BOEMRE considers widening regulation beyond producers

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Apr. 13 -- The US Bureau of Ocean Energy Management, Regulation, and Enforcement is considering an expansion of its regulatory reach beyond offshore oil and gas well operators to drilling contractors and service and supply companies, BOEMRE Director Michael R. Bromwich said on Apr. 12. The idea stems from lessons learned after the Macondo well accident and oil spill nearly a year ago, he and US Interior Sec. Ken Salazar told reporters.

Bromwich said the idea grew from resistance BOEMRE investigators encountered following the accident from companies working for BP PLC, Macondo’s operator. He said US Department of Interior lawyers subsequently told him that the agency’s reach applies only to operators, and that it could not compel drilling contractors and service and supply companies to cooperate.

“We’re very interested in moving aggressively and responsibly,” Bromwich said during a briefing at DOI headquarters, adding that legislative authorization may be needed. Salazar said BOEMRE also needs congressional approval to increase the 30-day offshore drilling permit approval time limit, which the 2005 Energy Policy Act established to 90 days.

“We have moved forward with what has been a sprint of reforms,” the secretary said. “Can we do more? Absolutely, but we need legislation authorizing it.” He said the continuing resolution that Congress was expected to approve increases BOEMRE’s budget through Sept. 30, but added that DOI and the agency expect a fight as Congress starts working on their requests for fiscal 2012.

“Will we be fully successful? Probably not,” said Salazar. “But we’ll fight hard.” Reforms in the past 9 months have enhanced drilling and offshore workplace safety as BOEMRE has reorganized to eliminate conflicting missions and improve its safety and environmental enforcement, he continued.

Congressional failure to pass a budget hampered some improvement efforts, he said. “We could have started a lot sooner to hire more inspectors and staff,” Salazar said, noting that Bromwich still has recruited new employees aggressively from major US universities’ petroleum engineering departments.

Bromwich said the first deepwater exploration plan since the accident and spill was approved in 30 days, but only because Shell Offshore promptly resubmitted it with the necessary additional information. Others could take longer, “and that could make our point that, as an agency, we need more than 30 days to approve offshore drilling permits,” he said.

Salazar said several oil and gas trade associations and individual companies acknowledged that changes were needed as more was learned about what led to the accident and spill. “We have seen signs that many recognize that this is a post-Macondo world,” he said. “But no one is saying that everything is being done that needs to be done.”

“Several companies have said it was a wake-up call,” said Bromwich. “Others said that it was an anomaly. I think that’s been debunked by the president’s commission, which said there were 79 previous incident which were nearly as serious. That’s 79 near-Macondos. We have to be clear-eyed about this and recognize there’s no way we can make the risks zero. But we can make them as low as possible.” 

Nick Snow at nicks@pennwell.com.

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