Deepwater Gas Drilling Resuming While Gas And Oil Prices Increase
Nearly a year after the BP oil leak, the first permit to resume deepwater gas drilling was given recently to Noble Energy. The British Petroleum oil leak brought on the government to bring deepwater gas drilling to a halt, but the crackdown is relenting. The decision was well-timed, as gas and gasoline prices are increasing due to political chaos in the Middle East.
First time an offshore drilling permit has been issued for a long time
The New York Times reports the first offshore drilling permit has been given by the government for the first time since Oct 2010 when the offshore drilling moratorium was lifted. The permit is a re-issue, not for a new site, for Noble Energy. This was given by the Department of the Interior. During the April 2010 Deepwater Horizon explosion and oil spill, Noble was necessary to stop operations as drilling is off the coast of Louisiana. Getting the brand new permit is great for the business. It means operations can start again. The rig drills at about 6,500 feet below the surface.
Judge claims Obama administration has to process permits
The Obama administration was ordered by a federal Judge Martin Feldman to procedure gas drilling permit applications at a faster pace. The Noble Energy permit was received a week after that. Michael Bromwich is the Bureau of Ocean Energy Management, Regulation and Enforcement Director. He said that a political agenda had nothing to do with the delay. There are six more permits pending for deepwater drilling procedures, though there have been 37 permits issued for shallow offshore drilling. Issuing a permit was good news for some companies with stakes in offshore drilling, Reuters reports. Stock in these corporations went up.
Price of gasoline mounting
Problems in the middle east has meant a rise in gas prices consistently. In the last few weeks, this has been noticed, CNN Reports. Saudi Arabia has promised that production would be made up if anything disappears even though oil prices have fluctuated. The guarantees don’t make up for concern in Libya though. Part of the problem is the protests have continued to places for instance Jordan, Yemen, Oman and Bahrain. There was a 27 cent rise in gasoline costs during February while, in just the last week, there has been a 20 cent rise. The national high of over $4.11 in July 2008 hasn’t been met yet since gasoline is at an average of $3.34 a gallon currently.
Citations
New York Times
nytimes.com/2011/03/01/business/energy-environment/01drill.html?partner=rss&emc=rss
Reuters
reuters.com/article/2011/03/01/energy-drillers-idUSN0124305420110301
CNN
money.cnn.com/2011/03/01/news/economy/gas_prices/index.htm
