Posted on Thu, Sep. 30, 2010
last updated: September 30, 2010 07:34:39 PM
WASHINGTON — The Interior Department Thursday issued two new rules to improve safety on offshore oil and gas rigs, bringing the Obama administration a step closer to lifting its ban on drilling in deep waters in the Gulf of Mexico.
One rule calls for a workplace safety system to identify hazards and reduce human errors, including a requirement that each rig have an oil spill contingency plan and conduct drills to practice it. Oil and gas companies had strongly objected to such a rule before the BP gusher sent 4.1 million barrels of oil into the Gulf over the spring and summer.
The other rule prescribes how cement and drilling fluids should be used to maintain the well bore and toughens standards for blowout preventers and other equipment design to shut off the flow of oil and gas in an emergency.
The work place rule will take affect as soon as it is published. The new drilling regulation is effective immediately.
Oil and gas industry groups denounced the new regulations as likely to delay new government permits to drill.
"We cannot have an approval process that creates unpredictable delays that could place at risk the flow of domestic energy in our country," said Erik Milito, a director for the American Petroleum Institute, which represents large oil companies.
The Gulf of Mexico is the source of 31 percent of domestic oil production and 11 percent of domestic natural gas. There are nearly 4,000 wells 1,000 feet or more below the surface. Those deep wells produce 80 percent of U.S. Gulf oil production and 45 percent of the natural gas.
Karen Harbert, president and CEO of the U.S. Chamber of Commerce's Institute for 21st Century Energy, echoed the condemnation.
"While the ongoing important investigations into the Gulf accident are necessary and may lead to new safety measures, requiring industry to navigate a tangled web of new regulations will only lead to increased uncertainty for businesses and consumers and less investment in America's vast resources in the Gulf," Harbert said in a statement.
Jacqueline Savitz of the conservation group Oceana said the new regulations didn't go far enough and called for a ban all offshore drilling.
There's no guarantee that the stricter standards won't be ignored, she said. "The BP disaster revealed that conditions are unpredictable and companies take shortcuts to increase profits," she noted.
Michael R. Bromwich, director of the Interior Department's Bureau of Ocean Energy Management, Regulation and Enforcement, promised more change ahead.
"We are substantially raising the standards for all offshore operators, and are doing it in an orderly and responsible way," he said. "We will continue to move forward with other changes and reforms in what will remain a dynamic regulatory environment."
Among the additional rules expected are new design requirements for blowout preventers, which are supposed to cut the flow of oil and gas but failed in the case of BP's Deepwater Horizon well, and new government oversight of industry safety efforts.
Marilyn Heiman, director of the Pew Environment Group's offshore energy reform program, praised the rules and said she expected that when Interior Secretary Ken Salazar lifts the Obama administration's current moratorium on offshore drilling — the moratorium is set to expire Nov. 30, but is expected to be lifted earlier — he will slow down approvals of new permits to ensure that there's a thorough review and a real commitment to the new regulations.
"We're really glad that the secretary is not allowing politics to enter into this and doing a good job to ensure prevention and safety are in place," she said.
The regulations apply to all offshore oil and gas development and are the latest changes in the way the United States oversees offshore drilling since the Deepwater Horizon rig exploded, killing 11 workers and touching off the gusher.
Those changes include the abolition of the Minerals Management Service, which had supervised drilling, and the creation of Bureau of Ocean Energy Management, Regulation and Enforcement. The Interior Department also has imposed new requirements for environmental reviews and permitting and suspended Shell Oil's plans to drill exploratory well in the Arctic. Four new lease sales in the Arctic were cancelled.
Federal scientists also are conducting environmental studies of the Gulf of Mexico and the Arctic Ocean that are intended to govern future decisions about oil and gas development.
Pew's Heiman called on the government to ensure that the Coast Guard and others have the ability to clean up a spill in the Arctic before allowing drilling there. She noted that the region lacks Coast Guard facilities, ports and equipment and that response would be complicated by ice, cold and darkness in the long winters.
The next government action, however, is likely to be lifting the deep-water moratorium in the Gulf.
Heiman said Congress should approve the $100 million the administration has requested for offshore oversight, including hiring more inspectors.
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