Obama drives up the cost of offshore drilling for oil and gas
The Interior Department issued new rules Thursday that will make it harder for the oil and gas industry to drill offshore.This will likely mean fewer offshore wells and greater concentration in shale fields within the US. Some of the larger players like Chevron have already made this move. With the low price of oil, the added cost will effect the feasibility of offshore projects.
The Bureau of Ocean Energy Management issued a notice to all federal permit holders announcing it will be changing the financial rules of the road.
It will be requiring more upfront capital to cover the risks posed by each oil and gas lessee not fulfilling its permit obligations and decommissioning wells.
Industry groups immediately gave their assessment: The new measures are an unfair "mandate," especially for independent companies.
The notice details new ways the agency will assess a lessee's ability to carry out decommissioning offshore well sites "and whether to require lessees to furnish additional financial assurance," the bureau said.