Obama Libya U.S. Offshore Drilling
Libya puts President Barack Obama in a bind on Gulf of Mexico deepwater oil drilling
US President Barack Obama faces growing calls to allow deepwater drilling in the Gulf of Mexico for the first time since last year’s spill, as oil prices break the $100 mark in the US and Americans pay more to fill up their cars.
Though The White House lifted the official moratorium on drilling last October, no new permits have so far been awarded by the Bureau of Ocean Energy Management, Regulation and Enforcement, part of the US Interior Department. Officials are insisting that the industry must be able to clearly show that it has the capacity to contain an offshore spill before it grants any permits.
On Friday, Ken Salazar, the Interior Secretary, met in Houston with Marine Well Containment, a consortium from the oil and gas industry working on containment plans.
The rapidly unfolding events in North Africa and the Middle East have given greater voice to those who want to see permits granted immediately for drilling in waters deeper than 500 metres. The calls will only grow louder if there’s any evidence of the sweeping political changes reaching Saudi Arabia, Iran and Kuwait, the three biggest oil producers in the region.
The Gulf of Mexico produces about 1.6m barrels a day (bpd), according to the latest figures from the International Energy Agency, compared with total daily US consumption of about 19m bpd. Though it appears a relatively small share, experts say its significance is heightened because the US has control over it.
“The Gulf of Mexico is not a marginal area of production for the US. If the Macondo spill had not happened, you would have seen a substantial ramp up in production over time,” said Costanza Jacazio, an oil analyst at Barclays Capital. “Right now, you’re looking at considerable uncertainty.”