Offshore Drillers Must Improve Safety, Salazar Says
Oil and natural-gas drillers in U.S. waters must improve emergency systems and estimate a worst- case spill if safeguards fail, under rules issued today in response to BP Plc’s Gulf of Mexico spill.
“We are raising the bar for safety oversight and environmental protection at every stage of the development and drilling process,” Interior Secretary Ken Salazar said in a speech at an energy conference in Washington. “Operators will be required to meet new standards for well design, casing and cementing.”
The new requirements and a report Salazar received from the bureau regulating offshore drilling are “a big step forward” toward ending the Obama administration’s moratorium on deep- water drilling, Robert Gibbs, the White House press secretary, told reporters today. The administration halted drilling in waters deeper than 500 feet (152 meters) after BP’s Macondo well off the Louisiana coast blew out April 20, killing 11 workers and setting off the biggest U.S. oil spill.
“There are a series of technological and safety reforms that this administration is very serious about implementing, that need to be implemented and secured prior to the lifting of that moratorium,” Gibbs said. While the moratorium expires Nov. 30, administration officials have said they may be able to lift it earlier.
Industry groups and officials representing Gulf Coast states have said the drilling ban is adding to economic devastation in a region already hit hard by effects of the spill on industries such as fishing and tourism. Senator Mary Landrieu, a Lousiana Democrat, has said she will block Senate action on President Barack Obama’s nomination of Jack Lew to lead the White House budget office until the moratorium is lifted.
Today’s drilling rules complement environmental and safety regulations issued in June by the Bureau of Ocean Energy Management, the Interior Department unit that oversees drilling.
The rules are aimed at tightening workplace safety on offshore rigs and beefing up standards for equipment. In June, regulators said chief executive officers must certify that their companies comply with the regulations. Drillers also must provide third-party verification that blowout preventers, devices designed to cut off oil flow in a leak, are properly designed and can stand up to pressure under all conditions. A blowout preventer failed in the BP spill.
Randall Luthi, president of the Washington-based National Ocean Industries Association, an industry group, said the Interior Department should have ended the drilling ban today.
“It’s unfortunate that the department did not take this opportunity to lift the job-killing deep-water drilling moratorium,” Luthi said in a statement. “The devil will be in the details and the ability of the department to provide adequate guidance and actually process permits.”
Companies have been anticipating the new requirements since a May 27 Interior Department report outlined safety measures for offshore drilling, said Erik Milito, upstream director at the Washington-based American Petroleum Institute, an oil industry group. How fast drillers can get back to work will depend on how quickly the Bureau of Ocean Energy Management can process permits, he said.
“We have a lot of concerns about that,” Milito said yesterday on a conference call with reporters. “Just lifting the moratorium in and of itself isn’t going to put people back to work.”
No Immediate Drilling
Few drilling permits are likely to be issued in the month after the suspension is lifted, said Michael Bromwich, director of the offshore bureau. While the new requirements won’t come as a surprise to the industry, Bromwich couldn’t say how many operators already comply.
“Even when the moratorium is lifted, you’re not going to see drilling going on the next day or even the next week,” Bromwich told a panel investigating the spill Sept. 28. “It’s going to take some time, and I’d simply be guessing at this point how long.”
Salazar defended the moratorium in his comments today.
“Some have criticized the suspension, but imagine if there had been a second deep-water blowout in the Gulf of Mexico this summer,” he said. “We will only lift the moratorium when I, as secretary of Interior, am comfortable that we have significantly reduced those risks.”
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