Following up on its investigation of offshore drilling practices sparked by the April rig explosion and oil spill in the Gulf of Mexico, the U.S. Department of the Interior (DOI) Thursday formalized two new rules it said will help improve offshore drilling safety and spill prevention. The new rules came under immediate attack from producers, who argued they would extend the moratorium on deepwater drilling in the Gulf of Mexico even after the ban was lifted.
"Under these new rules, operators will need to comply with tougher requirements for everything from well design and cementing practices to blowout preventers [BOP] and employee training. They will also need to develop comprehensive plans to manage risks and hazards at every step of the drilling process, so as to reduce the risk of human error," Interior Secretary Ken Salazar said.
The Drilling Safety Rule and the Workplace Safety Rule announced Thursday follow on directives issued in May and June, and the DOI made clear that these will not be the last (see Daily GPI, June 22; June 9). There was still no word on whether the drilling moratorium in the Outer Continental Shelf (OCS) would continue on the same schedule originally announced, it was set to expire Nov. 30. In a speech Thursday Salazar said only that "we will only lift the suspensions when I am comfortable that we have significantly reduced those risks [of deepwater drilling]."
Earlier this week, Michael Bromwich, director of DOI's Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM), said regardless of when the moratorium is lifted, it will take some time for the industry to comply with the rules and the government to certify that compliance (see Daily GPI, Sept. 28).
Commenting on the Thursday announcement, Randall Luthi, president of the National Ocean Industries Association (NOIA), said, "It's unfortunate that the department did not take this opportunity to lift the job-killing deepwater drilling moratorium or to address the de facto shallow water moratorium." He suggested "the devil will be in the details and the ability of the department to provide adequate guidance and actually process permits.
"One need only look to the shallow water Gulf, where no official moratorium was imposed, to see that permitting has already slowed to a snail's pace under the government guidelines hastily imposed this summer," Luthi added, suggesting Interior needs to devote more resources to the permitting process.
"Today the administration not only continued its crippling moratorium on offshore exploration in the Gulf of Mexico, it also announced new regulations that will effectively keep it in place even when it expires," said Karen Harbert, CEO of the U.S. Chamber's Institute for 21st Century Energy. "We remain concerned that the government has 'no idea' when drilling will resume in the Gulf."
The Independent Petroleum Association of America, which represents independent producers, said DOI "should end [the] moratorium immediately and not play 'bait and switch.'"
The Drilling Safety Rule, effective immediately upon publication in the Federal Register, makes mandatory several requirements for the drilling process that were laid out in Salazar's safety report delivered to President Obama on May 27. The regulation prescribes proper cementing and casing practices and the appropriate use of drilling fluids in order to maintain well bore integrity, the first line of defense against a blowout. The regulation also strengthens oversight of mechanisms designed to shut off the flow of oil and gas, primarily the BOP and its components, including remotely operated vehicles (ROV), shear rams and pipe rams. Operators must also secure independent and expert reviews of their well design, construction and flow intervention mechanisms.
The Drilling Safety Rule is being issued under an emergency rulemaking process. Bromwich said that BOEM will soon move forward with a standard rulemaking process that includes greater opportunity for public comment and that considers implementing additional recommendations of the safety report, such as the requirement that BOPs have two sets of blind shear rams. BOEM will accept and consider public comments submitted within 60 days of the rule's publication, and then either publish a modified rule or a notice that will confirm the rule as final with no additional changes.
The Workplace Safety Rule requires offshore operators to have clear programs in place to identify potential hazards when they drill, clear protocol for addressing those hazards, and strong procedures and risk-reduction strategies for all phases of activity, from well design and construction to operation, maintenance and decommissioning.
The rule also requires operators to have a Safety and Environmental Management System (SEMS), which is a comprehensive safety and environmental impact program designed to reduce human and organizational errors as the root cause of work-related accidents and offshore oil spills. The rule makes mandatory American Petroleum Institute (API) Recommended Practice 75, which was previously a voluntary program to identify, address and manage safety hazards and environmental impacts in their operations.
BOEM will undertake additional workplace safety reforms, such as requirements for independent third-party verification of operators' SEMS programs, through an additional rulemaking process that BOEM will be launching soon.
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