Lawmakers, federal officials debate offshore permit rate

Lawmakers and federal officials continued Thursday to debate how to boost the rate of offshore drilling permit approvals in the Gulf of Mexico and whether additional funding for new hires for the U.S. offshore safety agency could create a speedier application process.

The Interior Department’s Bureau of Safety and Environmental Enforcement is seeking $25 million more in the 2013 fiscal year to fund more inspectors, engineers and scientists to thoroughly review scientific information and timely review permit applications, BSEE Director James Watson told a House Natural Resources Committee subpanel.

Some analysts argue the government needs additional funding to speed up its rate of permit approvals to maintain or boost rig counts, even though some improvements already have occurred. The agency improved the time to approve permits by roughly one-third in 2011, officials said.

With a growing national debate and more attention paid to budget spending, Republican lawmakers have expressed skepticism about granting the agency’s request for additional funding.

“I want to know that these agencies will use their taxpayer dollars efficiently to tackle these challenges,” Rep. Doug Lamborn, R-Colo. said.

The debate over funding comes as Republicans have hammered the Obama administration for a slower rate of permit approvals since the Deepwater Horizon oil spill. GOP leaders contend the slow rate of permits is just one example of the Obama administration’s policies that they say have hampered U.S. oil and gas production.

Industry representatives said today that they continued to feel the impact of the slowdown in permit approvals and resulting falloff in drilling brought on by the deep-water moratorium imposed after the Macondo oil spill.

“The permit slowdown has been devastating to our economy,” said Jim Adams, president and CEO of the New Orleans-based Offshore Marine Service Association, the U.S. trade group for vessels that serve the offshore-energy sector. “Plans and permits must be approved in an efficient manner.”

Republican lawmakers have said the administration has dragged its feet on permit approvals for the Gulf, and lawmakers have pushed legislation that would mandate faster offshore permit approvals. Environmental groups have expressed concerned about a speedier permit process over concerns about offshore drilling safety.

Some analysts have said the slowdown in permit approvals was more a matter of funding and resources to handle the additional burdens of application review brought on by tougher safety requirements.

“We have continually argued that the lack of permits was due more to predictable bureaucratic manpower constraints than a coordinated policy decision,” said Benjamin Salisbury, senior energy policy analyst with the consulting firm FBR Capital Markets.

Brady Como, executive vice president with Louisiana-based Delmar Systems Inc., urged lawmakers to give the environmental safety bureau enough funding to fulfill its duties. He also asked Congress to ensure any additional money is spent wisely to ensure the rate of permit approvals does, in fact, improve.

“With increased funding comes increased expectations,” Como said.

Watson said Wednesday that he “will not rush permits out the door” because applications must be reviewed carefully to ensure companies are meeting tougher safety standards imposed since the oil spill and can effectively respond in a worst-case scenario.

“Those who believe that the pace of permitting should automatically be the same as before the Deepwater Horizon are ignoring the lessons of that disaster,” Watson said.

Watson said he has found and would continue to find ways to making the permitting process more efficient. He noted Thursday his agency approved permits for 22 unique offshore wells in the Gulf in February.

Salisbury warned the rate may need to speed up even more to create a backlog of approved permits needed to maintain or boost rig counts.

Like other industry leaders, Adams expressed continued desire for improvement in the rate of approvals.

“There is absolutely no reason to believe in this country that slower permitting is necessarily a safer operation in the Gulf,” Adams said. “We can do both. We can be fully productive in this country and be absolutely safe.”

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About The Author

Puneet Kollipara covers politics and the energy business from the Washington, D.C., bureau of the Houston Chronicle and Hearst. He holds a bachelor's degree in economics and physics from Washington University in St. Louis. Follow him on Twitter: @pkollipara