Salazar announces new offshore drilling rules"

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September 30, 2010

Salazar announces new offshore drilling rules

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) is submitting to the Federal Register for publication an interim final Drilling Safety Rule that will be effective immediately upon publication

It is also submitting for publication a final Workplace Safety Rule requiring offshore oil and gas operators to develop and maintain a Safety and Environmental Management System (SEMS). A SEMS is a comprehensive management program for identifying, addressing and managing operational safety hazards and impacts, with the goal of promoting both human safety and environmental protection.

"These new rules and the aggressive reform agenda we have undertaken are raising the bar for the oil and gas industry's safety and environmental practices on the Outer Continental Shelf," said Secretary of the Interior Ken Salazar, who announced the rules today in a speech at the Woodrow Wilson International Center. "Under these new rules, operators will need to comply with tougher requirements for everything from well design and cementing practices to blowout preventers and employee training. They will also need to develop comprehensive plans to manage risks and hazards at every step of the drilling process, so as to reduce the risk of human error."

"These two rules are part of a broader series of reforms we are undertaking to reduce the risks of offshore energy operations," said Michael R. Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM). "We are substantially raising the standards for all offshore operators, and are doing it in an orderly and responsible way. We will continue to move forward with other changes and reforms in what will remain a dynamic regulatory environment. We owe the public nothing less."

The Drilling Safety Rule, effective immediately upon publication, makes mandatory several requirements for the drilling process that were laid out in Secretary Salazar's May 27 Safety Report to President Obama. The regulation prescribes proper cementing and casing practices and the appropriate use of drilling fluids in order to maintain well bore integrity, the first line of defense against a blowout. The regulation also strengthens oversight of mechanisms designed to shut off the flow of oil and gas, primarily the Blowout Preventer (BOP) and its components, including Remotely Operated Vehicles (ROVs), shear rams and pipe rams. Operators must also secure independent and expert reviews of their well design, construction and flow intervention mechanisms.

The Drilling Safety Rule is being issued under an emergency rule-making process. Director Bromwich said that BOEM will soon move forward with a standard rulemaking process that includes greater opportunity for public comment and that considers implementing additional recommendations of the Secretary's May 27 Safety Report, such as the requirement that BOP's have two sets of blind shear rams.

The Workplace Safety Rule, requires offshore operators to have clear programs in place to identify potential hazards when they drill, clear protocol for addressing those hazards, and strong procedures and risk-reduction strategies for all phases of activity, from well design and construction to operation, maintenance, and decommissioning.

The Workplace Safety Rule makes mandatory American Petroleum Institute (API) Recommended Practice 75, which was previously a voluntary program to identify, address and manage safety hazards and environmental impacts in their operations.

BOEM will undertake additional workplace safety reforms, such as requirements for independent third-party verification of operators' SEMS programs, through an additional rulemaking process that BOEM will be launching soon.

API COMMENT

API upstream director Erik Milito said the Department of the Interior should ensure its interim final offshore rule, which was issued today, establishes an effective process to improve safety performance while providing the framework needed for companies to get approval from the government for exploration and development projects. He said API would review the rule and provide analysis during the comment period. He also called for ending the deepwater moratorium:

"The rule must serve the interests of improved safety and energy development. There has to be a clear, practical, and certain process for project review that will protect the environment. We cannot have an approval process that creates unpredictable delays that could place at risk the flow of domestic energy in our country. Operators want regulations that provide certainty. Unpredictable, extended delays in permit review and approval discourage investment in new projects, which hampers job creation, reduces revenue to the government, and restricts energy production.

"Getting a good offshore safety rule in place is critical to the nation's energy future. The Gulf and other parts of the nation's offshore areas are vitally important to helping meet the nation's future energy needs. The rule will affect every offshore energy project for years to come. It has to be right.

"We also still have the issue of the Gulf deepwater moratorium. Every day the moratorium remains exacts an economic penalty on the people of the Gulf and on our nation. The costs are already too high. We continue to urge the government to end it as soon as possible."

For a fact sheet on the Drilling Safety Rule, click here.

For a fact sheet on the Workplace Safety Ruleclick here


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