The federal government will expand its oversight of coastal drilling to include new regulation of oil field service firms, rig suppliers and other offshore contractors, a top Obama administration official said today.
Michael Bromwich, the head of the Bureau of Ocean Energy Management, Regulation and Enforcement, said a broad internal review of current laws concluded that the agency has “broad legal authority over all activities relating to offshore leases, whether it is engaged in by lessees, operators or contractors.”
“We can exercise such authority as we deem appropriate,” Bromwich told the Offshore Technology Conference in Houston.
Bromwich has floated the idea of expanding the ocean energy bureau’s reach beyond oil and gas companies before — but he had been unsure whether the move would require Congress to go along with the plan. According to the administration’s internal legal review, congressional action isn’t necessary; the agency already has the authority.
Historically, the federal offshore energy agency — previously known as the Minerals Management Service — has focused on leaseholders and operators. Other federal agencies, such as the Coast Guard, separately regulate entities such as drilling rigs and their owners. The benefit of the traditional system, Bromwich acknowledged, is that “it served to preserve clarity and the singular responsibility of the operator.”
But the drilling chief said that he was “convinced that we can fully preserve the principle of holding operators fully responsible — and in most cases solely responsible — without sacrificing the ability to pursue regulatory actions against contractors for serious violations of agency rules and regulations.”
Bromwich insisted the Obama administration would be “careful and measured in extending our regulatory authority to contractors.”
Later, he told reporters that the move, while “important,” wouldn’t change much in the day-to-day practice of the ocean energy bureau. Essentially, it is a chance to step in — and impose fines or take other enforcement actions — whenever a contractors’ conduct is “egregious enough.” Bromwich said.
“The practice may not differ that much” from what we are doing now, Bromwich said. Although the agency may formulate more guidance for its oversight of service firms and contractors, Bromwich said there are no plans for new regulations and rulemaking to go along with it.
The presidential commission that investigated last year’s oil spill concluded that poor communication among contractors on the Deepwater Horizon rig contributed to the disaster.
Sean Grimsley, the panel’s deputy chief counsel, said that there was an absence of a sense of real responsibility at the Macondo well.
“One of the problems is that there are upwards of 20 plus contractors out here on one of these rigs,” Grimsley said. “What we saw here was that different contractors were making critical decisions, often times without communicating what they had learned to other decision makers.”
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