Offshore Drillers Get Some, Not All, They Sought From Trump
(Bloomberg) -- The Trump administration is moving to relax some offshore drilling requirements imposed in response to the Deepwater Horizon disaster but is rebuffing the oil industry’s plea for bigger changes.
Proposed rule changes unveiled Friday include easing mandates for real-time monitoring of offshore operations and some other measures safety advocates and environmentalists said were necessary to prevent a repeat of the disastrous 2010 Gulf of Mexico spill.
The shift to loosen requirements comes alongside a Trump administration push to dramatically expand offshore oil development by selling drilling rights in more than 90 percent of the U.S. outer continental shelf.
However, the administration rejected an array of bigger changes sought by oil companies, including their appeal to undo a strict specification for how much pressure must be maintained inside wells to keep them in check.
“People were concerned we’d take a sledgehammer to it," said Scott Angelle, director of the Bureau of Safety and Environmental Enforcement that is proposing the changes. "Absolutely not. This is a very delicate scalpel to the process."
President Donald Trump directed the changes in an executive order last year, telling regulators to rescind or revise rules "that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law."
The underlying requirements were developed over six years and finalized by the Obama administration in April 2016 in response to recommendations from investigators who probed BP Plc’s Macondo well failure. The disaster, caused when flammable gas surged out of the well and ignited on board Transocean Ltd.’s Deepwater Horizon drilling rig, killed 11 workers and sent oil spewing into the water for months.
“The changes we made in the rule do not contradict a single one of those recommendations," Angelle said in an interview, citing a bureau analysis of 424 specific post-spill instructions from more than a dozen task forces and panels that investigated the disaster. The new proposal also would not affect other post-spill reforms, including requirements for oil companies to more holistically assess risks and drilling standards imposed months after the 2010 disaster.
Environmentalists argued the changes were not necessary and could jeopardize safety improvements. Oil companies didn’t lose control of any offshore wells in U.S. waters last year -- down from eight such episodes in 2013, said Lois Epstein, an engineer with The Wilderness Society.
"The rule works and is vital to safer offshore operations," Epstein said in an emailed statement. "Weakening it would not only increase the risk of environmental disaster, it could cost lives."
Representative Raul Grijalva, a Democrat from Arizona, cast the effort as part of "this administration’s obsession with more drilling and fewer regulations -- whatever the cost" and said that was "the same attitude that produced Deepwater Horizon in the first place."
Many provisions of the Obama-era well control rule are being left untouched, including some requirements designed to boost the reliability of blowout preventers, the hulking devices made famous in the BP spill because the one sitting on top of the Macondo well failed to stop the lethal surge of oil and explosive gas. The heart of blowout preventers are their sealing and shearing blades, which can be activated in emergencies to sever drill pipe in a well and close it off, keeping rushing oil and gas locked within.
Under the new proposal, companies would still be required to conduct more frequent testing of underwater blowout preventers, swiftly report when parts fail and use a second set of shearing rams to increase the likelihood of slashing through drill pipe and helping seal an open well hole. However the bureau is proposing to lift a requirement that third-party vendors who test blowout preventers and other equipment be certified by the agency.
The safety bureau also is proposing to spike a provision that forces offshore facilities to halt production whenever they are approached by lift boats that transport equipment to the sites.
And the agency is rewriting a mandate meant to ensure both regulators and oil companies can keep a close watch on distant, deep-water drilling operations by laying out specific requirements for streaming real-time data to facilities onshore. The text of the proposed rule was not made available for review, but a fact sheet summarizing it says the agency is aiming to revise some "prescriptive requirements" so companies have more flexibility in how they handle data without jeopardizing "the benefits of real-time monitoring."
Oil industry trade groups, their congressional allies and companies, such as Exxon Mobil Corp., Chevron Corp., and Anadarko Petroleum Corp., had lobbied for changes in the well control rule imposed under former President Barack Obama, generally asserting it was overly prescriptive, increased costs and in some cases could actually imperil safety.
The Interior Department said its proposal would save industry about $95 million annually.
Erik Milito, a director at the American Petroleum Institute, said the proposed changes "will move us forward on safety, help the government better regulate risks and better protect workers and the environment."
The safety bureau is so far rebuffing one major industry appeal by refusing to rewrite a standard for an acceptable "drilling margin" specifying the precise balance between the drilling fluids that are pumped under the sea floor and the amount of pressure the underground formation can take before it cracks. Industry representatives had argued the strict standard was too rigid and that the government’s waiver process didn’t provide enough certainty for investment.
The bureau isn’t completely ruling out changes to that drilling margin requirement. Instead, it is inviting oil companies and other stakeholders to answer questions about how the standard is working during a 60-day public comment period.
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