Hastings Urges Restarting Oil Drilling in Gulf to Stem Rising Fuel Prices

The Obama administration should resume deep-water drilling “right away” and open new areas to offshore exploration to keep oil prices from rising, said the House Republican who oversees Interior Department legislation.

“I don’t wish for higher gasoline prices,” House Natural Resources Committee Chairman Doc Hastings of Washington said in an interview in his office yesterday. “As we get into more of the tourist season, during which typically gasoline prices rise, I think the American public will push that decision.”

Hastings, 70, said he plans to question Interior Secretary Ken Salazar at a March 3 hearing about U.S. dependence on foreign oil and the risk of a loss of crude supplies amid political instability in nations such as Egypt.

Crude oil reached the highest price in more than two years during protests last month that forced out Egypt’s President Hosni Mubarak. Prices rose yesterday after Isarel’s military said two Iranian gunboats were headed to Syria through Egypt’s Suez Canal.

Drilling in the deep waters of the Gulf of Mexico, stalled after BP Plc’s April spill, should resume without waiting for regulators to approve oil and gas company containment systems to respond to a similar disaster in the future, Hastings said.

The Interior Department hasn’t approved any development plans and is seeking further information on spill-response systems.

“The most critical missing piece in the process of approving applications for permits to drill in deep-water is the demonstration of well control and subsea containment capability,” Michael R. Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, said in a letter on Feb. 4.

Containment Systems

The letter was sent to Exxon Mobil Corp.-led Marine Well Containment Corp. and Helix Energy Solutions Group Inc., which are developing separate blowout-response systems. Royal Dutch Shell Plc and Chevron Corp. are among the companies participating in the Exxon group; the Helix effort caters to smaller explorers such as Marathon Oil Corp. and Newfield Exploration Co.

Hastings said cutting spending for programs his committee oversees is a priority. Additional spending by the Bureau of Ocean Energy Management should be funded by revenue from oil company royalties on offshore leases, he said.

To contact the reporter on this story: Jim Snyder at jsnyder24@bloomberg.net; Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net.

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.