Obama orders firms to change drill plans that mimic BP's

McClatchy NewspapersJune 2, 2010 

WASHINGTON — The Obama administration late Wednesday moved swiftly to plug a hole in its much touted six-month ban on new deepwater drilling when the Interior Department ordered oil companies to overhaul and resubmit dozens of exploration plans that had already been approved but were virtually identical to BP's and that called major spills and environmental damage "unlikely."

The action came after McClatchy informed the White House and Interior officials that it had reviewed 31 deepwater exploration and development plans approved for the Gulf under the Obama administration and found that all of them downplayed the threat of spills to marine life and fisheries.

The language scarcely varied from company to company, suggesting that the plans were pumped out like boilerplate. Of the 31 plans McClatchy reviewed, 14 were approved since the April 20 explosion on BP's Deepwater Horizon oil rig,

The administration had failed to include the plans in its moratorium, and experts told McClatchy that the filings could clear the way for drilling new wells when the ban was lifted. Following inquiries by McClatchy to White House and Interior officials, the Bureau of Land Management announced late Wednesday that oil companies would need to resubmit the plans with additional safety information before they'd be allowed to drill new wells.

"Pulling back exploration plans and development plans and requiring them to be updated with new information is consistent with this cautious approach and will ensure that new safety standards and risk considerations are incorporated into those planning documents," BLM Director Bob Abbey said in a brief press release.

In the White House's initial response to McClatchy's inquiries, spokesman Ben LaBolt said only that a presidential commission investigating the BP spill would also "assess exploration and production plans and could provide options for ways to improve their development and review."

Less than half an hour later, the Interior Department issued its press release, which came from the BLM, not the Minerals Management Service.

Even as millions of gallons of crude from BP's well befouled the Gulf of Mexico, oil companies have continued to submit exploration plans. The MMS had received more than two dozen in the past month.

"Interior has very doggedly refused to address this core problem because they realize that's where the rubber meets the road and the real reform begins," said Kieran Suckling, the executive director of the Center for Biological Diversity, an environmental group that has studied the issue.

"It's a very cynical ploy. They're staying away from the real environmental review process because that's where the stakes are highest for the oil industry."

While the moratorium had blocked new wells and freezes new drilling permits — the last step before drilling begins — it didn't stop companies from taking the earlier step of filing exploration and development plans. These plans include the most thorough environmental studies that companies must conduct during the entire approval process.

Experts say these plans are often filled with incomplete or overly hopeful statements about the likelihood of spills, blowouts and ecological damage.

On May 18, four weeks after the blowout preventer on BP's Deepwater Horizon rig exploded and sent oil gushing into the Gulf, the MMS approved an exploration plan by Petrobras America for Block 697 of the Mississippi Canyon area, the same area where BP was drilling. The Petrobras site is 7,150 feet underwater — nearly one-and-a-half times deeper than where BP was operating.

The Petrobras plan states: "In the unlikely event a blowout were to occur during exploratory operations, the well would most likely bridge over very quickly considering information known about (rock) formation types in the Gulf of Mexico."

While investigators don't yet know what caused BP's blowout preventer to fail, John Evans, the owner of the Evantech petroleum consulting firm in Fort Worth, Texas, said that it was extremely optimistic to expect that a well would automatically "bridge over," meaning that loose rocks from the sea floor would slide into the well bore and seal it off.

"That's a big hope," Evans said. "It could occur, but as to 'most likely' occurring _ I would doubt that."

Given the water pressure at that depth and the huge volume of uncontrolled oil surging from the blowout, sand and other particles would slide along with the rocks, which could eat into the valves on the blowout preventer that are designed to cut off the flow of oil, Evans said.

The plan also said that a relief well would take "approximately 7-10 days to drill"; BP's relief wells aren't expected to be completed before August, 90 days after the accident.

A spokeswoman for Petrobras didn't return phone calls seeking comment.

In the Interior Department's 38-page report on increased safety measures for Gulf drilling, issued last week, drilling permits — known as "applications for permits to drill," or APDs — are mentioned 10 times, while exploration and development plans are mentioned only once. The permits are the final step before new wells are drilled, and experts say that the major environmental review comes at the phase of the exploration plans.

The Obama administration has said that the agency's ability to scrutinize exploration plans was limited by federal guidelines that they be approved or rejected within a 30-day period, and has proposed extending that deadline to 90 days.

"The drill plan is where all the real substance is," Suckling said. "One you get approved there, you've gotten over the big expensive hurdle. You've gotten over the stage where you could be shut down."

A former MMS official, who didn't want to be named criticizing the agency, said: "If you want reform it certainly needs to incorporate (the exploration plans). A lot of times the (environmental) analyses are very incomplete and unfocused."

The exploration plans typically are 50 pages or longer and include lengthy discussions of potential environmental impacts. However, the plans reviewed by McClatchy were often so similarly worded that it appeared that the companies may have cribbed from one another.

At least three plans — by BHP Billiton Petroleum, approved on July 20, 2009; by Noble Energy, approved on Oct. 2, 2009; and by Hall-Houston Exploration III, approved May 14 — use identical wording to describe the impact of a potential spill on water quality. While "the dissolved components and small oil droplets" would "temporarily" affect the waters, "dispersion by currents and microbial degradation would remove the oil from the water column or dilute the constituents to background levels," all three plans say.

Some scientists disputed that, saying it's unclear whether the magnitude and depth of the BP spill, and the company's unprecedented use of chemical dispersants, will make it harder for microbes to break down the oil naturally.

"It's kind of a lazy statement," said Andreas Teske, a microbiologist at the University of North Carolina-Chapel Hill. "It's OK if you just look at an oceanography textbook . . . but on an oil spill of this magnitude, no one has thought about this before."

Even plans for wells located hundreds of miles apart shared similarities. An exploration plan by Anadarko Petroleum approved on June 17, 2009, noted that from 1980 to 2000, "OCS (Outer Continental Shelf drilling) operations produced 4.7 billion barrels of oil and spilled only 0.001 percent of this oil, or one barrel for every 81,000 barrels produced."

The identical language appeared in a plan by MCX Gulf of Mexico to develop a site more than 240 miles to the west, off Corpus Christi, Texas, which the MMS approved on April 21 _ the day after the BP explosion.

"These oil companies, if you know the rules, you put down the exact same things. You get the rubber stamp, and the system just plows forward," Suckling said.

(Marisa Taylor contributed to this article.)

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