Shallow-Water Drilling Permits Rescinded

According to a June 4 report from The Wall Street Journal, federal regulators rescinded drilling permits issued on June 2 to companies for new oil and gas wells in the Gulf of Mexico, prompting market confusion and a spike in oil prices. An administration spokeswoman said the government had told companies seeking permits to drill in shallow water to wait "a day or two" until regulators issued guidelines for new permit requirements for shallow-water drilling projects. Offshore drilling in water less than 500 ft deep wasn't being banned, the spokeswoman said. The government had earlier issued a six-month moratorium on deepwater drilling. Oil prices rose Thursday, June 3, over worries that a wider government ban would result in tighter supplies. The oil and gas industry had won a victory last week when the Obama administration said new shallow-water drilling would be allowed, provided companies meet certain safety and environmental standards.

(Source: Wall Street Journal)