Obama lifts drilling moratorium; new deepwater wells to flow

FORTUNE -- The deepwater drilling moratorium is over. Secretary of the Interior Kenneth Salazar announced today that the ban on leases for new drilling operations, first issued on May 28, is ending over a month before the November 30 deadline. He and Bureau of Ocean Energy Management director Michael Bromwich announced the end of the moratorium today on a 1:00 pm media conference call. "We are open for business," Salazar said.

But not without new rules for oil and gas companies applying for permits. Secretary Salazar acknowledged that the new, strict restrictions could anger some players in the industry. Of the people who might protest the new rules, he said, "they want us to ignore the new reality and go back to business as usual, but that is simply not an option."

Some of the rules for companies applying for drilling applications have already been outlined in the Notices to Lesesses and Operators the Department of the Interior issued this summer. Most of the requirements enhance workplace safety on rigs, Bromwich says.

Before operators in the gulf will receive new drilling permits, an independent third party will have to verify the safety of blowout preventors -- the piece of equipment that failed to shut off the gushing oil in BP's (BP) Macondo spill. Operators will also have to prove they're prepared to deal with a blowout and offer a passable response plan. Besides the rig, drilling projects will have to uphold new well design and well casing design standards, which will be certified by a professional engineer before they're given the green light.

Applications will start rolling in soon. Inspections should only take a day or two to complete, Bromwich says, and insists that he and Salazar are pulling resources from elsewhere in the DOI to keep up with the new application review standards and the increased need for inspectors in the Gulf, although he didn't say how many new inspectors it would take. The Department of the Interior did ask for more money in 2011 to cover the cost of better inspection.

"The truth is, there will always be risks associated with deepwater drilling, but we have now reached a point where we have, significantly, in my view, reduced those risks," Salazar says.

Also, now that Macondo is capped, Salazar says that there are adequate resources in the Gulf to devote to spill response, should they need it.

There's no solid estimate for when the first deepwater offshore drill will crank up again, but it should happen by the end of the year, Bromwich says. Drilling companies who have claimed that they already uphold the safety standards outlined by the government will now have a chance to prove it.