Gulf permitting rates nearing pre-spill levels

In recent months, permitting in the Gulf of Mexico has become closer to normal, approaching levels prior to the 2010 Deepwater Horizon oil spill, according to a report from Greater New Orleans Inc.

“We’re beginning to see lumpy but steady improvement,” said Michael Hecht, president of the regional economic development group that created the report using public data from the Department of the Interior.

The average permitting rate during the year prior to the spill was six permits per month, and the average for the three years preceding the spill (half of which occurred prior to the recession) was seven per month.

After the ban on deepwater drilling, which ended in October 2010, the rate of permitting didn’t begin to pick up in earnest until June 2011.

But in October 2011, federal officials granted 10 new permits for new deepwater wells in the gulf, surpassing the average pre-moratorium rate for the first time since the spill.

From November through January, the federal government granted three permits per month, but in February, the rate spiked, with 22 permits. Permits issued in March dipped back down to slightly below the pre-spill average of six permits per month.

Greater New Orleans researchers attribute the spike to “batch set” permitting, where the government grants the go-ahead for several related permits at once to the same company.

According to the Bureau of Safety and Environmental Enforcement website, 13 of the February permits were granted to Chevron on the same day. Shell Oil accounted for seven of the month’s permits, but those were issued on three different days.

The report also indicates that shallow water permitting rates have been at or above pre-spill levels since January. In January and March, the government was in stride with its rate one year prior to the moratorium, with seven permits per month. In February, it granted 10.

Hecht said both the rate of permitting and the amount of time it takes to get a permit is increasing, but the pace of progress has been slower than expected.

“I was surprised by the length of time it has taken to return to normal, considering how important energy is for the nation’s economy and security, and you have a willing industry wanting to get back to work,” he said. “The other surprise is that shallow water exploration has been affected by this, when deepwater and shallow water are as different as space travel and flying in an airplane.”

He added that the amount of time associated with permitting is still high and expressed concern that federal regulators don’t have the resources they need to speed along the process.

A spokesperson with the Bureau of Safety and Environmental Enforcement said the department is not trying to reach an imaginary quota, but that the pace of permitting is nearly at pre-spill levels. He added that applications must meet new requirements and each application is scrutinized carefully. He added that the bureau is trying to improve the permit review system, educate the industry and stress safety.‬

From 2006-2010, it took permitting plans an average of 61 days to get approved. In 2011, after the moratorium was lifted, they averaged 109 days. In January, permits that were approved had been waiting an average of 92 days. In February, they’d been in queue for 106 days, and in March, they’d been waiting for 107. The February average among the 32 permits was dramatically increased by one which had been waiting for 837 days. Setting aside that anomaly, permits that month had been waiting for 61 days, reaching pre-spill historical averages.