REPS. GENE GREEN AND CHARLES BOUSTANY SEND LETTER URGING SEC. SALAZAR TO AVOID CRIPPLING SHALLOW WATER ENERGY PRODUCTION

May 28, 2010

WASHINGTON D.C. – Representative Gene Green (D-TX) and Representative Charles Boustany, Jr., MD (R-LA) today sent a letter to Interior Secretary Ken Salazar requesting he allow for the immediate and proper processing of shallow water oil and gas production permits. Shallow water production involves less risk than deep water production because blowout preventers are above the water. At least 50 shallow water oil and gas rigs will be unable to continue their work if the moratorium is not specified to deep water production.

“While I fully support the in-depth investigation into the Deepwater Horizon spill, domestic energy resources are vital to the national security and economic growth of our country,” Rep. Green stated. “If the moratorium on shallow-water drilling permits remains in place, as many as 50 of the 57 shallow-water rigs currently operating in the Gulf will be unable to work in the very near future. If this happens, thousands of jobs, both upstream and downstream, connected to the oil and natural gas obtained by these rigs will be in jeopardy.”

“Shallow water oil and gas production differs greatly from deep water production,” said Boustany. “Secretary Salazar must not cripple the 5,000-plus jobs that rely on shallow water production, which would happen if the permitting process halts those in shallow water.”

A bipartisan group of 54 House lawmakers joined Green and Boustany in signing the letter. Green and Boustany wrote:

May 20, 2010

The Honorable Kenneth L. Salazar
Secretary
U.S. Department of the Interior
1849 C Street, N.W. – Room 6156
Washington, DC 20240

Dear Secretary Salazar:

We write today concerning the moratorium announced by the U.S. Department of Interior on May 6, 2010, which halted the issuance of any new offshore drilling permits by the Minerals Management Service (MMS) in the offshore regions of the United States. We certainly understand and support the need for an in-depth federal investigation into the causes of the Deepwater Horizon oil spill, and we look forward to working with you on legislation that appropriately guards against a similar incident ever happening again while ensuring that our domestic producers of all sizes will continue to be able to produce offshore. However, because the date for lifting the drilling permit moratorium remains uncertain, we are concerned that this uncertainty might jeopardize the ongoing long-term viability of the shallow water development of vital oil and natural gas resources.

Specifically, we are concerned that there are approximately 57 shallow water rigs currently operating in the Gulf of Mexico, and that as many as 50 of those rigs within the next six weeks will be unable to work if the moratorium is not lifted for shallow water drilling operations. Additionally, at least 5,000 direct jobs from the shallow water rigs alone would be lost in the Gulf Coast region.

Shallow water activities throughout the Gulf of Mexico have operated without major incident for decades. Deepwater operations such as those associated with the unfortunate Deepwater Horizon incident involve very different risks and challenges than those for shallow water jackup rigs and other platforms. At the outset, jackup and platform rigs in shallow water (less than 1000 feet in depth) employ “blow-out preventers” (BOPs) that are positioned above the surface of the water. These surface BOPs are accessible for regular inspection, maintenance and repair, and can be controlled directly or remotely in emergency situations. Shallow water drilling sites also involve predictable and mature reservoirs that predominantly consist of clean natural gas resources. Furthermore, a large percentage of shallow water wells require positive external stimulation to produce the flow of oil or gas, thus significantly limiting the risk of loss of control.

Therefore, we respectfully request that next week when you issue your recommendations to the President that you also recommend and allow for the immediate and proper processing and issuance of new shallow water drilling permits for the Gulf of Mexico region. Domestic energy resources are vital to the national security and economic growth of our country and our country requires the safe, effective and steady development of its offshore oil and gas resources.

We appreciate your immediate attention to this critically important matter, and please do not hesitate to contact us if we can ever be of any assistance to you.

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