US Senate Energy and Natural Resources Committee members generally agreed that tougher federal offshore oil and gas well control regulations should be adopted soon, but disagreed over whether the Obama administration’s proposed regulations go too far or not far enough.
Elizabeth Warren (D-Mass.) said testimony from American Petroleum Institute officials expressing confidence in industry’s ability to handle potential problems prior to the 2010 Macondo deepwater oil well blowout and resulting 5-million bbl spill made her skeptical of similar industry assurances now.
Warren suggested that oil and gas producers should not be allowed to expand onto the US Outer Continental Shelf off the Mid-Atlantic and Alaska coasts without more stringent requirements.
Bill Cassidy (R-La.) cited industry concerns that the US Bureau of Safety and Environmental Enforcement’s proposed rules contain provisions that could create more problems than they would solve.
Cassidy said these include proposed drilling mud weights, which he said took industry officials by surprise, and requirements using technology that hasn’t been developed, such a process to center a pipe before it is sheared. Requiring that blowout preventers be disassembled and visually inspected every 5 years increases the potential for human error, Cassidy stated.
Witnesses at a Dec. 1 hearing on the proposals, however, joined committee members in calling for adoption of BSEE’s proposed regulations (OGJ Online, Apr. 14, 2015). “We’re taking concerns about potential safety and environmental problems seriously,” BSEE Director Brian Salerno said. “Our approach actually is a hybrid. It provides certain requirements and present opportunities for alternatives to be presented.”
‘There are still issues’
The need for a tougher federal offshore well control rule is demonstrated by the fact that control loss incidents are occurring at about the same rate they did before Macondo, which took 11 lives, he told the committee. “It is abundantly clear that despite post-Macondo improvements in safety and technological advancements, there are still issues that must be addressed in order to see an appreciable decrease in dangerous loss of well control incidents,” Salerno said.
The US Department of the Interior agency also recognizes that some flexibility will be necessary, Salerno said. “I think provisions for alternative compliance are necessary, and those exist in several parts of this rule,” he said. “The dialogue between my agency and the industry about what is accepted for a particular well is addressed in the permitting process.”
But API Upstream Operations Group Director Erik Milito said API the trade association has several problems with the proposed regulations that include strict requirements that failed to recognize the drilling margin—the difference between the weight of mud in the well to keep fluids and hydrocarbons from flowing into it and reaching the surface, and the weight that would cause the rock formations being drilled through to break down.
“In short, this strict, prescriptive requirement denies the driller the ability to make risk-based decisions, in consultation with BSEE, and may create wellbore stability problems that add unnecessary risk to personnel, the environment, and facilities,” Milito said. A number of the proposal’s other prescriptive requirements will only stifle innovation and delay implementation of new technologies that could improve safety and operations, he added.
Basic rules should reflect the best possible safety and regulatory requirements, Milito said. “We have a lot of concerns about having a predictable operating environment when alternative compliance provisions can be unusually difficult. We support a lot of this rule, but want to work with the government on areas where we’re concerned to make sure we collectively get it right.”
Backs BSEE’s proposals
A third witness, Jacqueline Savitz, vice-president for US oceans at Oceana, said the environmental organization opposes offshore oil and gas activity, but supports BSEE’s proposed regulations as the present best approach since reliance on offshore supplies won’t be eliminated overnight. “If we really want to stop offshore spills, we have two choices: stop the drilling, or put stronger regulations in place because we can’t count on the industry,” she said. “It cut corners on the Deepwater Horizon, and we saw what happened there.”
For performance-based regulations to work offshore, industry must do its part and be more ready to share data during emergencies, Ranking Minority Member Maria Cantwell (D-Wash.) said. “As we have moved into deeper water, the [US] Coast Guard has said we don’t have the ability to clean up oil off ice. That is why we need to strengthen [the National Oceanic and Atmospheric Administration’s] role in Department of Interior leasing decisions,” she said. “It’s clear we have many challenges in front of us, but we should move ahead and approve these rules without further delay.”
The hearing also considered the administration’s proposed requirements for offshore Alaska oil and gas activity, which committee chair Lisa Murkowski (R-Alas.) said are so restrictive that they helped drive Statoil and Shell from their Chukchi Sea leases recently.
“I believe our regulators should work to make certain operations are safe, but also economic,” Murkowski said. “For us, as leaders in an Arctic environment which the US should clearly be doing, I think we’re ceding standards and an economic opportunity. I think we’re taking a back seat because of excessive regulatory hurdles operators in the US Arctic faced.”
The hearing’s fourth witness, Mark Rockel, a principal consultant with Ramboll Environ in Arlington, Va., said an analysis the organization conducted for the White House Office of Management and Budget of the proposed Arctic offshore oil and gas regulations found presidential directives were violated by requirements for operators to have a same-season relief rig, a seasonal drilling limit, and a demonstrated capacity to respond fully to a worst case spill with mechanical recovery alone.
“The conclusion of the review is that the costs of the potential elements reviewed significantly exceed their benefits,” Rockel testified. “In addition, if codified in a regulation, these elements would be inconsistent with US policy guidance directing agencies toward performance-based regulations and would not be in harmony with international standards and best practices.”
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