Energy: Interior Tries to Allow Drilling Without Spilling

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Since the Deepwater Horizon accident on April 20—and the moratorium on new deepwater drilling in the Gulf of Mexico that followed it—both the oil industry and environmentalists have been waiting for the White House to issue new rules on drilling. BP’s Gulf spill showed that there were clear problems with the way offshore drilling was performed—and perhaps more importantly, with the way it was regulated. Secretary of the Interior Ken Salazar issued some immediate safety tweaks in late May, and the newly named Bureau of Ocean Energy Research and Management (BOERM) has undertaken a deeper investigation into the state of deepwater drilling, with the aim of coming to a conclusion by the official end of the drilling moratorium on Nov. 30. It hasn’t been an easy process—the oil industry and its allies have been fighting the moratorium since it was announced, and the pause in drilling has caused real economic pain to a Gulf coast already reeling from the spill (though perhaps not as much as industry alleges).

Well today Salazar brought a little more clarity to the future of offshore drilling in the Gulf—even if the moratorium on new deepwater projects remains in place for now. The Interior Department chief issued a new set of safety rules today for offshore drilling operations, specifically designed to prevent some of the problems with well cementing and blowout preventers that helped cause the destruction of the Deepwater Horizon. From Interior’s release:

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 27th 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 new rules won early praise from mainstream green groups like the Environmental Defense Fund and the Natural Resources Defense Council (NRDC). NRDC executive director Peter Lehner, who just came out with one of the first books on the Deepwater Horizon accident, calls it a good first step:

The new protections add a needed measure of transparency, oversight and certainty to the drilling process, from the well design to the way pipes are positioned and cemented in place. They require that decision-makers on rigs have proper training in offshore operations; that blow out preventers be in working order and up to the job; and that remotely operated vehicles – undersea robots – be in place at all times, along with standby crews able to guide them.

Industry groups like the American Petroleum Institute were a little less positive. But everyone recognizes that today’s rules were just an appetizer—the main course is still the deepwater drilling moratorium. In recent days BOERM head Michael Bromwich has given indications that there may be a decision to lift the moratorium relatively soon—well before the Nov. 30 deadline.

But that’s not fast enough for oil allies like Louisiana Sen. Mary Landrieu, who has put a hold the confirmation of the confirmation of Jack Lew to fill the vacant position of head of the Office of Management and Budget (OMB), and has said she won’t budge until the moratorium is lifted.  Landrieu, a Democrat, has no problems with Lew’s qualifications—she’s just using every tool at her disposal to make that happen, including leaving ensuring that OMB has no leader even as the government is attempting to begin the somewhat difficult work of putting together a budget. There’s no rules against what Landrieu is doing—or Republican Senator Jim DeMint, who has promised to block all legislation until the midterm elections. It’s just kind of a jerk move—but apparently that’s no longer a deterrent for the United States Senate.

In any case, expect a battle on both sides if and when Salazar finally lifts the drilling moratorium. As far as I can tell, there’s no way of being sure that either the industry or government would be better prepared to stop another major blowout if it happens in the Gulf—let alone in the Alaska Arctic, the next frontier for U.S. offshore drilling. It’s been more than five months since the Deepwater Horizon exploded. There were lessons to be learned—read Lehner’s book to find them—learning seems to be getting in the way of business.