Presidential Oil Spill Panel Holds First Hearing

The Obama administration has ordered a new suspension on deepwater drilling in the Gulf. The ban is slated for four months and supersedes a moratorium that was blocked by a judge earlier this month. Some Gulf drilling operations ceased after the BP oil spill, and the question of how soon they can resume dominated Monday's hearing in New Orleans.

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The Obama administration has again ordered a suspension of new deep-water drilling in the Gulf. This ban runs for about four months. It takes the place of an earlier moratorium that was blocked by a federal judge. The White House says it believes the new rule will stand up to any legal challenges.

Yesterday a national commission investigating the BP spill held its first session in New Orleans. But many who showed up there just wanted to talk about how soon drilling could resume. NPR's Greg Allen reports.

GREG ALLEN: President Obama established the commission with what seemed like a clear mission: to find the root causes of the worst oil spill in U.S. history and make recommendations to ensure a similar disaster would never happen again.

But somewhere between its birth in May and its first meeting yesterday in New Orleans, the commission became embroiled in a very hot issue - the temporary ban on deep-water exploratory drilling in the Gulf.

WILLIAM REILLY: As you know, this is our first meeting today. We're 10 minutes old.

ALLEN: Commission co-chair William Reilly is a former EPA administrator in the George H.W. Bush administration. On the issue of how soon deep-water drilling will resume, Reilly said that's not the commission's job.

REILLY: The idea that we would have a near-term responsibility to recommend on policy was not our understanding, and moreover is not consistent with my most recent conversation as of last Thursday with Deputy Secretary Hayes.

ALLEN: That's David Hayes of the Interior Department. Nonetheless, in announcing the new suspension of deep-water drilling yesterday, the Interior Department said it needed a break so it could wait for information from the presidential commission.

It was confusing. But for many of those called to testify it really didn't matter what the commission thinks its job is. They were there to talk about one issue - the deep-water drilling moratorium and the economic blow it represents for Louisiana.

Michael Hecht, head of Greater New Orleans Incorporated, an economic development council, said the moratorium on deep-water drilling had the potential to turn an ecological catastrophe into an economic calamity that may claim 24,000 jobs in Louisiana alone.

MICHAEL HECHT: And you're talking about close to two billion of lost wages a year, tax revenue losses of up to $15 million a month in Louisiana - that's lost money we can't spend on hospitals, on roads, on schools.

ALLEN: There was talk of layoffs, the ripple effect on the rest of the Gulf economy, of U.S. companies increasingly shifting their drilling to foreign markets.

Some companies active in the deep-water rig business are already pulling assets out of the Gulf. Diamond Offshore Drilling had 10 deep-water rigs there. It's now moving two rigs out. One is headed to Egypt, the other to West Africa. Larry Dickerson is Diamond's CEO.

LARRY DICKERSON: I see a slow motion domino fall in place. First rigs will depart, shedding certain of the jobs.

ALLEN: Over time, as more if its workforce and its activities are in foreign markets, Dickerson said Diamond and other deep-water drilling companies will have to think about moving their headquarters overseas.

DICKERSON: So we will be in a position that we will have effectively given away a high tech, high wage industry that is U.S. dominated.

ALLEN: Also there yesterday was Louisiana Democratic Senator Mary Landrieu.

MARY LANDRIEU: Not all 33 of these deep-water rigs are alike. Some of them high pressure, some of them are low pressure. Some of them are 5,000 feet deep. Some of them are 2,000 feet deep. There are steps that could be done to assure the general public and the Gulf Coast that these operations are safe.

ALLEN: Landrieu had been skeptical of the commission's make up, because it included no one with hands-on oil and gas industry experience. Yesterday she said she was encouraged by the fact that it hired a former Shell VP as a key commission advisor.

Greg Allen, NPR News, New Orleans.

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