Interior Limits Offshore Drilling

Oil and natural gas drilling and production in federal offshore waters will be allowed to move forward only in the western and central Gulf of Mexico, the Department of Interior announced last week. The decision reverses a broad announcement by President Barack Obama last March to move forward on oil drilling in the outer continental shelf (OCS) in the Atlantic Ocean, most of the Gulf, and the Arctic Ocean. The reversal, as well as a host of new requirements, “raised the bar” for offshore drilling and is “based on lessons learned from the Deepwater Horizon oil spill,” Interior Secretary Ken Salazar said. The shift is included in the department’s five-year OCS management plan, covering 2012 through 2017. Because of the oil spill, Salazar emphasized, the department will now proceed with greater caution while creating a more stringent regulatory regime. Proposed lease sales and new drilling activity in the western and central Gulf will move forward but face much tighter scrutiny and are not likely to begin until late 2011 or 2012. Areas in the Arctic where oil companies had hoped to drill will face additional department reviews as well as public examination. One project that will receive a new examination is a controversial application to drill by Shell that was set for next summer.