It's been three months since the Deepwater Horizon accident, and finally one new offshore drilling project has been approved.

According to government data updated daily, a shallow-water project has been OK'd under both of the new Notices to Lessees and Operators (NTLs) which contain new requirements.

As many offshore companies have learned, the new strictures on offshore drilling are quite daunting. NTL No. 2010-N05 requires the Chief Executive Officers (CEOs) of offshore companies to sign a statement guaranteeing that the operator is in compliance with all regulations under the threat of criminal prosecution. NTL No. 2010-N06 requires each operator to predict the likelihood of a blowout and calculate the worst-case discharge of oil and gas into the water.

In the wake of the Deepwater Hori... more »

API President and CEO Jack Gerard told Congress today that raising the Oil Spill Liability Trust Fund cap from $75 million to $10 billion "would place about 145,000 jobs at risk."

In prepared remarks, Jack explained congressional legislation to raise the cap could force all but the very largest oil companies out of the Gulf of Mexico, adding that costs for offshore operations could increase by 25 percent.

"The impacts would be devastating...just a 10 percent increase in development costs could render seven current discoveries sub-economic, reducing production, jobs, and putting $7.6 billion in future government revenue at risk."

Jack also said API is developing recommendations for Congress and the administration on how to effectively address liability limits and financial responsibility re... more »

The Department of the Interior (DOI) late yesterday sent out a list of new safety requirements to offshore drillers as pressure mounted against the drilling moratorium.

The requirements, issued as a Notice to Lessees (NTL), requires the CEOs of offshore companies to certify they are in compliance will all regulations. In addition, the operators must provide certification from a professional engineer of all well casing and cement design requirements as well as independent third-party verification that the blowout preventer will operate properly.

API supports the goal of making offshore energy production as safe and environmentally sensitive as possible, but it encouraged the administration to reconsider the deepwater drilling moratorium. "Independent analyses have indicated the six-month mo... more »

The offshore oil and natural gas industry is in a holding pattern of sorts today, waiting for the Minerals Management Service (MMS) to issue Notices to Lessees (NTL) that will provide information about offshore energy development. Announcements from MMS offices last week caused concern when at least two drilling permits were rescinded in shallow water after the president announced a six-month moratorium on deepwater drilling.

According to information received by API, MMS could issue an NTL today specifying changes to equipment requirements in shallow water followed by additional NTLs on other aspects of offshore energy development. In the meantime, the industry is holding its breath and wondering about the impact on jobs.

The oil and natural gas industry supports 9.2 million U.S. jobs, and... more »

The response to the Gulf oil spill gained momentum yesterday both in coastal states and in Washington.

In a Senate hearing, Interior Secretary Ken Salazar warned that raising the trust fund's liability cap from $75 million to $10 billion would prevent smaller and mid-sized energy companies from operating offshore, while Majority Leader Sen. Harry Reid (D-Nev.) argued for a bill that would lift the cap entirely.

In the White House, President Obama pushed for quick action on a trust fund bill, saying:

"I am disappointed that an effort to ensure that oil companies pay fully for disasters they cause has stalled in the United States Senate on a partisan basis."

BP has stated repeatedly that it will pay all legitimate claims.

In the Gulf, the Joint Unified Command reported that a "tendril of l... more »