Bromwich: Industry to determine when deepwater drilling resumes

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Sept. 14 -- US Bureau of Ocean Energy Management, Regulation, and Enforcement Director Michael R. Bromwich said he had received no suggestions in public forums that the Obama administration’s deepwater drilling moratorium should go beyond its scheduled Nov. 30 expiration date. But the oil and gas industry will determine when deepwater drilling actually resumes, he added.

Permits won’t be issued until applicants have satisfied the requirements, not all of which have been formulated, he told reporters during a Sept. 14 teleconference. “This is a dynamic ongoing process,” he said. “We have not only BP’s internal investigation, but also those by the National Academy of Engineering, the president’s commission, and the joint BOE-Coast Guard effort. I’m sure they’ll make recommendations which will require us to tweak our regulations.

“Our actions won’t be complete overnight. It will take some significant period of time to figure out what needs to be done,” Bromwich said. “These are not a set of regulatory standards that are frozen in time. There are a lot of changes being made now, and more will be made in the future. I think the industry will need to get ready for them.”

Bromwich said most of the initial questions have centered on two notices to deepwater lessees that BOE issued on June 8, which implemented seven safety requirements US Interior Sec. Ken Salazar recommended in his May 27 report to President Barack Obama following the Apr. 20 Macondo blowout and oil spill in the Gulf of Mexico. “There has been some confusion and uncertainty particularly with NTL-6 and its worst-case discharge estimates. We found shallow-water drillers were uncertain and confused, as were several people in our agency,” he said.

“I don’t want to extend the point where drilling can resume,” Bromwich said. “We’ll try and be as clear as we possibly can about what the requirements are, and communicate that to people in the industry. We’ll continue to have open discussions to clear questions up as they arise, although we won’t always be able to supply answers or answer individual questions immediately.”

Report by Sept. 30
He said that while he has been given until the end of October, he hopes to have his report on recommendations from the eight public forums BOE held about the moratorium to Salazar around Sept. 30. “I think we’ll be ironing out details of the report over the next couple of weeks,” he said. “An enormous volume of information was presented at the forums, with about 100 presenters. We want to do justice to it.” Bromwich said that he also hopes to make the Safety and Environmental Management Systems rule, which has been in the formulation process for a longer period, final at the same time.

He held his teleconference a day after Obama sent recommendations for amendments to Interior’s fiscal 2011 budget to US House Speaker Nancy Pelosi (D-Calif.) which would add $66.4 million to BOE’s budget to hire more inspectors and facilitate reorganization of what formerly was the US Minerals Management Service.

“The majority of the additional resources would be used to strengthen core programs within [BOE] to address safety and environmental concerns highlighted by the Deepwater Horizon oil spill,” Jeffrey D. Zients, acting director of the White House’s Office of Management Budget, said in materials which accompanies Obama’s letter. “The additional resources would also be used to address known deficiencies in federal mineral collection activities, including those raised in a recent Government Accountability Office review, and establish an investigation and review unit within the agency.”

The amendment also would provide another $25 million in revenue in conjunction with another amendment which would more than double offshore oil and gas inspection fees collected in fiscal 2011 to $45 million from $20 million. “As a result, [BOE] would have available an additional $91 million in total resources,” Zients said. The White House also proposed raising BOE’s oil spill research budget request by $8.6 million to $14.9 million, and permanently canceling $25 million of unobligated balances in the Royalty and Offshore Minerals Management to partially fund BOE’s reorganization.

Bromwich said he had not been directly involved in developing the proposed budget amendments, but would welcome the additional money because the agency hasn’t had enough resources. “We are developing plans to hire new inspectors. Ads have been placed and active recruitment is ongoing,” he said. “Clearly, we need to step up our efforts to get at pools of qualified people to bolster our ranks we haven’t reached before to bolster our ranks. We’re going to be involved in a full-court press.”

Contact Nick Snow at nicks@pennwell.com.

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