U.S. Moratorium on Deep-Water Oil Drilling May End Early, Bromwich Says

A U.S. moratorium on deep-water oil and gas drilling may end sooner than Nov. 30 if evidence from hearings that start this week support lifting the ban, Bureau of Ocean Energy Management Director Michael Bromwich said.

Bromwich said he’ll confer with Interior Secretary Ken Salazar “in real time” about his findings during meetings with industry officials, academic experts and environmentalists beginning tomorrow in New Orleans and continuing next week in Mobile, Alabama, and Pensacola, Florida.

“We may be able to cut short the moratorium before November 20 if that’s what the facts support,” Browmwich told reporters today at a briefing in Washington. “It’s everybody’s hope that the moratorium can be lifted.”

The Interior Department revised the drilling ban July 12 after a court invalidated the six-month moratorium imposed following the BP Plc oil spill in the Gulf of Mexico. At the time Salazar announced the policy, he said he would consider modifications based on new information.

A primary reason for the original ban was that the response to the BP spill was tying up almost all of the oil industry’s equipment that would be used to contain and clean up an accident, Bromwich told reporters.

The lack of deep-water accidents in the past several decades allowed the industry to become self-confident and led to complacency among companies and regulators, Bromwich said.

‘Suspend Their Skepticism’

“It caused people to suspend their skepticism, to suspend their critical faculties and not propose certain enhancements of safety that now seem obvious to them,” he said.

Companies have responded with proposed improvements, he said.

On drilling in shallow water, Bromwich said regulators have offered guidance on rules for responding to worst-case blowout scenarios. Applications will be approved quickly, he said.

“I’m fairly confident the shallow-water drillers we’ve spoken to fully understand what we expect and what we’re looking for, and that they intend to comply with those requests if they haven’t already,” Bromwich said.

Regulators may not fully understand what led to BP’s spill until multiple investigations are complete, and even then the full story of the accident may never be known, Bromwich said.

“That’s not necessary to tighten up the regulatory regime,” Bromwich said.

Investigations Unit

Bromwich, named director of the agency that will replace the Minerals Management Service on June 15, previously was inspector general at the Justice Department. Eliminating conflicts of interest at the agency is a top priority, he said.

One of his first actions was creating an investigative unit that will have as many as 10 prosecutors and attorneys within 60 days, Bromwich said. An FBI agent may be assigned to the agency, he said.

“We need to have an enforcement structure and an investigations capability that will make it clear to the industry and the public that we’re going to take rules violations extremely seriously,” Bromwich said.

To contact the reporters on this story: Jeff Plungis in Washington at jplungis@bloomberg.net;

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