The nation’s top regulator of offshore oil and natural gas activity said the agency suspects that some in industry are purposely submitting insufficient permit applications to test just how strict and precise the review process is.
“I think our people are suspicious that some of the noncompliant applications…have been tests of how rigorous the reviews [are] going to be,” said Bureau of Ocean Energy and Management, Regulation and Enforcement (BOEMRE) Director Michael Bromwich, during a Platts Energy Podium Tuesday. “I think operators know that we’re not going to approve noncompliant plans or permits.”
Bromwich has been director of BOEMRE for 15 months. With the splitting of BOEMRE into two new agencies — Bureau of Safety and Environmental Enforcement (BSEE) and Bureau of Ocean Energy Management (BOEM) — BOEMRE will cease to exist on Oct. 1. Citing the difficulty in finding the right candidate to head BSEE, Bromwich has agreed to stay as temporary director until a permanent one is found (see Daily GPI, Sept. 19). BOEMRE Senior Adviser Tommy P. Beaudreau has been picked to lead BOEM.
Bromwich indicated that the agency had interviewed several promising candidates for BSEE director, but they backed out once they learned about the controversial issues that they would have to deal with. “To be chief regulator in this industry, you got to have a backbone,” he said.
The new director of BSEE, which will be the top offshore regulator, must be able to “stand up to the political heat,” Bromwich said.
He said the agency will need “significantly more resources” to step up permitting and carry out enforcement activity. “Right now we’re on tenterhooks for what’s going to happen in 2012.”
Bromwich further said he supported “organic legislation” to codify the restructuring changes at the agency. Without this, he indicated that the reorganization could later be reversed administratively or legislatively.
Bromwich further indicated that the federal government would soon propose fines against BP and its contractors, Transocean and Halliburton, for violations related to the Macondo well blowout and explosion aboard the Deepwater Horizon rig in April 2010. A joint agency investigative report released last Wednesday on the disaster cited the three companies (see Daily GPI, Sept. 15).
“I am hopeful that they [initial notices of incidents of noncompliance] will be issued this week…or at most slide into next week,” he told reporters. “I anticipate pushback from all the entities that will be cited.”
Historically, he said, BOEMRE has restricted its regulation to operators (rather than contractors), but “I feel very confident in our legal authority to move against the contractors” in this case, adding that it was an “extraordinary case.”
Bromwich said BP and contractors could face penalties of $40,000/day for each violation. He said one letter would be sent to each company itemizing specific violations.
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