
“Our initial concern is still valid. Up to 30,000 Louisiana jobs will be at risk if drilling activity does not reach a reasonable rate,” said Michael Hecht, President and CEO of GNO Inc, the New Orleans economic-development group.
Environmental groups have urged caution, and the administration has said the extra review time is necessary to make sure that emergency-response plans are in place and past safety problems are avoided.
Historically, the government has issued about four new deepwater permits per month, GNO said. In shallow water, the government historically has issued about seven new permits monthly, the group says. But in the seven months since the spill, the government has only issued 13 new well permits in shallow water.
Other permits have flowed more freely. The BOEMRE has approved more than 1,400 permits for shallow-water well construction or modification, known in the industry as workover, and 47 revised new wells.
In deepwater, there have been 24 deepwater workover permits and one sidetrack well, in which a new offshoot of a well is drilled from an existing one. Four new deepwater-well permits are awaiting approval.
While most of these permits provide oilfield-service work for area companies, new drilling provides the most.
Schwartz wouldn’t comment on when any of those new well plans would be approved.
“Hopefully we’ll see more permits coming in the coming weeks and get ourselves some sense of normalcy,” Chiasson said. “If that starts to happen, things are going to start looking up. We can begin to feel a little bit of relief and our businesses can continue what they were doing prior to the oil spill.”
Staff Writer Kathrine Schmidt can be reached at 857-2204 or Kathrine.schmidt@houmatoday.com.
Special thanks to Richard Charter