New Rules Slow Gulf Drilling in Shallow Water

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New federal regulations are making it harder for energy companies to drill in shallow water in the Gulf of Mexico.
A new Associated Press analysis of government data shows that since the British Petroleum oil spill, federal regulators have been granting fewer permits to drill in water less than 500 feet deep.
Likewise, companies are also filing fewer applications because they say the rules are confusing and expensive to implement. The process can cause long delays and cost overruns resulting in layoffs.
"It certainly appears there's some kind of agenda in place" to punish offshore drillers, says Kurt Hoffman, chief operating officer of Houston-based Seahawk Drilling, which provides drilling services in shallow Gulf waters.

But federal regulators insist the new rules aren't intended to be punitive, but to make drilling safer. 

"We will not approve applications until and unless they fully comply with the new requirements," Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, said Monday in a statement.

"That will not make everyone happy," he said. "But it is the right way to proceed."
Shallow water platforms produce 30 percent of the Gulf's oil and almost two-thirds of its natural gas.

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