US takes steps to increase offshore energy regulations

11 May 2010 19:37  [Source: ICIS news]

US to strenghthen offshore regsWASHINGTON (ICIS news)--The US Department of the Interior (DOI) said on Tuesday it will reorganise and strengthen its regulatory oversight for offshore oil and gas drilling, saying tougher rules and more inspections are needed in light of the Gulf oil spill disaster.

Interior Secretary Ken Salazar said his department’s Minerals Management Service (MMS) would be split into two separate entities to give that agency’s inspection, investigation and enforcement operations greater authority, independence and funding.

Under the existing arrangement, MMS was responsible for overseeing the leasing of federal subsea lands for energy exploration and development, including the collection of royalties and other revenues. MMS also was responsible for monitoring offshore operations of energy companies and ensuring their compliance with environmental and other requirements.

The monitoring and enforcement activity would be spun off into a separate office, Salazar said.

“We need to ensure that the energy companies follow the law and ensure the safety of our environment and their workers,” Salazar told a press conference in announcing the changes.  “The American public must know that energy companies are being held accountable,” he added.

He said he would ask Congress for an additional $29m (€22.6m) in funding to increase the department’s ability to conduct offshore investigations, inspections, studies and other unspecified activities.

He said the department also would ask Congress for legislation to revise MMS review authority, giving the agency 90 days or longer to evaluate energy companies’ offshore development plans, rather than the current 30-day limit.

Salazar said that under his plans for broader review times, the 90-day period could be extended even further if MMS felt it needed more time to conduct additional environmental analysis of an exploration plan.

He said these changes “will not be the last that we will take”.

“We will make more changes to ensure that energy companies are held accountable, that the taxpayers get a fair return for leasing, and that the environment and offshore workers will be protected,” he said.

The American Petroleum Institute (API) said it looked forward to working with Salazar to achieve the goal of providing safe, technically sound and environmentally responsible offshore operations.

The institute, which represented most US energy firms engaged in offshore and onshore oil and gas exploration and development, said it looked forward to learning the details of Salazar’s proposed changes to MMS.

Salazar’s proposal to split the two main functions of MMS also was given tentative support by Representative Doc Hastings of Washington state, who said the MMS changes merit consideration.

“My first reaction is that such a division of duties [at MMS] would have benefits if it can be done right,” said Hastings, the ranking Republican on the House Natural Resources Committee, which has jurisdiction over the Interior Department.

($1 = €0.78)

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