Oil Daily is reporting today that Interior Sec. Ken Salazar has lifted the moratorium on Gulf of Mexico exploration and production in shallow water.

More than 50 members of the U.S. House Representatives had urged Sec. Salazar to allow the continuation of shallow-water oil and natural gas production, saying it does not pose the same risks as deepwater production.

In shallow water, the tops of the blowout preventers (BOPs) are often above the waterline, and the wells frequently require external stimulation to draw oil and natural gas to the surface. Therefore, it is unlikely that these wells could experience problems similar to the Macondo well.

The International Association of Drilling Contractors and another group also had pressed for permission to proceed with shallow-water energy develo... more »

While BP prepares to cut the damaged riser from the blowout preventer (BOP) as the first step in using the low marine riser package (LMRP) at the Macondo well, analysts and bloggers are assessing the costs associated with the administration's deepwater drilling hiatus in the Gulf.

Last week, President Obama announced a six-month Gulf drilling permit delay, a delay of drilling in shallow water off the coast of Alaska until 2011, the cancellation of the Virginia offshore lease sale, and a halt to 33 exploratory wells already underway in the Gulf.

Those familiar with drilling operations noted that the administration's action would be another blow to Gulf Coast states already reeling from the impact of the oil spill on fishing and tourism.

The Louisiana Mid-Continent Oil & Gas Association said... more »

The engineers working on the Macondo well in the Gulf have abandoned the top kill procedure. Late yesterday afternoon, BP's Chief Operating Officer Doug Suttles announced that the top kill and the junk shot did not plug the leaking well, so they are moving to the next option--the low marine riser package, or LMRP.

The LMRP involves using ROVs to make a clean cut through the riser at the top of the blowout preventer (BOP) with a high-tech device similar to a band-saw, and then lowering a new riser fitted with a sealing grommet to the existing riser. On the surface, the Discoverer Enterprise drillship will collect the escaping oil and natural gas. Suttles told reporters yesterday that the procedure could take four days and that the equipment is on scene and is ready for deployment.

BP also... more »

The Memorial Day weekend traditionally is considered the beginning of the summer driving season, and this weekend travelers will receive a nice surprise at the pump.

API's Chief Economist John Felmy says gasoline prices have fallen 18.0 cents in the past three weeks, following a drop in crude oil prices. According to AAA, U.S. gasoline prices today average $2.749 a gallon, down from a recent peak of $2.929 on May 5.

The price of crude oil is the single largest factor in pump prices. The U.S. Energy Information Administration says crude oil accounts for about 69 percent of the pump price. Yesterday, the price of crude oil stood at $74.55 a barrel, which is significantly lower than the recent peak of $86.19 a barrel on May 3. The Philadelphia Inquirer reports crude prices have declined due t... more »

President Obama is traveling to the Gulf Coast to see the oil spill response first-hand today. His trip comes one day after he held a news conference to announce delays and cancellations in the U.S. offshore energy development program.

Here's a brief wrap-up of the president's remarks and other newsworthy items that occurred yesterday:

• President Obama halted work on 33 exploratory wells being drilled in the Gulf, delayed the drilling of five wells in offshore Alaska until 2011, cancelled lease sales planned for the western Gulf and off the coast of Virginia, and delayed all deepwater permits in the Gulf of Mexico for at least six months while a commission reviews offshore safety and operational procedures and requirements. API responded with a statement.
• Engineers pumped heavy drilling fl... more »