Interior Issues Directive to Guide Safe, Six-Month Moratorium on Deepwater Drilling

Washington, DC: The U.S. Department of the Interior today issued a directive to oil and gas lessees and operators on the Outer Continental Shelf notifying them of requirements under the six month deepwater drilling moratorium that Secretary Salazar has ordered.

“The six month moratorium on deepwater drilling will provide time to implement new safety requirements and to allow the Presidential Commission to complete its work,” said Salazar. “Deepwater production from the Gulf of Mexico will continue subject to close oversight and safety requirements, but deepwater drilling operations must safely come to a halt. With the BP oil spill still growing in the Gulf, and investigations and reviews still underway, a six month pause in drilling is needed, appropriate, and prudent.”

The Moratorium Notice to Lessees and Operators (Moratorium NTL) issued today directs oil and gas lessees and operators to cease drilling new deepwater wells, including wellbore sidetrack and bypass activities; prohibits the spudding of any new deepwater wells; and puts oil and gas lessees and operators on notice that, with certain exceptions, MMS will not consider for six months drilling permits for deepwater wells and for related activities. For the purposes of the Moratorium NTL, “deepwater” means depths greater than 500 feet.

Operators that are currently drilling any well covered by the NTL must proceed at the next safe opportunity to secure the well and take all necessary steps to cease operations and temporarily abandon or close the well until they receive further guidance from the Regional Supervisor for Field Operations.

Activities necessary to support existing deepwater production may continue, but operators must obtain approval of those activities from the Department of the Interior.

The NTL issued today is based on a May 28, 2010 Memorandum from Secretary of the Interior Ken Salazar to the Director of the MMS finding that, under current conditions, deepwater drilling poses an unacceptable threat of serious and irreparable harm or damage to wildlife and the marine, coastal and human environment, as set forth in 30 C.F.R. 250.172(b). The Secretary also determined that the installation of additional safety or environmental protection equipment is necessary to prevent injury or loss of life and damage to property and the environment, as set forth in 30 C.F.R. 250.172(c).

Salazar's determination that deepwater drilling activities on new wells must cease, and that MMS will not process APDs accordingly, is based on the recommendations in the May 27, 2010 report from Secretary Salazar to President Obama, Increased Safety Measures for Energy Development on the Outer Continental Shelf.

In addition to today's NTL, Secretary Salazar again called on Congress to provide more time under the law for MMS to review exploration plans that oil and gas companies submit. Under current law, MMS is currently required to review exploration plans within 30 days and determine whether the environmental analysis conducted at several previous stages in the leasing and planning process is sufficient. In the oil spill response legislation submitted to Congress on May 12, the Obama Administration is proposing to change the 30-day congressionally-mandated deadline to a 90-day timeline that can be further extended to complete additional environmental and safety reviews, as needed. (An exploration plan does not grant a company permission to drill a new well; companies must obtain additional and separate permits to gain permission to spud a well.) The Department of the Interior, together with the Council on Environmental Quality, is also conducting a review of MMS's use of categorical exclusions.

Secretary Salazar's May 28 order, the Moratorium Notice to Lessees and Operators (Moratorium NTL), and a table of affected deepwater drilling activities, are linked.

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