Letter to Kenneth Salazar, Secretary of the Department of Interior - New Permits for Shallow Water Drilling in the Gulf of Mexico

Letter

Rep. Gene Green (D-TX) and Rep. Charles Boustany (R-LA) have again written to Department of the Interior Secretary Salazar regarding the issuance of new permits for shallow water drilling in the Gulf of Mexico. The letter, co-signed by 37 Democrats and Republicans from across the country, is the second letter that Rep. Green and Rep. Boustany have sent to Secretary Salazar reminding him of the significance of the Gulf Coast economy and urging the immediate issuance of new permits.

"Before the Deepwater Horizon disaster, new shallow water drilling permits were being issued at the rate of 10-15 per week," Rep. Green stated. "Since the shallow water moratorium was lifted on May 28, a total of 4 new permits have been issued."

In a letter to Secretary Salazar sent May 20, Reps. Green and Boustany with 54 of their colleagues warned of the potential impact of losing shallow water oil and natural gas production. Since then, 14 rigs have been idled in the Gulf which represents 30% of the shallow water fleet. If the pace of new permits does not accelerate by the end of September, over 70% of the shallow water rigs will be inactive.

"There are thousands of jobs directly connected to shallow water drilling," Rep. Green continued. "At a time when the economy is still coming back from the worst recession in recent memory, we just can't afford to lose more jobs. My colleagues and I continue to share concern over this de facto moratorium and the deepwater moratorium as domestic energy production is not only vital to energy independence, but to the Gulf Coast economy."

The lawmakers wrote:

The Honorable Kenneth L. Salazar
Secretary
U.S. Department of the Interior
1849 C Street, NW
Washington, DC 20240

Dear Mr. Secretary:

We are writing to request your urgent attention to the Bureau of Ocean Energy Management, Regulation and Enforcement's (BOEM) pace of issuance of permits for new shallow water wells in the Gulf of Mexico. While the moratorium on shallow water drilling was lifted on May 28, 2010, since that time, BOEM has only issued 4 permits for new shallow water wells. Additionally, we continue to hear from companies that the BOEM has not provided adequate guidance and information for the shallow water drilling industry to comply with new drilling application requirements imposed by NTL-06.

As a result of this pace of issuance, 14 jackup rigs have now been idled in the Gulf of Mexico, representing 30% of the shallow water fleet. Should this situation continue, we are advised that by August 30th, another 11 shallow water rigs will be taken out of service, meaning that over half of the shallow water rigs will be idle. And, even worse, absent immediate action by your Department, by the end of September, this number will grow to 32 idled rigs, or 70% of the shallow water fleet. Hundreds of jobs have already been lost. If this situation is not addressed soon, we estimate that approximately 40,000 jobs across the Gulf South are at risk.

We believe the BOEM must take immediate and effective action to provide clear guidance to its employees and the shallow water drilling industry concerning NTL-06 requirements, and it must further expedite the review and appropriate approval of applications for shallow water drilling permits in the Gulf of Mexico. Until the BOEM does so, offshore oil and gas exploration support companies throughout the Gulf Coast engaged in shallow water drilling activities will continue to be severely affected by the continuing de facto moratorium on the issuance of new offshore shallow water drilling permits. We appreciate your time and attention to this most urgent and dire situation and we look forward to working with you to resolve these issues.

Sincerely,

Gene Green
Charles W. Boustany, Jr.
Charlie Melancon
Jo Bonner
Solomon Ortiz
Anh "Joseph" Cao
Charlie Gonzalez
Kevin Brady
Chet Edwards
Steve Scalise
Mike Ross
Bill Cassidy
Ciro Rodriguez
Ron Paul
Ruben Hinojosa
Rodney Alexander
Harry Teague
Mike Rogers
Dan Boren
Spencer Bachus
Pete Olson
Ted Poe
Parker Griffith
Doc Hastings
Howard Coble
John Culberson
Ralph Hall
John Fleming
Michael McCaul
Gregg Harper
Al Green
Stephanie Herseth Sandlin
Henry Cuellar
Sam Johnson
Mac Thornberry
Michael Conaway
Kay Granger
John Shimkus
Jeb Hensarling