OFFSHORE DRILLING:
Obama admin says new safety rules may delay drilling, raise gas prices
Katie Howell, E&E reporter
Greenwire: Friday, October 8, 2010
The Obama administration is acknowledging that its new offshore drilling safety regulations will raise costs for the oil and gas industry -- and may also delay some offshore development, slightly increase gas prices and kill some jobs.
The new rules unveiled last week would increase operating costs by an estimated $1.42 million for each new deepwater well drilled with a floating rig, $170,000 for each new deepwater well drilled with a platform rig and $90,000 for each new shallow-water well, according to an Interior Department notice released yesterday.
Interior says the cost of compliance with the new rules is "not an insignificant amount" but would add on less than 2 percent of the cost of drilling a well in deep water and 1 percent for shallow-water wells. Typical deepwater wells drilled with floating platforms usually cost about $90 million to $100 million, Interior says in the notice to be published next week in the Federal Register.