The 'flexible' drilling ban

Reuters:

The Department of the Interior will reissue a deepwater oil drilling ban that was blocked by a federal judge, but will make it more flexible to possibly allow drilling in certain fields, Interior Secretary Ken Salazar told lawmakers on Wednesday.

A U.S. judge ruled on Tuesday against the six-month moratorium that President Barack Obama's administration imposed on deepwater drilling after BP's massive oil spill in the Gulf of Mexico.

Salazar told a Senate Appropriations subcommittee the new moratorium would be adjusted where appropriate and include criteria detailing when the drilling ban will end. He did not provide more details on how the new moratorium would get around the judge's ruling or when it would be released.

But his suggestion that development wells on proven fields might be able to move forward would be good news for companies like Petrobras and Royal Dutch Shell, who were set to delay major projects. It would also help ease the potential impact on future oil supplies from fields that are the best new source of domestic crude.

"It might be that there are demarcations that can be made based on reservoirs where we actually do know the pressures and the risks associated with that versus those reservoirs which are exploratory in nature," Salazar said.

"We will in the weeks and months ahead take a look at how it is that the moratorium in place might be refined," he said.

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While this modification might help with some wells, the ban where it continues is still arbitrary and capricious. Salazar has no evidence that wells in other locations are going to blowout, like the BP well. In fact, history has shown that the chances for similar blowouts is remote. In the meantime, he is punishing both companies and workers who are losing money because of his unfounded fears. It is usually a mistake to take counsel of ones fears.