- A battle royal is in the making, gripping the energy world.
- While the global wheelers and dealers are in Toronto at the moment — attending the G20 summit — the Gulf of Mexico oil spill continues to be on the minds of many — not least Barack Obama.
Obama is determined to stamp his authority. Two events last week — the firing of Gen. Stanley McChrystal and the picking up of an argument with the judge Martin Feldman, a US district court judge in New Orleans who lifted the moratorium, was enough to show the strategy in Washington.
Now indeed the firing of the top US military commander in Afghanistan by Obama after he criticized leading administration officials is not for mortals like us to comment on, ponder and discuss — not my ball game. But indeed the other is and remains an issue of immense professional interest.
Louisiana-based Feldman ruled earlier in the week that the federal government’s six-month blanket moratorium in the Gulf was unjustified because it assumed that all deepwater drilling was as dangerous as BP’s.
“An invalid agency decision to suspend drilling of wells in depths of over 500 feet simply cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country,” Feldman said in his ruling. He insisted in his ruling that the Interior Department failed to provide adequate reasoning for the moratorium.
The White House later said it would seek an immediate injunction against the ruling. “Continuing drilling at these depths without knowing what happened does not make sense,” said US spokesman Robert Gibbs.
Interior Secretary Ken Salazar immediately insisted he would issue a new order imposing a moratorium that would contain information that makes it clear why the six-month drilling pause is necessary. It was almost picking a fight with the judge.
And the judge responded. On Thursday he dealt another blow to the White House, rejecting its application to put a hold on his decision. Feldman said in a two-page order that his initial ruling gave adequate reasoning for imposing an injunction on the six-month moratorium, instituted by Washington in the wake of the BP oil spill.
And in the meantime, despite the setbacks, industry seems to be rallying behind beleaguered BP. After weeks of suffering the ire of the White House over the Louisiana rig spill, the oil industry is fighting back. Rallying around BP at a major oil conference, industry leaders pressed President Obama to lift the six-month ban on deepwater drilling he ordered after the gulf oil spill. Deepwater drilling is expensive, risky and largely uncharted, but the industry contends that it is necessary in a world where land and shallow-water oil supplies are running out.
Jay Pryor, Chevron’s global vice president for business development, told delegates at the World National Oil Companies Congress in London that the moratorium would “constrain supplies for world energy” and “be a step back for energy security.” When asked whether Chevron would have been as reckless, Pryor said no oil company can reduce the risk to zero. “There’s always going to be that one chance in 10 million there’s an accident. Just like the nuclear and airline industries,” he said.
“There are things the administration could implement today that would allow the industry to go back to work tomorrow without an arbitrary six-month time limit,” Steven Newman, president and chief executive of Transocean Ltd., told reporters. “Obviously, we are concerned.”
Steve Westwell, the BP chief of staff, who had to stand in at the last moment due to his CEO’s decision to skip the summit, said that although regulations will change as a result of his company’s blown well in the Gulf of Mexico, “The world does need the oil and the energy that is going to have to come from deep-water production going forward.”
Tony Hayward, the BP chief executive, decided to cancel his appearance at the London oil conference, citing his commitment to the relief effort in the Gulf of Mexico. The announcement follows criticism of Hayward’s weekend outing to the Isle of Wight to see his boat compete in a high-profile round the island yacht race, a move that caused outrage across the Gulf states and an acerbic response from the White House.
A cat and mouse game seems on, with both, the industry and White House playing their cards, rather deftly, in public, rallying for the hearts and minds of the general public. And this is going to be interesting — to say the least.



