Oil drilling moratorium to be lifted soon, White House says

The Obama administration probably will act this week to lift a moratorium on deep-water oil and gas drilling, White House press secretary Robert Gibbs said.

Administration officials have held meetings in the past few days and are closing in on establishing safeguards to prevent a repeat of BP Plc’s Gulf of Mexico spill, Gibbs said. Interior Secretary Ken Salazar scheduled a 1 p.m. (EDT) conference call today to make an announcement on deep-water drilling, the agency said.

President Barack Obama halted oil and natural-gas drilling in waters deeper than 500 feet (152 meters) after BP’s Macondo well off the Louisiana coast blew out April 20, killing 11 workers and setting off the biggest U.S. oil spill. “We’re getting close to having in place something that would likely allow us to lift that moratorium,” Gibbs said at the White House. “This process I believe will wrap up very soon.”

Lifting the six-month moratorium, in place since May 27, won’t immediately lead to new drilling, said Michael Bromwich, director of the Bureau of Ocean Energy, the Interior Department unit that oversees energy production. Few drilling permits are likely to be issued in the month after the suspension is lifted as companies work to meet new requirements, Bromwich told a panel investigating the spill Sept. 28.

“The really important thing is what does the new permitting process look like,” said Michael McKenna, president of MWR Strategies, an oil-industry consulting firm in Washington. “Until the lawyers and consultants and companies get experience with the permitting process as it actually happens on the ground, things are going to go very slowly.”

Last month, Salazar said drillers must improve emergency systems and estimate the worst-case oil discharge if safeguards fail, part of a series of regulations issued in response to the spill. The moratorium may be lifted when the rules go into effect this week after they are published in the Federal Register, McKenna said.

“Rules were put in place a couple of weeks ago” that will allow the moratorium to end, Gibbs said. The rules also require companies to certify they have a containment strategy for a worst-case spill.

Industry groups and officials representing Gulf Coast states have said the drilling ban, which was set to expire Nov. 30, penalizes all companies for BP’s actions while adding to economic hardship in a region already suffering the spill’s effect on industries such as fishing and tourism.

Senator Mary Landrieu, a Louisiana Democrat, has said she will block Senate action on Obama’s nomination of Jack Lew to lead the White House budget office until the moratorium is lifted.

Transocean Ltd., owner of the Deepwater Horizon, the rig leased by BP that exploded, rose $2.04, or 3.3 percent, to $63.95 at 11:48 a.m. in New York Stock Exchange composite trading after Gibbs’s comments. Noble Corp, the world’s third- largest deep-water oil and natural-gas driller, rose 70 cents, or 2.1 percent, to $34.24.