U.S. District Court Judge Martin Feldman of the Eastern District of Louisiana has just handed the Obama Administration an order to re-open the Gulf to drilling, ruling that that “[t]he government is under a duty to act by either granting or denying a permit application within a reasonable time.” (The order is here.)
This added pressure on the Department of Interior to speed up the permit process is a result of a lawsuit that was filed by Ensco Offshore Co. against Secretary Ken Salazar. At the center of the lawsuit are five permit applications by Ensco PLC pending before Interior. Although the ruling does not ensure the agency will approve the permits, it will speed up the review process.
Even though the moratorium on offshore drilling was lifted last fall, the new permit requirements have created a de facto moratorium. Prior to the onset of the moratorium, permits were processed in two weeks. With the new requirements, the permit process has been delayed by anywhere from four to nine months. In fact, no permits have been issued since the moratorium was lifted last November.
The continued delay in drilling has had a devastating impact on the U.S. economy both in terms of job loss as well as domestic supply of energy. According to a study from the American Petroleum Institute, if the de facto moratorium continues, an estimated 125,000 jobs could be lost by 2015 and the Gulf production of about 680,000 barrels of oil could be at risk by 2019.
- Washington Examiner, “Federal judge to Salazar: Stop stalling drilling permits“
- American Petroleum Institute, “API: Industry meets final requirement for drilling to resume“
- New York Times, “Judge Tells Government to Resume Permits for Drilling”
- Wall Street Journal, “Court Tells US to Act on Drill Permits”
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