Just who does the six-month moratorium stop from drilling?

(Photo of Deepwater Horizon drilling rig before the accident from Flickr and photographerTravellingSteve)

As Gulf Coast lawmakers push for an end to the 6-month moratorium on deepwater drilling, and BP sets up a $100M fund for unemployed oil workers, many are still confused about which drilling is affected by the shutdown. Is it just for new wells or is it everyone drilling in deepwater? Neither.

When Obama announced the stoppage on May 27, he made clear it was for deepwater Gulf drilling (more than 500 feet beneath the sea) and would apply to any new permits as well as the 33 rigs that were doing exploratory drilling but not yet producing.

The 591 producing deepwater wells could continue their operations.

He also postponed new drilling off Alaska for this summer and cancelled lease sales until more was known about the Deepwater Horizon accident and lessons learned from the catastrophic explosion and continuing leak.

Yet the oil and gas industry and Gulf Coast lawmakers are so concerned about the economic impact of the shutdown they want to ban the ban. Sen. Mary Landieu (D-La.) told Larry King she is worried oil companies will pull up stakes and go elsewhere in the world, even if they’ve already sunk millions into exploration here. Those companies include Chevron, Royal Dutch Shell and Australia-based BHP Billiton.

(Which reminds me: the oil is ours but the companies drilling are often multinational and based somewhere else. This whole “reduce dependence on foreign oil” thing is a crock. What they mean is Middle Eastern, Chinese or Venezuelan oil – from our “enemies.” They just don’t want to put it that way.)

Worries about lost oil jobs and income
But getting back to the moratorium. In addition to putting the oil companies on hiatus, it affects the drilling rigs owned and operated by a whole other set of companies: Transocean, Halliburton, Slumberger, etc., who are paid about a half-million dollars a day per rig. So they’ll lose income.

The American Petroleum Institute, which is the main oil and gas trade group, estimates 46,000 jobs will be lost short term. In addition to rig workers, suppliers, divers and others will be affected.

Oil and gas makes up 16% of the Louisiana economy, according to the Energy Tomorrow blog. Yet it strikes me as schizophrenic the way Gulf Coast official rail about the damage being done to their waters, coastline and businesses, then turn around and say “let’s do more of this.”

Sen. David Vitter (R-La.) and U.S. Rep. Pete Olson (R-Texas) have introduced bills in the Senate and House to end the moratorium.

And Interior Sec. Ken Salazar met yesterday with a bipartisan group of about two dozen congressmen and senators on The Hill to hear their pleas, but he gave no assurance the ban could be shortened.

Salazar said the moratorium stands unless new information indicates it should be lifted. Good for him.

Meanwhile, the commission report is due in November. Seems a long time to wait? Well the relief wells won’t be ready to stop the damn leak until late August, at best. So it's a slow process all the way around.

We need to be careful not to rush back to deepwater drilling just because of lost oil industry jobs. Some think we should never go back until the technology of fixing problems catches up with the technology of getting oil out of the ground. Too much is at stake.

And let's keep in mind that only about 5% of the deepwater rigs have been shut down (and they have not yet found oil) -- while all of the 4,515 shallow water wells in the gulf are still pumping. What is all the whining about?


(Sources: E&E Daily, Greenwire, E&E News PM, Energy Tomorrow blog)