Federal regulators today launched a streamlined process for vetting offshore drilling permits in response to complaints from oil and gas companies that the government’s previous system was unwieldy.
The Bureau of Ocean Energy Management, Regulation and Enforcement also revealed a checklist for examining those drilling permit applications, which oil and gas companies can use to make sure their own proposals are in order before they are filed.
The document is meant to broadly outline the main components that oil and gas companies must include in their permit applications. Michael Bromwich, the ocean energy bureau director, promised the checklist at the Offshore Technology Conference last month. He said the changes would give oil and gas companies greater clarity.
“We are constantly looking for ways to create a smarter, more efficient, and more transparent permit review process,” Bromwich said in a statement. “Our goal is to make the process of submitting permit applications easier, reduce the time it takes to review permits and improve BOEMRE’s communication with operators during the permit review process.”
Industry leaders have implored regulators for more clarity about the permit applications, in some cases asking for blueprints to guide their proposals. Some offshore operators who snagged the first post-spill deep-water drilling permits also fielded requests from competitors wanting a glance at their applications.
Before last year’s Gulf spill — and the adoption of new safety and environmental mandates governing offshore oil and gas development — deep-water drilling applications frequently were less than 100 pages long. Now, operators say they are filing permit applications with thousands of pages, even before they add the detailed plans for containing blown-out deep-sea wells using systems from the Marine Well Containment Company or the Helix Well Containment Group.
The sheer size of the applications has made them difficult to manage, said George Morris, chief operating officer of Houston-based ATP Oil & Gas Corp.
“We went from 39 pages to 3,900 pages on a permit,” Morris said. “It’s just volumes of paper, and because it’s volumes of paper, you need to make sure everything is correct, and it takes a lot of time to get these out.”
Under new procedures announced today, ocean energy bureau staff will fully examine applications to make sure they are complete before they launch a substantive review of proposed drilling projects. The goal is to identify any lapses early on, rather than identifying omissions during the detailed analysis of a proposal’s substance.
Agency officials also hope the change will reduce the number of times permit applications are returned to operators as incomplete. “BOEMRE personnel currently spend significant time reviewing incomplete permit applications and sending the applications back to operators multiple times before receiving a complete application,” said a bureau spokesperson. “This wastes precious time and staff resources and has proved frustrating for agency staff and operators alike.”
According to oil and gas companies that have have secured deep-water drilling permits, permitting officials at BOEMRE now may be deep in the details of a proposal when an omission is discovered that forces the application to be returned to the operator for more information.
The government today also outlined its priorities for processing permit applications, with complete proposals for ongoing operations (such as sidetracks or deeper exploration of an existing well) getting the most urgent attention. Applications deemed complete are next in the queue, followed by those that aren’t quite ready for prime time.
Proposals to drill emergency relief wells will still take precedence at the agency.
Oil and gas industry officials welcomed the changes.
“Much of the permitting process has been confusing and frustrating to our members, particularly in the last year,” said Randall Luthi, president of the National Ocean Industries Association. “This is a great example of what can happen when industry and the regulators communicate their frustrations and suggestions with one another.”
Luthi said the new guidance would help oil and gas companies “make their applications as thorough as possible.”
Jim Noe, senior vice president of Hercules Offshore, Inc., and head of the Shallow Water Energy Security Coalition that has lobbied for similar changes, said the government’s new plans “are instrumental to making this process function more efficiently.”
But, he said the ocean energy bureau should go a step further and prioritize applications to drill in shallow waters that generally have lower geological pressures and fewer environmental risks than deeper wells.
Unless shallow-water permits are given priority and the administration provides “clear and unequivocal” support for offshore energy development, Noe said, “our expectations that these steps will meaningfully improve the permitting process are limited at best.”
The ocean energy bureau has approved 15 deep-water projects for which companies must prove they have the resources and equipment to contain a blown-out well. Twenty-four deep-water drilling permit applications are now pending at the agency, and another 18 proposals have been returned to operators with requests for additional information about containment and other issues.
