Thursday, September 09, 2010

DOI Review Calls For Offshore Oil & Gas Operations Reforms

Sep 8: Department of Interior (DOI) Secretary Ken Salazar announced that a team led by senior officials at DOI, including Interior's Inspector General, have completed a review of offshore oil and gas oversight and regulation and have delivered a set of recommendations that reinforce and expand on ongoing reforms being carried out by Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) Director Michael Bromwich. The report of the Outer Continental Shelf (OCS) Safety Oversight Board, which Secretary Salazar established immediately following the explosion of the Deepwater Horizon rig, provides recommendations to strengthen permitting, inspections, enforcement and environmental stewardship. Director Bromwich announced that BOEMRE has developed an implementation plan for the recommendations, many of which are already underway or planned.

    Secretary Salazar said, "I tasked the OCS Safety Board with taking a hard, thorough look -- top to bottom -- at how this department regulates and oversees offshore oil and gas operations and provide me their honest and unvarnished recommendations for reform. The report is what I was looking for: it is honest; it doesn't sugarcoat challenges we know are there; it provides a blueprint for solving them; and it shows that we are on precisely the right track with our reform agenda. We are absolutely committed to building a regulatory agency that has the authorities, resources, and support to provide strong and effective regulation and oversight -- and we are on our way to accomplishing that goal."

    DOI indicated in a release that the Safety Oversight Board's findings and recommendations provide a framework to build upon reforms to create more accountability, efficiency and effectiveness in the Interior agencies that carry out the Department's offshore energy management responsibilities. The recommendations address both short- and long-term efforts that complement other ongoing reports and reviews, such as the Secretary's May 27 report to the President, the Presidential inquiry into the Deepwater Horizon oil spill and the U.S. Coast Guard-Interior investigation into the causes of the incident.

    The recommendations range from improved consistency and communication of BOEMRE's operational policies to technology improvements and day-to-day management in the field. Strengthening inspections and enforcement -- from personnel training to the deterrent effect of fines and civil penalties -- is a major focus of the recommendations. BOEMRE's implementation plan outlines the initiatives and programs that the Bureau is undertaking which address the report's recommendations, including: reorganizing MMS to address real and perceived conflicts between resource management, safety and environmental oversight and enforcement, and revenue collection responsibilities; seeking additional resources in the form of funding, personnel, equipment and information systems; ethics reforms that include the establishment of an Investigations and Review Unit and a new recusal policy to address potential conflicts of interests within BOEMRE and industry; and Inter-Agency coordination with Federal agencies related to oil spill response and the mitigation of environmental effects of offshore energy development.

    The DOI review and recommendations follow the release on September 7 of the recommendations of two U.S. oil and natural gas industry task forces on preventing oil spills, enhancing oil spill response and improving subsea well control. Those recommendations are part of a comprehensive effort led by the American Petroleum Institute (API) to strengthen all aspects of offshore safety, while continuing to produce energy and create jobs for Americans.

    The two task forces provided more than 50 recommendations. They include recommendations for quicker and more effective methods for capping a runaway well to recommendations for how to better remove oil from the water and keep it from coming ashore. In May, two other industry task forces provided recommendations to the Department of the Interior on industry operating procedures and equipment. And one of those has recently followed up with a new recommendation for offshore operators and drilling contractors to employ a well construction interfacing document that would integrate all aspects of safety management systems.

    Access a release from DOI with links to the OCS Safety Oversight Board Report and the BOEM Implementation Plan (click here). Access a release from API and link to the task force documents (click here).