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Obama administration to issue new drilling moratorium
Source: Agencies |
June 23, 2010, Wednesday
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THE Obama administration scrambled yesterday to resurrect a ban on deepwater oil drilling after a US judge declared that its six-month moratorium was too broad and arbitrary, despite the massive oil spill in the Gulf of Mexico.
"I will issue a new order in the coming days that eliminates any doubt that a moratorium is needed, appropriate, and within our authorities," US Interior Secretary Kenneth Salazar said in a statement.
Administration officials said they would mount a two-pronged attack, appealing the court ruling and issuing a new order that would support a moratorium to allow enough time to ensure other exploratory drilling was safe.
This may ensure that no deepwater drilling -- below 500 feet (152 meters) -- would be resumed while the administration wrangles with the oil drilling firms challenging the ban.
A new Reuters/Ipsos poll found most Americans still support offshore drilling, despite watching a huge slick from BP's oil spill devastate fragile wetlands and communities along the US Gulf coast.
The 64-day-old disaster has shattered investor confidence in BP, which has seen its stock price slashed in half since the start of the crisis. The British energy giant's London share price tumbled to its lowest level in 13 years yesterday.
BP, seeking to restore investor confidence and rehabilitate its image, confirmed that managing director Bob Dudley would be taking over the day-to-day response to the spill from Chief Executive Tony Hayward, who has been criticized for a series of gaffes.
After the BP well ruptured on April 20, spewing millions of gallons of crude, President Barack Obama imposed the ban on deepsea drilling while officials checked that other wells were operating safely.
A WIN FOR OIL COMPANIES
Expanding offshore drilling was among Obama's proposals to revamp US energy policy. He hoped it would generate support from Republicans for aspects of his plans to fight climate change. But he shelved that plan after the spill.
The court's ruling was a victory for offshore energy producers like BP, Chevron Corp and Royal Dutch Shell. They have been hamstrung by the ban, and are considering moving their giant oil rigs to other basins like Brazil.
Shares in oil drilling companies briefly spiked after the ruling but dipped again when the Obama administration said it would appeal. The S&P energy sector fell 1.3 percent.
BP's London-listed shares hit their lowest level since February 1997 on Tuesday, dropping more than 5 percent before coming off lows. US-listed shares closed down 2.14 percent at US$29.68. They have not traded around these levels since 1996.
The spill has dealt a severe blow to the US Gulf Coast's tourism and fishing industries and soiled large parts of a 400-mile (650 km) coastline from Louisiana to Florida.
"I will issue a new order in the coming days that eliminates any doubt that a moratorium is needed, appropriate, and within our authorities," US Interior Secretary Kenneth Salazar said in a statement.
Administration officials said they would mount a two-pronged attack, appealing the court ruling and issuing a new order that would support a moratorium to allow enough time to ensure other exploratory drilling was safe.
This may ensure that no deepwater drilling -- below 500 feet (152 meters) -- would be resumed while the administration wrangles with the oil drilling firms challenging the ban.
A new Reuters/Ipsos poll found most Americans still support offshore drilling, despite watching a huge slick from BP's oil spill devastate fragile wetlands and communities along the US Gulf coast.
The 64-day-old disaster has shattered investor confidence in BP, which has seen its stock price slashed in half since the start of the crisis. The British energy giant's London share price tumbled to its lowest level in 13 years yesterday.
BP, seeking to restore investor confidence and rehabilitate its image, confirmed that managing director Bob Dudley would be taking over the day-to-day response to the spill from Chief Executive Tony Hayward, who has been criticized for a series of gaffes.
After the BP well ruptured on April 20, spewing millions of gallons of crude, President Barack Obama imposed the ban on deepsea drilling while officials checked that other wells were operating safely.
A WIN FOR OIL COMPANIES
Expanding offshore drilling was among Obama's proposals to revamp US energy policy. He hoped it would generate support from Republicans for aspects of his plans to fight climate change. But he shelved that plan after the spill.
The court's ruling was a victory for offshore energy producers like BP, Chevron Corp and Royal Dutch Shell. They have been hamstrung by the ban, and are considering moving their giant oil rigs to other basins like Brazil.
Shares in oil drilling companies briefly spiked after the ruling but dipped again when the Obama administration said it would appeal. The S&P energy sector fell 1.3 percent.
BP's London-listed shares hit their lowest level since February 1997 on Tuesday, dropping more than 5 percent before coming off lows. US-listed shares closed down 2.14 percent at US$29.68. They have not traded around these levels since 1996.
The spill has dealt a severe blow to the US Gulf Coast's tourism and fishing industries and soiled large parts of a 400-mile (650 km) coastline from Louisiana to Florida.
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