Oil Industry Meeting Offshore-Safety Rules, U.S. Regulator Says

The offshore-energy industry has developed the resources to meet U.S. regulations imposed after the BP Plc oil spill in the Gulf of Mexico, allowing additional exploration and leasing, the top federal regulator said.

The rules require that companies have access to deep-water oil-spill containment and cleanup equipment, meet training requirements and ensure that drilling gear passes tests.

“The good news is, industry is getting it, they are meeting our standards,” Tommy Beaudreau, 39, said in an interview today at Bloomberg’s Washington office. Agencies and industry took “some time to implement those heightened standards, but those standards are real and they’re meaningful.”

Letting London-based BP resume exploration in the Gulf after the April 2010 spill was one of Beaudreau’s early decisions after becoming the first director of the Bureau of Ocean Energy Management in October. The agency also has said it plans to sell tracts in the western Gulf in December, and to auction leases off the Louisiana and Mississippi coasts in May or June.

Beaudreau joined the Interior Department in June 2010 to help Michael Bromwich, who was the top regulator for the Bureau of Ocean Energy Management, Regulation and Enforcement, the successor to the Minerals Management Service. They were colleagues at Fried, Frank, Harris, Shriver and Jacobson LLP, a law firm based in New York.

The two men worked to create three agencies, splitting up the service’s functions: the Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement and the Office of Natural Resources Revenue.

Arctic Drilling

The ocean-energy bureau sells leases and approves exploration plans, while the enforcement bureau hands out well- drilling permits and verifies spill-response plans. The revenue office collects royalty payments from energy companies.

Beaudreau said Royal Dutch Shell Plc, which has said it wants to drill as many as 10 wells in the next two years in federal waters off Alaska, “has more work to do” before meeting U.S. conditions to begin.

The U.S. approved Shell’s exploration plan for the Beaufort Sea in August and is reviewing the company’s proposal for the neighboring Chukchi Sea. The Beaufort Sea approval was contingent upon Shell’s ability to demonstrate oil-spill response capabilities in the Arctic environment.

“We are continuing to work with them to ensure that if any drilling activity is to go forward in the Beaufort or the Chukchi this coming drilling season in the summer, that they’re prepared,” Beaudreau said.

Beaudreau, born in Colorado, grew up in Anchorage, Alaska. His father worked in Alaska’s North Slope oil industry.

To contact the reporter on this story: Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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