Boats fighting a fire on a drilling platform in the Gulf of Mexico on Sept. 2. The Interior Department announced new regulations on offshore drilling today.
http://www.nytimes.com/2010/10/01/us/01drill.html?_r=1
By JOHN M. BRODER
Published: September 30, 2010
WASHINGTON – The Interior Department issued new safety and spill-response regulations for offshore oil and gas drilling on Thursday, but gave no hint of when the moratorium on deepwater operations will be lifted.
The new rules – governing blowout preventers, safety certification, well design, emergency response and worker training – provide offshore drillers with clarity on the terms under which drilling will resume when the current freeze ends. The main conditions had already been telegraphed by the department in a safety report issued in May and in two notices to offshore operators handed down in June, in response to the blowout of a BP well in the Gulf of Mexico on April 20.
That accident, which resulted in the worst offshore oil spill in American history, killed 11 rig workers and spewed nearly five million barrels of oil into the Gulf of Mexico.
Interior Secretary Ken Salazar presented the new rules in a speech Thursday morning, calling them a fundamental change in offshore operations that will guide all future leasing and development decisions in the gulf, the Arctic and elsewhere.
The rules take effect immediately under emergency rule-making powers.
In an interview, Mr. Salazar said he expected oil companies to complain, but to quickly come into compliance.
“We’ll hear from industry that the regulations are too onerous, but the fact is, it’s a new day,” he said. “There is the pre-April 20th framework of regulation and the post-April 20th framework, and the oil and gas industry better get used to it, because that’s the way it’s going to be.”
The secretary pointedly refused to say when or under what conditions he would lift the drilling suspension, which has caused economic hardship along the Gulf Coast and political headaches for the Obama administration in Washington.
“We will lift it at our own time and when we’re ready, and not based on political pressure from anyone,” Mr. Salazar said.
The moratorium on deepwater drilling, imposed in late April, is scheduled to end on Nov. 30, but officials have signaled that it would probably be eased before then.
Senator Mary Landrieu, Democrat of Louisiana and a strong ally of the oil industry, is blocking the confirmation of Jack Lew as the new White House budget director until the moratorium is lifted or substantially eased.
Michael R. Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, the Interior Department office that now polices offshore drilling, is to deliver a report to Mr. Salazar on Thursday providing a blueprint for safely resuming drilling. Mr. Salazar said he would review the report before making any decision on when that might happen.
Mr. Bromwich indicated earlier this week that even after the formal moratorium is lifted, it may be weeks or even months before his agency grants permits allowing the 33 idled deepwater rigs in the gulf to start up again. Permits will be issued only after companies provide new spill response plans detailed certification of the performance of critical equipment such as blowout preventers.
The regulatory agency is also undertaking a new environmental assessment of the impact of oil drilling on the gulf ecosystem, potentially causing further delays.
Oil industry executives, impatient to get back to work in the gulf, expressed resignation about the new rules, saying they were largely expected and can be met, at some cost in time and money.
Their deeper concern, they said, is that the new permitting process will drag on for months, forcing them to furlough workers and seek alternate supplies of crude.
Marvin E. Odum, the president of Shell Oil Company, said in an interview that his company had weathered the moratorium so far by renegotiating contracts on its seven idle deepwater rigs in the gulf, allowing it to keep most of its skilled workers on the payroll.
“That helps with the immediate-term cost impact,” he said. “The big concern is the lost production, and that grows month to month.”
He said he believed Shell and other major oil companies would have little trouble meeting the new conditions, adding that the company already meets the terms of the new guidance on safety and well design in its deepwater operations around the world.
“The piece I’m more concerned about is that when the moratorium does get lifted you won’t be able to get back to work until the permit system starts to flow again,” Mr. Odum said. “Will it be weeks, months? That’s the big question.”
Special thanks to Richard Charter