The United States’ top offshore drilling regulator is calling out one of the nation’s top energy research firms, accusing IHS CERA of issuing a biased and “fundamentally flawed” report that suggested Gulf drilling projects were caught in a government permitting logjam.
The industry-funded analysis, released July 21, concluded that there was a backlog of offshore drilling permits awaiting government approval, with the delays costing coastal states jobs and tax revenues.
But Michael Bromwich, the head of the Bureau of Ocean Energy Management, Regulation and Enforcement, says the IHS CERA report presents “misleading conclusions about the current state of offshore oil and gas drilling.”
In a letter to IHS CERA Chairman Daniel Yergin, Bromwich today said the report overlooks the sweeping changes in drilling safety and environmental reviews that the government implemented after last year’s spill. That includes a mandate that oil and gas companies be prepared to contain crude from a blown-out underwater well — a requirement that industry was unable to satisfy until early this year.
“Even though all of these developments are absolutely central to understanding the pace of plan and permit approval in the period covered by your report, they are barely mentioned. The six-month period covered by your report cannot be properly understood without context, and yet your report is altogether incomplete and superficial in describing the context.”
Bromwich also points out that an initial version of the report inaccurately said new offshore lease sales were “suspended…with no clear path toward resumption.” Bromwich calls the assertion “plainly and simply untrue” because at least nine times since December 2010, the government had announced publicly its plans to sell leases in the western Gulf of Mexico in late 2011, after new post-spill environmental reviews. Just a week before the report was issued, Bromwich confirmed those plans in testimony before the House Natural Resources Committee.
Another error Bromwich cites is the report’s statement that there have been no new discoveries in the deep-water Gulf. That ignores significant finds, including Exxon Mobil’s June announcement of a new discovery in the Keathley Canyon area of the Gulf with an estimated 700 million barrels of recoverable oil.
IHS CERA did not immediately have a response to the letter.