A regulatory regime developed by the Department of Interior (DOI) and industry in the weeks since DOI imposed a moratorium on deepwater drilling in the Gulf of Mexico (GOM) provides "an adequate margin of safety" to allow the moratorium to be lifted, according to a report by the Bipartisan Policy Center (BPC).

"The Department of Interior's drilling moratorium has served the productive purpose of allowing time for both industry and government to prepare for a safer, more vigilant and dependable future for U.S. offshore drilling," BPC said in its report. "We believe DOI and the industry have used this time effectively to develop a new regulatory regime for drilling in the Gulf of Mexico...If industry is diligent in incorporating these requirements and DOI is vigilant in oversight and enforcement, we believe this new regime will provide an adequate margin of safety to responsibly allow the resumption of deepwater drilling in the Gulf of Mexico."

Erik Milito, head of the American Petroleum Institutes upstream group, "wholeheartedly agrees" with BPC's conclusion that new rules issued in June by DOI provide an adequate margin of safety to allow the resumption of deepwater drilling.

"The Bipartisan Policy Center report is another indication of what we've been saying for some time: We need to lift this deepwater moratorium, which is having the effect of further harming an already-struggling Gulf community," Milito said. "The oil and natural gas industry quickly went into action and developed enhanced safety, equipment and operational procedures to elevate safety and environmental performance.

"These measures have been adopted by the government and are now requirements for offshore drillers. The industry has lead the way to get back to work and it is now up to the government to do the same."

In the wake of the blowout of BP plc's Macondo Well and the sinking of the Deepwater Horizon rig four months ago, President Obama in May said he would halt or suspend drilling or planned drilling in the GOM and offshore Alaska and Virginia (see Daily GPI, May 28; April 27). Enforcement of that sweeping moratorium was blocked by a federal judge in New Orleans (see Daily GPI, June 23). The current moratorium on deepwater drilling in the GOM, which was issued by Interior Secretary Ken Salazar July 12, is due to last until Nov. 30 or until Salazar determines that drilling operations can proceed safely (see Daily GPI, July 13).

While the need to impose a moratorium on deepwater drilling "reflects how unprepared both government and industry were for an incident of this magnitude," compliance with DOI directives issued in recent weeks, including the department's Notice to Lessees No. 5 and No. 6, "will achieve a significant and beneficial reduction of risk," BPC said in its report.

"It is possible that the costs and technical sophistication needed to comply with these new requirements may discourage some rigs and companies from future operations in the Gulf of Mexico. Although this outcome would be unfortunate, we believe it is imperative that all companies be held to a consistent set of safety requirements. While we appreciate the costs of delay, we urge DOI and industry to ensure effective compliance with this new regulatory regime."

The Marine Well Containment (MWC) project, a rapid-response system to capture and contain oil and natural gas in the event of a well blowout being developed by ExxonMobil Corp., Chevron Corp., ConocoPhillips and Royal Dutch Shell plc (see Daily GPI, July 23), "is commendable for its breadth," BPC said.

"DOI should support these cooperative efforts to ensure that all operators have a vested interest in the MWC and have access to the critical new equipment under development," BPC said.

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