BP spill one year later: US regulators, drillers at odds

20 April 2011 15:35  [Source: ICIS news]

The Deepwater Horizon rig on fireWASHINGTON (ICIS)--One year after the BP rig disaster, federal regulators are urging further safety and containment measures, the energy industry complains of slow permitting, and members of Congress and the public urge more drilling as US gasoline prices edge past $4/gal (€0.74/litre).

The American Petroleum Institute (API) said that beyond the regulatory and policy issues raised by the 20 April 2010 rig explosion and months-long oil spill, “it is important that we remember the 11 workers who died in the accident, their families and the communities along the Gulf coast that were most affected”.

“They remind us,” said API president Jack Gerard, “that in our efforts to continuously improve safety in our operations, there can be no let-up.”

The 11 men perished when the Deepwater Horizon drilling rig exploded and sank in mile-deep waters of the Gulf of Mexico one year ago on Wednesday.

“We should also keep in mind our industry’s unprecedented response to addressing the spill and to improving safety after the accident,” Gerard said, noting that federal regulators incorporated a number of industry recommendations in the Interior Department’s new and broadened offshore development regulations.

Interior Department Secretary Ken Salazar cited the one-year anniversary of the BP accident in convening the first meeting in Washington of a new a government and stakeholder group called the Ocean Energy Safety Advisory Committee (OESC).

The 15-member panel includes federal officials, representatives of the offshore oil and gas industry, academics and various research groups. 

Salazar said the panel would advise his department “on matters and actions relating to offshore energy safety, including drilling and workplace safety, blowout containment and spill response”.

While federal officials have resumed issuing permits for drilling operations in the Gulf - chiefly for deepwater wells that were already in development before the BP accident but also for one or two new projects - offshore energy officials complain that permitting officials have been moving at an “excruciatingly slow pace”.

Dan Naatz, vice president for federal resources at the Independent Petroleum Association of America (IPAA), said that despite the significant response of the energy sector in the wake of the BP disaster, “there are still a lot of challenges going forward”.

“There is a lot of frustration among our independent producers,” Naatz said. IPAA’s member firms are independent drilling companies that account for 95% of all US onshore and offshore oil and gas well drilling.

“It has been difficult for some of our members to get their arms around significant new sets of regulations” issued by the Interior Department, he said, “and it is even difficult for the agency to come to grips with the new rules”.

“Permits are being issued, but it is unbelievably slow, excruciatingly slow,” he said, adding: “We hope the agency is really committed to moving forward and issuing permits so that people can get back to work.”

Naatz was referring to the Interior Department’s Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), formed in the wake of the BP accident and now in charge of regulating and authorising offshore energy development.

He cited comments by President Barack Obama before the BP tragedy to the effect that the US would aggressively pursue its offshore energy resources in US waters of the Gulf and also along the nation’s Atlantic coast.

“We hope the administration will take a serious look” at post-accident improvements by the industry and the need for more energy development, Naatz said.

“But their actions so far have indicated it will be a real challenge getting US offshore energy development expanded beyond the Gulf,” he added.

House Natural Resources Committee Chairman Doc Hastings (Republican-Washington) said that the Obama administration needs to pick up the pace in permitting.

“For the past year, offshore energy operations in the Gulf have been sidelined, leaving thousands out of work,” Hastings told an anniversary-related public hearing near the Louisiana Gulf coast.

“Rigs have left the Gulf for foreign countries, and with gasoline prices rising toward $4 per gallon, the US cannot afford to shutter American energy production,” Hastings added.

The IPAA cited a new poll by CNN/Opinion Research showing that 69% of Americans favour increased offshore drilling.

That support, which the poll said was shared by majorities among Republicans, independents and Democrats, was up from a 20% reading in June last year when the BP oil spill was at full volume and matches the level of public backing for offshore drilling seen in mid 2008.

($1 = €0.70)

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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