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New Offshore Drilling Guidelines Established

Last week, U.S. Interior Secretary Ken Salazar announced new offshore-drilling and workplace-safety rules. Salazar said the long-expected requirements are the first of many new regulations developed to avoid another terrible industrial accident like the BP offshore oil spill.

Due to a government-imposed deepwater-drilling moratorium, the oil-services industry has been at a standstill, laying off workers while waiting for the regulations that will allow them to resume drilling.

Although Salazar said he realized that there will always be risks associated with deepwater drilling, he vowed that the ban will not be lifted until he is comfortable that the risks have been "significantly reduced."

The rules for drilling-safety provide standards for each stage of well drilling. These rules are effectively immediately and will bring an end to the industry being allowed to determine its own design. The workplace-safety rules require oil companies to adopt procedures that will keep their workers safe. The companies' safety systems will be examined by an outside auditor to ensure safety. The workplace-safety rules will be adjusted in the coming weeks.

The oil industry is frustrated that no date was given for when the drilling moratorium would be lifted. Environmentalists, however, argue that the next step is to secure approval for additional funding to provide oversight. Last week, Congress approved $25 million for greater oversight of offshore drilling, which was much less than the $100 million in funding requested by the Obama administration.

Environmentalists want these regulations put into law, citing concerns that future administrations might cozy up to the oil industry. For now, however, environmentalists are focused on ensuring that drilling will not resume until strict safety regulations are finalized.

Source: The Wall Street Journal "2nd UPDATE: Interior Secretary Announces Drilling Safety Rules" 9/30/10

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