Shallow Water Permitting Remains at a Standstill

HOUSTON, Nov. 10, 2010 /PRNewswire-USNewswire/ -- The Shallow Water Energy Security Coalition issued the following statement today regarding comments from BOEM Director Michael Bromwich to the President's Oil Spill Commission regarding resources needed to carry out drilling reforms:

The obstacles that shallow water drillers face in conducting operations in the Gulf are greater than just a question of government resources.  It's essential that BOEM make its entire review process more efficient.  Permit applications that have been languishing for months must be rescued from limbo.  Our companies have long practiced many of the reforms that the Obama Administration proposed to regulate offshore drilling, yet only 13 new drilling permits have been issued since April, and 14 rigs have left the Gulf of Mexico during that seven months.

Yesterday's announcement by Seahawk Drilling that the company's "liquidity and operations have been adversely affected" by the "dramatic delays in the issuing of shallow water drilling permits in the U.S. Gulf of Mexico" illustrates the grave situation in the industry.  This comes on the heels of the company's announcement last week that, due to the permitting situation, it would "consider possible strategic alternatives for enhancing shareholder value," including a sale of assets, a recapitalization, or a merger.  

This is exactly what shallow water drillers have been warning regulators about.  Director Bromwich's comments yesterday that the agency faces constraints in its ability to implement offshore energy reforms without a marked increase in resources make it clear that the Obama Administration's culture of slow-walking approval for domestic energy production is gradually suffocating the industry.  The impact of the de facto moratorium in the Gulf of Mexico could scarcely be worse for companies involved in the extraction and production of natural gas in the offshore.

Permits must be issued in an efficient and timely manner, or BOEM soon won't have an industry left to regulate in the Gulf.  Shallow water rigs continue to go idle and 40,000 American jobs are in jeopardy.  It is time for the Obama Administration to consider the economic impact of its decision-making and reestablish a clear path toward America's energy security.

About the Shallow Water Energy Security Coalition

The Shallow Water Energy Security Coalition comprises a group of companies—Apache Corporation, Arena Offshore, Chevron, Delta Towing, Dynamic Offshore Resources, Energy XXI, Ensco, Hall-Houston Exploration, Hercules Offshore, Phoenix Exploration, Rowan Companies, Seahawk Drilling, W&T Offshore, and Walter Oil & Gas— that explore, develop and drill for natural gas and oil in the shallow waters of the Gulf of Mexico.  The coalition was established to enhance the understanding of shallow-water operations as policymakers develop legislative and regulatory responses to recent events. Follow us on Twitter @ShallowWaterNRG

SOURCE Shallow Water Energy Security Coalition