US President Donald Trump's executive order for federal agencies and departments to review regulations and look for possible improvements presents several opportunities for the nation's oil and gas industry. Some of the most interesting are offshore, National Ocean Industries Association Pres. Randall B. Luthi said.
"The executive order was expansive instead of limiting, so several matters could be on the table," Luthi told OGJ. These include an air-quality rule aimed at improving onshore air by limiting offshore operations' emissions, and a financial assurance notice to offshore lessees that already was on hold, Luthi said.
"We've always said it's a rule before its time," he said of the air-quality regulation. "Before changing a lot of standards and establishing new requirements for offshore activities, we feel there should be a demonstrated effect on onshore air quality. Those studies have not been completed."
Putting the financial assurance notice on hold "opened the door for industry to discuss with regulators what the overall goal is and how to meet it," Luthi said. The primary concern is making certain no leases are left "naked," meaning a viable lessee would be left with no way to pay decommissioning costs, he said.
The US Bureau of Ocean Energy Management should identify leases that pose the risk of making taxpayers pay the costs, said Luthi, who led the US Minerals Management Service, BOEM, and the US Bureau of Safety and Environmental Enforcement's predecessor during George W. Bush's second presidential term.
"Those that have the potential for leaking should be at the top of the list so everyone can see what possibilities are for taking care of decommissioning," Luthi said. "Issues of secondary bonding and determining financial worth could be discussed later."
At BSEE, timelines need to be revised and extended, he said. "On drilling margins, companies are still unsure how this will be applied."
Agencies need directors
"There can be a lot of discussions and meetings with industries, but when it comes to reaching agreements, BOEM and BSEE need to have directors. Fortunately, searches are under way," he added.
Luthi said newly appointed Interior Sec. Ryan Zinke has several options if he doesn't like the 2017-22 Outer Continental Shelf plan that became final toward the end of President Barack Obama's last term. One would be to direct BOEM to start drafting a new one, as his predecessor Dirk A. Kempthorne did in 2008.
If Zinke did, Luthi said a bill Louisiana's two US senators and Rep. Thom Tillis (R-NC) introduced on Mar. 17 could move matters along because it would give the secretary authority to add sales to an existing OCS program.