September 16, 2010
http://www.chron.com/disp/story.mpl/business/energy/7203039.html
DISASTER IN THE GULF
By JENNIFER A. DLOUHY
Sept. 15, 2010, 11:08PM
WASHINGTON The Obama administration on Wednesday launched plans to clean up “idle iron” in the Gulf of Mexico, requiring companies to dismantle deserted platforms and permanently plug thousands of abandoned oil and gas wells – including some that are decades old.
The mandate will affect nearly 3,500 nonproducing wells and require the decommissioning of about 650 unused oil and gas production platforms.
Interior Secretary Ken Salazar said the move is part of a broader push to boost environmental protections and the safety of offshore energy production.
“We have placed the industry on notice that they will be held to the highest standards of planning and operations in developing leases,” Salazar added.
For years, environmentalists and industry analysts have been highlighting the problem of “idle iron” – the glut of abandoned rigs, platforms and wells in the Gulf that are no longer in use. And the new rule was in the works long before the April 20 explosion of the Deepwater Horizon rig.
But the disaster inspired fresh scrutiny of the problem and spurred concerns that the aging infrastructure poses environmental risks, especially during hurricanes.
Michael Bromwich, the director of the new Bureau of Ocean Energy Management, Regulation and Enforcement, said the rule responds to that threat.
“This initiative is the product of careful thought and analysis,” he said, “and requires that these wells, platforms and pipelines are plugged and dismantled correctly and in a timely manner to substantially reduce such hazards.”
The mandate – set to go into effect Oct. 15 – represents a change in the government’s handling of abandoned platforms and wells.
Until now, federal decommissioning requirements forced companies to remove infrastructure and plug wells within a year after their individual offshore oil and gas leases expire.
Historically, that policy gave companies plenty of time and freedom to use once-abandoned platforms and other infrastructure to support future wells and other projects.
But the “notice to lessees” issued by the Interior Department Wednesday would require the decommissioning of any well that has been idle for the past five years, along with any associated platforms and pipelines – even if they are part of an active offshore lease.
Under the rule, current offshore lease owners will have four months to outline their plans for breaking down and securing the facilities.
Most operators will have no problem complying with the mandate, American Petroleum Institute spokesman Cathy Landry said.
But industry officials said the speed of the cleanup depends on the pace of environmental reviews and the approval of necessary permits.
Randall Luthi, president of the National Ocean Industries Association, stressed the importance of the government swiftly reviewing and approving permits to take down some of the structures.
So-called “rigs to reefs” programs that would allow decommissioned structures to find new life as marine habitats also hang in the balance.
“Industry is ready to meet its obligations with respect to offshore structures,” Luthi said. “We ask only that the federal government meet us halfway by approving the actual work.”
To ensure the cleanup is done quickly, “the administration must also assist in clearing the path,” Luthi said.
The administration’s move could create more business for some offshore contractors that do decommissioning work in the Gulf.
Rep. Raul Grijalva, D-Ariz., who had pushed for such a cleanup of offshore drilling debris, said the rule will benefit the environment and the economy.
“These structures are not producing resources or creating jobs by just sitting there,” and the risk of leaking, abandoned facilities “is something we’ve overlooked long enough,” Grijalva said. “This announcement should put thousands of laborers back to work in short order cleaning up the Gulf.”
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Don’t blame BP alone for spill, Hayward
tells U.K. lawmakers
‘I understand why people feel the way they do’
By DAVID STRINGER Associated Press
Sept. 15, 2010, 11:02PM
LONDON Outgoing BP CEO Tony Hayward said Wednesday that he understood anger directed at the energy giant in the wake of the Gulf of Mexico oil spill but insisted his company had a strong safety record and was not solely to blame for the disaster.
Testifying before a British parliamentary committee, Hayward acknowledged BP had failed both to stop the spill and to plan adequately to respond to an accident of that scale.
“I understand why people feel the way they do, and there is little doubt that the inability of BP, and the industry, to intervene to seal the leak … was unacceptable,” Hayward told the hearing at London’s Parliament.
Hayward appeared relaxed and confident addressing lawmakers in his native Britain, unlike at a testy hearing before the U.S. House Energy and Commerce Committee in June, when he faced angry accusations that he was stonewalling.
‘Devastating to me’
He said the explosion at the Macondo well on April 20, which killed 11 workers and triggered the massive spill, was “devastating to me personally,” and insisted that standards on safety and training would improve industrywide.
But he said it would be wrong to attach blame only to BP.
“No single factor caused the accident, and multiple parties including BP, Halliburton and Transocean were involved,” he said.
Hayward, who will be replaced Oct. 1 by Bob Dudley, an American, told Parliament’s Energy and Climate Change Committee that the extent of the spill’s environmental impact is also unclear.
“No one knows today the environmental impact of this,” he said.
The British committee’s chairman, Tim Yeo, a Conservative and former environment minister, challenged Hayward about his claim on taking his post in 2007 that he would focus “laserlike on safety.”
“On your watch as chief executive, in that three years, now we’ve had the biggest-ever oil spill in U.S. waters,” Yeo said.
Unfair U.S. response?
Though the British panel largely eschewed the combative style of the U.S. committee, Hayward was repeatedly pressed on whether he believed the response in the U.S. toward BP had been unfair.
“There was an enormous amount of emotion and anger, and it was very understandable,” Hayward said, declining to criticize the reaction from the White House or American public.
Hayward said BP had an “entirely constructive relationship” with the White House during the crisis and insisted the U.S. had not influenced BP’s decision to suspend dividend payments after the spill.