Interior Department to Comply With Order on Drilling Permits

The U.S. Interior Department said today it will follow a federal judge’s order to rule on more deep-water oil drilling permits within 30 days.

“We will comply with the court order and make the decision, up or down, on the pending permits,” Deputy Secretary David J. Hayes told the Senate Committee on Energy and Natural Resources today.

The department picked Noble Energy Inc. (NBL) to restart deep- water drilling in the Gulf of Mexico 10 months after BP Plc (BP/)’s Macondo well blowout. The Houston-based company won an exploration permit on Feb. 28.

The permit to Noble Energy will serve as a “template for others to be issued in days ahead,” Interior Secretary Ken Salazar told the Senate panel today. He said the pace of permit approvals may never return to the rate before the BP spill.

U.S. District Judge Martin Feldman on Feb. 17 ordered U.S. offshore energy regulators to act within 30 days on five permit applications filed by companies that have drilling contracts with Ensco Offshore Co., the company leading the legal challenge to the government’s offshore drilling bans.

Feldman said those permits have been delayed four months to nine months by drilling suspensions imposed by regulators after the biggest U.S. offshore oil spill. Before that, permits were typically processed within two weeks.

Judge ‘Was Wrong’

“The judge in this particular case in my view was wrong,” Salazar said at the hearing today. “I don’t think the court has the jurisdiction to basically tell the Department of Interior” what its responsibilities are.

The Noble Energy permit isn’t among the five that the judge ruled on, Kendra Barkoff, a spokeswoman for the Interior Department, told reporters in Washington today.

The department had said oil companies must show they met new standards for safety and spill control before they are allowed to resume exploration in the deep waters.

Hayes said the department will approve more permits because oil containment systems have been developed. The equipment used by Helix Energy Solutions Group Inc. (HLX) and Marine Well Containment Co. still requires a “significant amount of work,” Salazar said.

To contact the reporters on this story: Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net;

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.