Business

OFFSHORE DRILLING AGENCY MOVES TO ROLL BACK SAFETY REGS

Posted January 3, 2018 4:55 p.m. EST

WASHINGTON - The Trump administration moved Thursday to begin whittling down offshore drilling regulations put in place following the 2010 Deepwater Horizon accident in the Gulf of Mexico.

The proposed regulatory roll back, which drew condemnation from environmentalists, was pitched as the means for increasing production in the Gulf of Mexico and other offshore regions, which have attracted less interest from oil companies in recent years in the face of low crude prices.

"It's time for a paradigm shift in the way we regulate the [Outer Continental Shelf]," said Scott Angelle, director of the Bureau of Safety and Environmental Enforcement. "There was an assumption made previously that only more rules would increase safety, but ultimately it is not an either/or proposition. We can actually increase domestic energy production and increase safety and environmental protection."

Among the changes outlined in the more than 80-page proposal, oil and gas drillers in U.S. waters would no longer be required to hire a third party to test safety equipment designed to reduce the risk of spills and explosions. And they would report equipment failures and other operational details less frequently to federal regulators, a BSEE spokesman said.

The rule requiring third-party testing stemmed from recommendations made by a bipartisan commission - headed by former Florida Democratic Senator Bob Graham and former Republican Environmental Protection Agency chief William K. Reilly - following the Deepwater spill.

"Design standards alone are not enough to prevent future oil spills," said Kristen Monsell, an attorney with the Center for Biological Diversity, an environmental group. "It helps if you verify the equipment is up to spec. No, it's just a situation where we're trusting the oil industry."

The proposed rollback of offshore regulations comes as President Donald Trump seeks to expand U.S. energy production, not only though expanded leasing of federal lands and waters, but also through the shrinking of environmental rules enacted under former president Barack Obama.

Even as crude production in the Gulf of Mexico holds steady, oil companies are reducing their investments in offshore fields.

Participation in federal auctions for offshore drilling rights has steadily declined over the past decade, with this year's auction for the Central Gulf region only attracting $263 million in winning bids - less than a third of what came in 2014, when prices topped $100 a barrel.

Trump is hoping to turn that around. His administration has said it will hold the largest U.S. offshore lease sale in history in March when it puts up for auction 77 million acres in the Gulf of Mexico. And the president has signaled his intent to open up drilling in the Atlantic and Arctic Oceans - despite Obama-era bans there.

In addition, BSEE said Thursday it would also reopen earlier decisions on issues such as what constitutes an equipment failure, potentially allowing companies to avoid more draconian provisions within current regulations.

"Safety experts in the offshore oil and gas industry now have the opportunity to comment on this important regulation. This 'second bite at the apple' provides an opportunity for further dialogue," said Randall Luthi, president of the trade group National Ocean Industries Association.

The proposed regulatory pullback, however, did not go as some in the industry had hoped. For instance, an Obama-era rule setting strict standards on blowout preventers - the device that failed during Deepwater - was left untouched, despite criticism from the oil and gas industry, Monsell said.

"I don't necessarily think this is the last proposed rule we'll see on this," she said.