The U.S. Interior Department has proposed eliminating some safety regulations for offshore oil and gas drilling that the Obama administration put in place after BP’s massive Gulf of Mexico (GoM) oil spill, a move it said would reduce “unnecessary burdens” on the industry.
The Interior Department’s Bureau of Safety and Environmental Enforcement (BSEE), which regulates offshore drilling, said its proposal to scale back some of the Obama-era requirements was in line with the Trump administration’s goal of “encouraging increased domestic oil and gas production by removing regulatory hurdles.”
The regulation, called the Production Safety Systems Rule, addresses safety and pollution prevention equipment, subsea safety devices and safety device testing for oil and gas production on the U.S. Outer Continental Shelf. BSEE said its initial regulatory impact analysis estimates that the proposed amendments would reduce industry compliance burdens by at least $228 million over 10 years.
One of the safety provisions BSEE plans to remove is a requirement for operators to get a third party to certify that safety devices work under extreme conditions.
During the BP spill, one of these devices, a BOP, failed to work. The 2010 Deepwater Horizon rig explosion in the GoM resulted in the deaths of 11 workers and led to the largest oil spill in the history of U.S. marine oil drilling operations. BP paid out about $60 billion in fines and cleanup costs in the wake of the disaster.
The proposal also would revise some oil production safety system design requirements.
Industry groups welcomed the opportunity to give more input into how offshore drilling is regulated.
Randall Luthi of the National Ocean Industries Association said the proposal presented an “opportunity for further dialogue, discussion and debate.”
However, environmental groups warned that the proposal puts the U.S. at risk of another major offshore oil spill.
“By tossing aside the lessons from the Deepwater Horizon oil spill, Trump is putting our coasts and wildlife at risk of more deadly oil spills. Reversing offshore safety rules isn’t just deregulation, it’s willful ignorance,” said Miyoko Sakashita director of the oceans program at the Center for Biological Diversity.
The comment period for the proposal, which was published in the Federal Register on Dec. 29, ends Jan. 29.
Brazil Authorizes State Company PPSA To Sell Presalt Oil, Gas
Brazil has set out provisional rules for Pre-sal Petroleo SA (PPSA), the state company managing contracts, to develop the coveted offshore presalt layer to market the government’s share of oil and gas.
Development of presalt, where oil is trapped under a layer of salt beneath the ocean floor, is governed by production-sharing contracts that require companies to give so-called profit oil to the government for sale by PPSA.
But before Dec. 22, no rules had been set to dictate how PPSA sells that output, which is the percentage pledged to the government after factoring in costs.
The decree published Dec. 22 allows PPSA to conclude contracts on behalf of the government with trading agents or sell the oil directly, preferably by auction.
The rules take effect immediately but require congressional approval to become permanent.