Feds Revise Oil Drilling Regulations

December 26, 2017

The Wall Street Journal reports a proposal written by the Bureau of Safety and Environmental Enforcement (BSEE ) deletes the word 'safe' from part of its revised drilling safety regulations.  

The BSEE regulates U.S. offshore oil and gas operations. After the Deepwater Horizon blowout in 2010 that killed 11 people and poured 200 million gallons of oil into the Gulf, stricter safety and operations requirements were put in place to lessen the chance a similar accident could happen in the future.

BSEE's director, Scott Angelle, has said the current regulations are too broad and don't take into account that the Deepwater Horizon disaster was a live & learn opportunity for the industry.

The BSEE recently presented the White House with a revised version of what is referred to as the well-control rule (WCR). As proposed, the revision reverses those risk-reduction regulations.

The revised WCR package also happens to mean the drillers would save an estimated $900 million over the next 10 years.

Referencing the section of the current regulations that deals with drilling pressure regulations, the oil industry had asked for an elimination of a specified “drilling margin” which refers to the minimum amount of mud and fluid that must sit over a well as it is being drilled so as to guard against a surge in pressure that could lead to a blowout, as happened in Deepwater Horizon. Industry groups say modern drilling techniques and the need for flexibility argue against government setting a firm standard.

In response, the BSEE's WCR revision keeps the current requirements “mostly unchanged” from where they were set by the Obama administration, but says the agency intends to delete language that BSEE staff uses to determine if a company’s planned drilling margin was “safe” when reviewing applications to drill.

“Based on BSEE experience during the implementation of the original well control rule, BSEE has concluded that the term ‘safe’ creates ambiguity in that it could be read to suggest that additional unspecified standards, beyond those expressly stated, may be imposed in the approval of proposed drilling margins,” a preamble attached to the proposed rule reads.

By eliminating the word 'safe' and instead using terms such as "well behavior observations" and "analogous", the BSEE assumes oil drillers understand that the regulation standards are "inherently designed to promote safety". BSEE reasons that keeping the word 'safe' in the provision is redundant and "risks confusion regarding the scope of the applicable standards" - just in case a driller needs a little wiggle room while interpreting how much safety the company should invest in.

Excerpt of revised WCR here:

In addition, the revised WCR eliminates the current requirement that third-party safety inspection services who test critical safety equipment such as blowout preventers be certified by BSEE. Instead, BSEE wants to give those inspection services the benefit of their employees experience, saying those firms are "well-established" and don't need official recognition because the certification requirement “would increase procedural burdens and costs without giving rise to meaningful improvements to safety or environmental protection.”

The tax overhaul Trump signed last week includes a provision to open the Arctic National Wildlife Refuge to oil production.

Read the WSJ.com report here: