The US Senate Energy and Environment Committee's June 24 hearing attracted a crowd to hear senators discuss four bills responding to the Gulf of Mexico deepwater well blowout. US Interior Sec. Ken Salazar and Michael R. Bromwich, director of the US Bureau of Ocean Energy Management, Regulation, and Enforcement, were there to discuss the former Minerals Management Service's reorganization.
By the time Stone Energy Corp. Pres. David H. Welch testified, most of the committee members and spectators had gone, which was unfortunate because he made several important points.
"From an industry perspective, I am less concerned with the acronym associated with the agencies than I am getting a timely response and working with people who are competent and professional," he said.
"If you charge the government with new functions and responsibilities ensure those people are funded and trained to meet those responsibilities in a timely manner," Welch said, adding, "These organizational changes will be judged by the results and the answer to the question of whether people were placed in the best position to succeed."
Avoid ambiguities
He suggested that the committee look at the use of ambiguous words such as "reasonable," "acceptable," and "relevant," as they could lead to more litigation than regulation.
Reorganization of the agency responsible for federal offshore resource management may have been necessary before the Macondo well blew out, Welch noted. "However, efforts to significantly change the regulatory environment without a full understanding of facts could likely lead to unintended consequences that are difficult to undo," he said.
Welch noted that while he didn't want to minimize events in the gulf, he also wanted Congress to examine the safety record over the last 40 years before making wholesale changes. A few additional requirements, such as independent verifications of blowout preventers and safety system functions, and increasing the number of federal offshore inspectors will reduce the likelihood of a similar future disaster, he said.
Deepwater containment
"Also, we have seen over the last 60 or so days development of a deepwater containment technology that did not really exist to my knowledge before the spill. Going forward, think of the mitigation if one of those devices was already built and sitting at Port Fourchon ready to deploy in 2 days instead of 2 months."
Welch raised one more point with committee chairman Jeff Bingaman (D-NM) and ranking minority member Lisa Murkowski (R-Alas.) after the hearing adjourned. Asked what it was, he said that if offshore liability limits are raised significantly, they should reflect a producer's actual interest so a company with a 5% stake doesn't face the same potential cost as one with a 90% interest.
"I'm not sure they had considered it," he told OGJ. "They're aware of it now."
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