The Obama administration, facing rising anger on the Gulf Coast over the loss of jobs and income from a drilling moratorium, said Monday that it would move quickly to release new safety requirements that would allow the reopening of offshore oil and gas exploration in shallow waters.
Gulf Coast residents, political leaders and industry officials said delays in releasing the new rules, along with the administration's six-month halt on deepwater drilling—both issued amid public pressure—threatened thousands of jobs.
Well-owner BP PLC, meanwhile, faces penalties "in the many billions of dollars," for the Deepwater Horizon drilling disaster that has been spewing an estimated minimum 12,000 to 19,000 barrels of oil a day into the Gulf, said White House Press Secretary Robert Gibbs. The costs of the spill will "greatly exceed" the amount BP could recoup by selling any of the captured oil on the market, he said Monday.
Retired U.S. Coast Guard Admiral Thad Allen, who heads the federal response, said BP's latest emergency containment system is on track to capture as much as 15,000 barrels of oil per day, which is the maximum amount of oil the drill ship on the surface can process. BP's latest update on the rate of recovery late Monday implies that the containment procedure is approaching that limit. Any leakage beyond 15,000 barrels per day will continue to go into the sea until a second ship arrives, likely in mid-June.
The oil industry is awaiting new safety regulations from the Interior Department's Minerals Management Service, which canceled some offshore drilling permits last week and has had others on hold since early May. Administration officials say new rules for shallow water oil and gas drilling could be released as soon as Tuesday.
The White House also said Monday that it supported lifting the cap on liability damages altogether for any oil companies drilling offshore. The cap is $75 million unless the government can show criminal negligence.
Some Republicans and industry groups have cautioned that putting the liability cap too high could make it tough for smaller companies to drill offshore.