A long bad day at the Dept of the Interior

[chill_wind]

The story first starts with an MMS email from MMS Regional Supervisor Michael Saucier , as reported by WAPO and multiple sources (AP, Reuters, The Hill, WSJ )

That DU/WAPO story is right here if you missed it:

MMS suspends permits for Gulf drilling regardless of water depth

Now we read in Bloomberg from the Dept of Interior spokesman that there is not a moratorium on shallow-water drilling in the new six-month moratorium, reiterating what we read on the weekend, but there is this suspension. A "pulling back" says the acting MMS director, who explains more, although not particularly well:

Bloomberg
Shallow-Water Drilling Halted Until Plans Resubmitted (Update2)
June 03, 2010, 5:26 PM EDT

By Jeff Plungis and Jim Snyder

June 3 (Bloomberg) -- The U.S. suspended shallow-water drilling in the Gulf of Mexico until oil and gas producers resubmit plans to meet revised safety and environmental rules.

The Obama administration is “pulling back” the exploration applications and requiring updated information for waters less than 500 feet deep to “ensure that new safety standards and risk considerations are incorporated,” said Bob Abbey, acting director of the Minerals Management Service, in a statement issued yesterday.

Exploration in shallow waters can proceed once new permits are approved and won’t be subject to the six-month moratorium imposed by President Barack Obama on deepwater operations after a BP Plc well exploded on April 20 in the Gulf of Mexico, administration officials said today.

“Shallow-water drilling may continue as long as oil and gas operations satisfy the environmental and safety requirements Secretary Salazar outlined in his report to the president and have exploration plans that meet those requirements,” Interior Department spokeswoman Kendra Barkoff said today in an e-mailed statement. “There is no moratorium on shallow-water drilling.”

Obama and Interior Secretary Ken Salazar announced the deepwater moratorium on May 27. The administration also delayed planned exploration in the Arctic Ocean near Alaska and canceled plans to search for oil and gas off the Virginia coast.

Rowan, Ensco

Oil and gas exploration companies fell in New York trading after the Washington Post reported that the moratorium had in effect been extended to shallow-water drilling. Houston-based Rowan Cos., a drilling contractor, fell as much as 12 percent on the New York Stock Exchange, and Ensco Plc, a London-based driller, fell as much as 7 percent. The shares erased most of the declines by the end of regular trading.

Regulators had approved yesterday a permit letting Hercules Offshore Inc. drill a well in 65 feet of water near the mouth of the Mississippi River. It was rescinded today, Jim Noe, the company’s senior vice president and general counsel, said in an interview.

“The information we are receiving right now from MMS is a little confusing,” Noe said. “At this point, we don’t fully understand what additional information will be required. We expect guidance shortly.”

more: http://www.businessweek.com/news/2010-06-03/shallow-water-drilling-halted-until-plans-resubmitted-update2-.html


So not a moratorium, but a suspension, if you're still following along. Except that weirdly yesterday there WASN"T a "suspension", for at least several companies who got permits only yesterday, only to have them rescinded today.

* JUNE 3, 2010, 7:39 P.M. ET

Shallow-Water Drilling Permits Rescinded

By STEPHEN POWER And BEN CASSELMAN

Federal regulators on Thursday rescinded drilling permits issued a day earlier to companies for new oil and gas wells in the Gulf of Mexico, according to industry officials, prompting market confusion and a spike in oil prices.

An administration spokeswoman said the government had told companies seeking permits to drill in shallow water to wait "a day or two" until regulators issued guidelines for new permit requirements for shallow-water drilling projects.

Offshore drilling in water less than 500 feet deep wasn't being banned, the spokeswoman said. The government had earlier issued a six-month moratorium on deepwater drilling.

Oil prices rose Thursday over worries that a wider government ban would result in tighter supplies. Light, sweet crude for July delivery settled up $1.75, or 2.4%, at $74.61 a barrel on the New York Mercantile Exchange, the highest settlement since May 12.

The oil and gas industry had won a victory last week when the Obama administration said new shallow-water drilling would be allowed, provided companies meet certain safety and environmental standards.

A regional office of the Interior Department's Minerals Management Service issued a drilling permit Wednesday to Bandon Oil and Gas, LP for a project off the Louisiana coast. The permit triggered an outcry from environmental groups that questioned the wisdom of allowing new drilling projects in the wake of the Gulf oil spill.

On Thursday, a regional MMS office withdrew Bandon's permit, according to two companies involved in the project.

MMS on Thursday also rescinded a permit to Phoenix Exploration Co., which had received permission a day earlier to drill a well in 65 feet of water off the coast of Mississippi, according to Hercules Offshore Inc., a company involved with the project.

(snip)

In interviews Thursday, the chief executives of Dynamic Offshore Resources LLC and Seahawk Drilling Inc. said they, too, were informed early Thursday that MMS was rescinding a permit the agency had issued less than 24 hours earlier to Bandon, a subsidiary of Dynamic Offshore Resources.

Matt McCarroll, CEO of Dynamic and Randy Stilley, CEO of Seahawk, both based in Houston, said the government agency gave no reason.

"We're getting mixed signals," Mr. Stilley said. "There's a lot of confusion, and it's not helpful for a regulatory agency to not be clear on what they're doing."

An Interior spokeswoman declined to discuss the Bandon or Phoenix permits.

more:
http://online.wsj.com/article/SB10001424052748703340904575284971180744804.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsSecond


Even with the latest moratorium on paper, Mr Salazar's MMS almost appears to still be making it up by the day as it goes...if not the hour.

[depakid]

1. It's going to get ugly over the next several months as the inner working of the agencies are exposed

I'll be surprised if Salazar lasts beyond the end of the year.

[pscot]

2. It's enough to make you wonder

if anyone is in charge.

[villager]

3. Gotta love a cattle rancher -- a resource exploiter -- in charge of protecting resources!

How very GOP!