First Post-Spill Offshore Oil Well Approved

High gas prices are bringing offshore oil drilling back into the spotlight.

By + More

Stemming from the instability in the Middle East, the average price for regular gasoline has risen nearly 40 cents since a month ago, from $3.12 to $3.52, according to AAA's Daily Fuel Gauge Report. Critics nationwide are blaming the president and his administration for the sticker shock they're feeling at the gas pumps. However, as oil and gas prices rise worldwide, the administration remains under pressure from both the oil industry and environmentalists about how to manage the nation's own energy resources. [See a slide show of the 10 Cities With the Lowest Gas Prices.]

Last week, the Bureau of Ocean Energy Management, Regulation, and Enforcement approved the first deepwater drilling permit since the explosion and oil spill at BP's well last April. For the oil industry, which had been complaining about the bureau's slow permitting rate following last year's drilling moratorium that ended October 12, the approval of Noble Energy's Santiago well, located 70 miles off the coast of Venice, La., marked a start in the right direction. However, environmentalists, who remain concerned about the impact of potential oil spills on the Gulf of Mexico, say there's still much rulemaking to be done. As several permits remain in queue for approval, the Department of the Interior and the Bureau of Ocean Energy Management face political and legal pressure to please both sides--pressure that only seems to rise alongside the world's oil prices.

[See a slide show of the 10 Cities With the Highest Gas Prices.]

Following news of the latest permit, offshore drilling was a central issue last week as Secretary of the Interior Ken Salazar testified on Capitol Hill about department's 2012 budget requests. He faced scrutiny from oil industry advocates, like Alaska Republican Sen. Lisa Murkowski, who want to speed up the permitting process, but he defended the moratorium and insisted that the industry only recently proved that its containment technologies were up to par with the bureau's post-spill requirements.

On February 17, Judge Martin Feldman in Louisiana attempted to speed up the permitting process by ordering the department to address five outstanding permits within 30 days. The Noble Energy well project is not one of those five. Deputy Secretary of the Interior David Hayes said that the department will follow through on the ruling by the assigned date, issuing an up or down decision on the pending permits, though Salazar hinted that he may appeal the ruling altogether. Even so, Salazar says the permits will keep coming. "There are other deep-water permits that are pending, and the ones that will go out the door will hopefully be the templates that will allow us to move forward with an additional, significant number of deep-water permits," he said at last Wednesday's Senate Energy and Natural Resources Committee hearing.

Demands for domestic oil production have grown even more urgent as unrest in the Middle East grows. "Given the deeply troubling situations in Libya, Bahrain, and Iraq, there is little, if any, patience for continued delay in bringing back our American energy production and the associated jobs," Murkowski said.

In the department's other ear, environmentalists are urging a slower process. According to Marilyn Heiman, director of the Offshore Energy Reform Project at the Pew Environment Group, environmentalists are mostly pleased with the "careful" pace that Interior has taken so far, but would like to see more permanent, standardized spill-response regulations created for all wells before more permits are approved.