Two years following the largest oil spill in offshore history, activity levels are experiencing an uptick in the U.S. Gulf of Mexico (GOM) once again, according to a panel speaking at KPMG’s 10th Annual Global Energy Conference in Houston on May 17.
The BP-operated Macondo well blowout and subsequent oil spill that occurred in 2010 after Transocean’s Deepwater Horizon semisubmersible rig sank in water more than a mile deep in Mississippi Canyon 252 “changed everything,” and a new era for operating in the GOM has ensued.
Along with a more vigilant industry focused on safeguarding offshore E&P, “the primary vector of change is now one whereby management is guided by regulation,” said Kevin Ewing , natural resources and environmental issues advisor and partner, Bracewell & Guiliani , Washington, D.C.
Immediately following the tragic well incident, operators “leaped into regulatory mode,” developing risk mitigation strategies that have since reshaped the traditional business model, according to the panelists.
At the core of such contingency plans are better practices, greater transparency and above all, improved safety requirements, guided by the new regulatory agencies formed from the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).
But while oil and gas development on the U.S. Outer Continental Shelf continues in step with a previously established mandate that has “stayed the same decade after decade,” Ewing said, “its contextual interpretation has become more stringent” for GOM operators alongside government enforcement of oil and gas management post-Macondo.
Ewing likened the change to a “philosophical shift” that has significantly impacted the upstream oil and gas industry as well as how government’s increased involvement and evolving role will continue to affect the way business is conducted in the region. “What has changed is that Washington is now in your knickers, and they’re not going to leave,” he added.
According to Ewing, the former BOEMRE (now the Bureau of Safety and Environmental enforcement [BSEE] and the Bureau of Ocean Energy Management [BOEM]) was regarded as less of a regulatory entity and more of a public service.
As its nomenclature suggests, the oil and gas regulatory arm “is no longer a service, it’s a bureau,” he said. “It’s prophetically named. We’ve gone from service to bureaucracy, and management is now through management and enforcement.”
And that, he emphasized, is the “Brave New World” under way in the GOM.
A key operating factor in this new world order, according