From: Ayesha Rascoe, Reuters, WASHINGTON
Published March 3, 2011 06:21 AM

More drilling permits for Gulf in the works

The door could now be open for a "significant" number of new offshore drilling permits, Interior Secretary Ken Salazar said on Wednesday, as the administration comes under increased pressure to tackle surging world oil prices.

The Interior department on Monday issued a permit for a deepwater well co-owned by Noble Energy Inc and BP, the first such permit since a rig explosion unleashed millions of barrels of oil from BP's Macondo well into the Gulf of Mexico last year.

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"There are other deepwater 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 deepwater permits," Salazar told a Senate Energy and Natural Resources committee hearing.

After the BP oil spill, the department imposed a temporary ban on exploratory drilling at depths of more than 500 feet. While the moratorium was lifted last October, no new deepwater permits were issued until this week.

The department has faced intense criticism, as well as legal action, over the slow pace of permitting.

Still, Salazar warned that if his department does not receive the funding it has requested permitting may not speed up as much as industry would like.

"If we don't get the horsepower to be able to process permits under what is now a greater degree of scrutiny, we may never return to the pre-Macondo rate of permitting," Salazar said after the hearing.

Last month, a federal judge gave the department 30 days to decide whether to approve five other pending permits to drill in the deep waters of the Gulf of Mexico.

Although Salazar said he believes the ruling inappropriately impedes on his administrative authority, the department plans to comply with this order.

Republican lawmakers have sharply criticized the slow approvals, saying it will leave the country more vulnerable to oil price shocks down the road. Lawmakers from both parties have also been asking for a release of oil from the 727-million-barrel Strategic Petroleum Reserve.

Article continues: http://www.reuters.com/article/2011/03/03/us-usa-drilling-permits-idUSTRE7215O220110303

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