Interior secretary to oil industry: Don’t throw regulators under the bus

Interior Secretary Sally Jewell delivered a blunt message to some of the nation’s top oil industry executives during an inaugural meeting with the group on Wednesday: Don’t cast blame our way.

“I did poke them a little bit about not throwing the regulators under the bus or blaming us when there is actually shared responsibility, perhaps, when something doesn’t move forward,” Jewell said after meeting with the business leaders on the sidelines of the Offshore Technology Conference. “We don’t want to be in the way of development, but we have a job to do protecting the assets of the American people.”

The closed-door gathering included top representatives from oil companies Anadarko, BP and Marathon Oil, as well as contractors FMC Technologies, Halliburton, Transocean and Schlumberger, and the trade groups American Petroleum Institute and National Ocean Industries Association.

Some oil industry leaders have loudly complained about the pace of regulatory changes coming from the nation’s capital and pleaded for a more stable, predictable landscape. And ConocoPhillips cited regulatory uncertainties last month when the company announced it would delay its plans to drill in Arctic waters north of Alaska.

Related story: Offshore operators seek clarity on regulations

But on Wednesday, Jewell said she sensed the executives understood that the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement have worked “to be responsive to the needs of industry” even as they craft new rules, some borne from the 2010 Deepwater Horizon disaster.

“I did not sense …a reluctance to embrace regulation,” Jewell said. “What they want and what we are committed to provide is regulatory certainty, predictability (and) consistency, recognizing that different circumstances warrant different ways of behaving.”

Jewell said her main message to the executives was “that we need to work together — not at odds with each other.”

Federal drilling regulators “want to listen to industry (and) we want to bring in the best of all the science,” Jewell added.

An industry representative familiar with the discussion said Jewell was personable and “very knowledgable about certain aspects of the oil and gas industry.”

“She reassured the participants that the administration understands the importance of the offshore oil and natural gas industry to the nation’s economy and energy security,” the representative said.

Some industry leaders have been wary of Jewell, whose most recent role as the chief executive of Recreational Equipment Inc. gives them little sense of how she will manage the potentially competing interests of allowing energy development on federal land while preserving it for future generations. At the same time, they have been optimistic that Jewell’s oil background will translate into a better understanding of technology and industry needs.

As a mechanical engineer in the late 1970s and early 1980s, Jewell worked for Mobil Oil Co., in Oklahoma and Colorado, including on at least one hydraulically fractured well. Before that, she focused on pipeline issues for GE in Alaska, specifically examining the best ways to bury pipeline in that icy landscape without melting the surrounding permafrost.

Jewell’s meeting with the executives came just before the former oil industry engineer weaved through hundreds of displays on the OTC floor and checked out the drilling and oil production equipment for sale. The last interior secretary to visit the conference was Gale Norton a decade ago.

She stopped by the booths for Cameron, Tesco, Schlumberger, and Survival Systems International.

At the Cameron display, Jewell took the joysticks of a drilling simulator and listened as Schlumberger’s Laura Gustavson described the benefits of a One Subsea system capable of modeling reservoirs in the Gulf of Mexico.

Standing in front of a multiple control line running system on display at Tesco’s booth, Jewell probed the equipment’s capability. “You could put hydraulic lines on this?” she asked Errol Sonnier, a deepwater completions consultant for Tesco. “Is most of the production equipment electrically activated?”

Schlumberger workers showed Jewell a radial probe used for formation testing. In one case, said Schluberger’s Chris Tevis, the eight-inch device revealed that an oil company could still eke hydrocarbons out of a reservoir once thought to be dry. “They extended the reservoir by a few 100 feet, just by having this information,” Tevis said.

At the Survival Systems International booth, Jewell hopped on a ladder and peeked inside an lifeboat capable of safely housing 60 passengers in an emergency.

Jewell noted the evolution of drilling and production technology since her days in the oil patch.

“Now that I look at the equipment that is out there, it’s clear that the basics are the same, but the equipment is a lot bigger, it’s a lot more sophisticated (and) it is using computer technologies. The roustabouts aren’t getting dirty like they used to, with chains flying around,” Jewell said. “But the principles are still the same.”

Related story: Jewell visits offshore drilling rig, production platform

Oil companies also are moving into deeper and deeper frontiers offshore, Jewell noted. Offshore areas once considered beyond reach now are accessible with innovations in equipment and materials capable of withstanding high pressures.

“The definition of deep is evolving. What we’re in now wasn’t even contemplated as being possible when I was working in the industry,” Jewell said.

But as drilling technology evolves, it is essential regulators keep pace, Jewell said.

“Our philosophy is to really stay right with the industry as it grows and develops and develops new ways of keeping the environment clean and people safe while also supporting oil and gas development, which is a very important driver of the energy independence of the country,” Jewell said.