US lifts ban on offshore drilling in Gulf of Mexico

Oil and gas companies will be back in business in the Gulf of Mexico after the US government lifted the moratorium on deepwater oil and gas drilling yesterday.

The ban was imposed by the US government on 27 May 2010, a month after BP's Deepwater Horizon rig exploded on 20 April 2010 in the Gulf of Mexico killing 11 people and spewed an estimated 200 million gallons of oil, creating one of the world's worst environment disasters.(See: Drilling delays in US Gulf would cause oil price hike, job losses: API)

Although the ban was scheduled to expire on 30 November, the Obama administration decided to lift the moratorium ahead of schedule following pressure from the oil and gas industry as well as from the Gulf coast states, where about 8,000 to 12,000 jobs were lost temporarily due to the ban.

The lifting of the ban also came conveniently just weeks before midterm elections, where the ruling party the Democrats is facing widespread criticism on the sluggish economy, the drilling ban among many other issues.

Interior Secretary Kenneth Salazar said yesterday that ban was lifted after his department has written new protective and stringent measures that would ensure safety in offshore drilling.

The new rules apply for new standards for well design, blowout preventers, safety certification, emergency response and worker training. It now makes the CEO of an oil company responsible and liable in the event of future accidents as he would have to certify that his company has complied with all the new regulations.