White House ends moratorium on deepwater oil drilling

The Obama administration has lifted a moratorium on deepwater oil drilling that was imposed after a BP well explosion caused the worst spill in U.S. history.

Interior Secretary Ken Salazar said the government will begin reviewing permit applications immediately. White House officials said some rigs could be back at work before the end of the year, but industry analysts said there probably won't be any significant exploration before the second quarter.

"We have made and continue to make significant progress in reducing the risk associated with deep-water drilling," Interior Secretary Ken Salazar said in announcing the decision, which comes more than a month before the ban's Nov. 30 expiration date. "It is now appropriate to lift the suspension of deep-water drilling for those operators who are able to clear the higher bar that we have set."

Although Salazar said the federal government immediately will begin a review of drilling proposals, it could be weeks or months before deep-water exploration resumes.

First, energy companies must comply with just-imposed safety rules, drilling rigs need to clear government inspections, and federal regulators have to approve applications for new deep-water wells.

Administration officials said they expect some idle drilling rigs will be back to work before the end of the year, but analysts predicted that significant deep-water exploration could be on hold until the second quarter of 2011.

The moratorium applied to drilling from all floating rigs and from platforms of any kind that rely on subsea blowout preventers as the last line of defense against loss of well control. Such equipment typically is used in water more than 500 feet deep.

In lifting the moratorium, the administration is walking a political tightrope, seeking to assuage Gulf Coast voters and lawmakers worried about economic damage while also trying to avoid alienating environmentalists and offshore drilling foes three weeks before Election Day.

Environmentalists angry
It appeared the White House fell short on both counts.

Environmentalists blasted the decision as premature, because of ongoing investigations into what caused the April 20 blowout of BP's Macondo well that killed 11 rig workers and triggered the nation's worst oil spill.

And Gulf Coast lawmakers fretted that the official moratorium would be replaced by a de facto ban when drilling applications get stuck in regulatory bottlenecks.

Phil Radford, executive director of Greenpeace USA, called the administration's move "pure politics of the most cynical kind" and said the decision was motivated by "the election season - not safety and environmental concerns."

In the midterm elections Nov. 2, Democrats are at risk of losing congressional seats in Louisiana and Texas, where the moratorium has been deeply unpopular.

Oil and gas industry officials said the end of the moratorium will be purely symbolic if it isn't followed quickly by approvals for new deep-water wells.

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