US Govt shutdown weighs on energy sector

House-slams-Obama-offshore-drill-plan11 October 2013, News Wires – A government shutdown is having an increasing affect on the US energy sector, from the fate of the Keystone XL pipeline to the pace of approving offshore development plans.

Former Interior secretary Ken Salazar told reporters on a conference call on Thursday that while offshore permitting for drilling continues, the US Bureau of Ocean Energy Management has stopped reviewing high bids from Lease Sale 223, as well as applications for offshore exploration and development plans.

“The continued shutdown of the federal government will ultimately affect the government approval of activities in the Gulf of Mexico,” the Houston Chronicle quoted Salazar as saying.

Given “the contribution the Gulf is making to the energy future of the United States . . . it’s not the kind of rollback we ought to have,” Salazar said.

The US has also stopped approving permits for onshore drilling on federal lands, leaving smaller companies without “stockpiled” permits at a disadvantage to larger companies.

The shutdown, which entered its 10th day on Thursday, also may delay the approval process for the controversial Keystone XL pipeline, Reuters reported.

Employees of the US State Department, which is charged with reviewing the project because it crosses the international border with Canada, are furloughed,leaving them unable to work on an environmental review.

The agency had intended to issue the review in mid-October prior to a final decision by President Barack Obama in 2014.

“We cannot make any predictions on the timing – we haven’t before and can’t now,” an unnamed official told Reuters.

“We are working as best as we can under the circumstances.”

The shutdown is also affecting the federal government’s review of liquefied natural gas export permits and an auction for oil and gas leases on federal lands in New Mexico.

– Upstream

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