Landrieu backs down in offshore drilling fight with White House

Sen. Mary Landrieu ended her two-month blockade of President Barack Obama’s pick to be the White House budget director on Thursday, after federal regulators assured her they would make new offshore drilling requirements clear for the oil and gas industry.

Landrieu, D-La., had been blocking a swift confirmation vote on the Office of Management and Budget director nominee, Jack Lew, for months in protest of the administration’s deep-water drilling ban and a slowdown in permitting shallower projects that some critics have called a “de facto moratorium.” The Senate confirmed Lew by a voice vote Thursday evening.

Landrieu did not back down from her stance even after the Interior Department lifted the moratorium in October — although the position exposed her to fierce criticism from White House press secretary Robert Gibbs and irked her Democratic colleagues in Washington. Still, Landrieu’s maneuver was politically popular with oil and gas industry leaders and workers in her home state.

Landrieu said in a statement she was relinquishing the fight because she had gotten “a commitment from Interior Secretary Ken Salazar to provide certainty and regulatory clarity to an industry that has operated in the dark for months with shifting rules.”

As part of the deal, Salazar will visit Louisiana on Monday “to meet with industry and express the administration’s support for the oil and gas industry,” Landrieu said. “He will outline the path forward so that permits will be issued and the people of Louisiana can get back to work in this vital industry.”

It was unclear how Salazar’s presentation would be any different from what he and federal regulators have been saying for months. Michael Bromwich, the director of the Bureau of Ocean Energy Management, Regulation and Enforcement, has repeatedly said his agency is working with industry to provide more clarity about what is required in drilling permits.

Landrieu’s hold on Lew slowed down his confirmation by blocking it from happening unanimously “without objection” on the Senate floor. But Landrieu’s hold would not have blocked it entirely. Senate leaders could have called for a procedural vote on the nomination that would have limited debate and forced a final confirmation vote.

In a speech on the Senate floor, Landrieu seemed to cast herself as a deal-maker. “I have had three meetings in the last 24 hours with the secretary himself,” Landrieu said. “We have talked through some of these issues in a way that I think we can make progress.”

Permits have been issued recently and more could be coming soon, Landrieu added. “The stakes are very high, which is why I took the action I did,” Landrieu said, but now, “notable progress has been made. Permits have been issued.”

Since new drilling safety requirements were imposed in June, the Bureau of Ocean Energy Management, Regulation and Enforcement has approved 15 new shallow-water wells. Six of those approvals were delivered in October; two of them were issued this month.

No new deep-water wells — which would have been barred under the ban — have been approved since the moratorium was lifted, though the government has returned one such application to the operator for more information.

Bromwich has promised regulators will move “expeditiously” to process drilling applications, but he said they will not compromise safety for speed. The Obama administration also has asked Congress to give the ocean energy bureau $100 million to buy new equipment and hire new employees that could help vet permit applications.

“The Department of the Interior remains committed to ensuring that oil and gas production proceeds safely and responsibly,” said Interior Department spokeswoman Kendra Barkoff. The ocean energy bureau “will continue to work as expeditiously as is safely possible to review drilling permits under new and existing rules and regulations.”

Jim Noe, executive director of the Shallow Water Energy Security Coalition, and vice president of Houston-based Hercules Offshore, praised Landrieu’s blockade and what he termed her “steadfast support.”

“Her forthright action certainly got the attention of the White House and ensured that our voices were heard,” Noe said. But, he added, “further challenges lie ahead. We need permit approvals to return to normal levels for this de facto drilling moratorium to come to an end.”

The president of the American Petroleum Industry, Jack Gerard, also weighed in:

“We applaud Senator Landrieu’s resolve in standing up for her constituents, a commitment that lifted the spirits of the millions of Americans across the country whose jobs rely on oil and natural gas exploration and production. We share her concern and frustration about the harmful effect the drilling ban was having on jobs and the economy.”

A copy of Landrieu’s floor speech is after the jump.

Here’s Landrieu’s floor speech (from the Congressional Record):

Mr. President, I thank the majority leader. His day has been much busier than mine, but both of our days have been filled with quite a few matters before us.

The vote that will take place in the Senate would not have taken place without my acquiescence. I thought it was important to speak briefly on my hold on Jack Lew.

Jack Lew is a terrific nominee, and he has the support of many people in this body for his new position, and we are grateful to him for wanting to be the budget director for a country that has serious economic challenges. We are very grateful.

As you know, we have extremely serious economic challenges right now in the Gulf of Mexico. It has been 5 years since Katrina. Three weeks later, we had Rita, and then Gustav and Ike—four of the toughest storms the gulf coast has faced. Then a few years later, we had an oil spill, with more than 5 million barrels of oil spilled in the gulf, which was bad enough. But then this administration placed a hold—or a moratorium, if you will—on an entire industry because of that accident. It was a horrible accident, but I think to place a moratorium on an entire industry because one company and its contractors made some serious and terrible mistakes is really unprecedented, it is unwise, and it is extremely harmful to the gulf coast.

I tried many things over the last several months to call attention to this matter. I called several hearings in Louisiana, several hearings here in Washington, and I sent several letters, set up several meetings, and nothing seemed to be getting through to this administration about the catastrophe they were causing along the gulf coast. So I put this hold on a nominee. It was, in many ways, unprecedented. I didn’t know that when I did it. I was told later that it had never been done on a budget director. I figured it would get their attention, and I think it has.

I have had three meetings in the last 24 hours with the Secretary himself. We have talked through some of these issues in a way that I think we can make progress. In the last week, there have been two permits issued. I am told there will be additional permits issued in the next few days. The Secretary has also committed to me that he himself will be in the gulf coast—in Louisiana, actually—on Monday, expressing his commitment, and in no uncertain terms, to the future robustness of this industry.

Mr. President, this isn’t just about Louisiana and the importance to Louisiana. I will submit this report for the Record, “The Economic Impact of the Gulf of Mexico Offshore Oil and Natural Gas Industry and the Role of the Independents,” released in July of 2010. I will read only one figure, but it is big enough that it should capture people’s attention. People are looking for money in this Chamber to solve our budget issues and bring this budget into balance. One figure I will cite from this report is that the independents—not big oil—I am not talking about Chevron, Shell, or BP; I am talking about independent oil and gas operators that are sidelined because of this policy by the administration—independents will bring in more than $147 billion in Federal, State, and local revenue in the next 10 years. So the stakes are very high, which is why I took the action I did and why today I have released the hold, because notable progress has been made, permits have been issued, and the Secretary has committed, on Monday, to be in the State to give a path forward for this industry.

I am convinced that, at this moment, that was the right thing to do for the country and the gulf coast. But we have more progress that needs to be made. This industry is a valuable, critical, important industry to this Nation. It has been for over 100 years, and it will be for the next 100 years. We have to realize the importance of producing oil and gas here at home. Yes, it was a terrible accident. Yes, we need to have safety and rules and regulations that are in force. But there has to be a way to accomplish that without shutting down the entire industry and putting hundreds of thousands of jobs at risk. Again, this isn’t about big oil specifically; it is about contractors and small businesses all along the gulf coast and throughout the United States.

I appreciate the Secretary’s commitment, his renewed focus, and his understanding of the urgency of the situation. I thank my colleagues, many of whom were supportive of this action, as we have worked through these last 6 weeks. I appreciate the courtesy of the majority leader.

I ask unanimous consent to have printed in the Record “How Big an Impact?” from the study “The Economic Impact of the Gulf of Mexico Offshore Oil and Natural Gas Industry and the Role of the Independents” done by IHS Global Insight (USA), Inc., dated July 21, 2010.