New oil drilling regulator lays out the road ahead

McClatchy NewspapersJanuary 13, 2011 

WASHINGTON — Michael Bromwich, the official put in charge of oil and gas regulation after the BP blowout last spring, gave a detailed public update Thursday about changes now under way, including new inspections, environmental reviews and ethical standards.

"The Deepwater Horizon tragedy has shaken government, and I hope industry, out of a complacency and overconfidence that had developed over the past several decades," Bromwich said. During that time, "the increased dangers of deepwater drilling were not matched by increased vigilance and concern for the safety of those operations."

The speech by the director of the Bureau of Ocean Energy Management, Regulation and Enforcement came two days after a presidential commission on the oil spill released its final report on the causes of the BP disaster and how to improve safety. The commission blamed government regulators and the industry for failing to address the risks of deepwater drilling and suggested a multitude of changes. Bromwich said his agency already had been working on many of them.

"A retreat on drilling safety is simply not an option," he said.

Bromwich said afterward that the oil and gas industry was frustrated because new safety regulations were slowing down approvals for new activity in the Gulf of Mexico. He said his staff was talking to industry officials to explain the new rules and answer their questions. He said everyone he'd spoken with told him that the new rules made sense.

Bromwich said he'd be "stunned if we waited until the third or fourth quarter" before issuing new deepwater drilling permits. He predicted that the pace would pick up but that it wouldn't match the "very rapid processing of permits" that industry groups would like to see restored.

Many companies, trade groups and members of Congress have complained since last year, when the agency announced its new safety rules, that they don't know what's next for the permitting process.

"The implication is that we have other regulatory requirements up our sleeves that we have not yet unveiled," Bromwich said. "This is simply not the case. Barring significant, unanticipated revelations from investigations into the root causes of the Deepwater Horizon explosion that remain in process, I do not anticipate further emergency rule-makings. Period."

Still, future modifications will be needed to keep up with technology advances "and with industry ambitions to drill in deeper water in geological formations that have greater pressures," he said.

"The technology associated with offshore drilling will continue to evolve, as will the complexities and risks of those operations, particularly in frontier environments, such as ultra-deepwater and the Arctic."

Bromwich's new bureau is the temporary successor of the Minerals Management Service, an agency that was riddled with trouble because of its conflicting tasks: Promote offshore oil and gas development, enforce safety regulations and maximize revenues from oil and gas to the Treasury.

A revenue collection branch was set up last year, and the agency is setting up new bureaus of energy management and safety and environmental enforcement that eventually will replace it.

There will be a stronger role for environmental review and analysis in both new organizations, Bromwich said. The reviews must be done in a timely way but also "based on a complete understanding of the potential environmental effects of those operations," he said.

Bromwich also said his agency was recruiting experts to monitor deepwater drilling and was working on a training program for inspectors.

He said that where the money would come from was still being worked out. Budget problems in Congress have stymied some of the changes, he said.

The agency has instituted a new policy that requires employees in district offices to report any potential conflicts of interest. They must ask to be recused from inspecting facilities owned by companies they once worked for. They also must report any attempts at inappropriate influence or pressure.

The rules could be difficult for district offices in the Gulf where offshore oil companies are the main employers, Bromwich acknowledged. However, he said he'd stick to the need for a clear boundary between regulators and the companies they oversee.

The agency also plans to make sure that containment resources are immediately available in case of another blowout.

Bromwich gave his speech at the Center for Strategic and International Studies, a Washington policy-research group.

ON THE WEB

Text of the speech

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