Bromwich at OTC 2011: Feds will regulate offshore contractors *updated*

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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13 Comments

  1. Luis

    Why have a congress, if the bourocrats and an imperial presidency hold all the power with no input from congress? FCC and web regulations anyone?

    #1
  2. KB

    Yeah…like they know anything about it.

    #2
  3. harr1234

    Please keep these liars and thieves regulated. We do not want another BP Disaster in the Gulf.

    #3
  4. MsRadoo

    Drill in South Dakota!

    #4
  5. Darryl

    “Please keep these liars and thieves regulated.”

    Do you mean the executive branch?

    #5
  6. Godiva55

    Please keep these liars and thieves regulated.
    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
    YES the feds need STRICT regulation and bear watching ALL THE TIME.

    #6
  7. Frank

    Mindboggling what this administration believes they can do. No where in the Constitution is there authority for the executive branch to have these regulatory agencies. Time to throw BO out and his wife too.

    #7
  8. Godiva55

    “We can exercise such authority as we deem appropriate,” Bromwich told
    +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
    So, all those creepy emails I received about how Obama and his czars are going to bypass Congress, take over and turn us all commie, are correct?

    #8
  9. James

    The will only regulate American Drilling…not Brazilian…

    #9
  10. OilPatch41

    This agency was created by order of the Secretary of Interior “Without” congressional approval. I would bet that the majority of the agencies that are issuing regulations that are enforced as “Law” have been created by some cabinet head without any input from congress.
    Example of government out of control. Time to reign in the regulators and the people who think they can make law by executive order.

    #10
  11. MsRadoo

    Agreed, OilPatch. We have way too much government, and way too many petty bureaucrats “assuming” power.

    #11
  12. BOB

    I want more more more i tell ya. More regulation

    #12
  13. field hand

    Ask OB why he gave 2 billion to Brail to help with their deep water drilling. 2 billion we had to borrow from china!!!!

    #13