WASHINGTON — The oil industry is blasting an Obama administration plan to better safeguard offshore exploration, arguing that the Deepwater Horizon-inspired proposal imposes costly and “ill-advised” mandates that could make some wells impossible to drill.
The Interior Department’s Bureau of Safety and Environmental Enforcement rule, unveiled in April, aims to prevent a repeat of the 2010 Gulf of Mexico disaster by codifying a number of voluntary steps that companies have already taken to better keep offshore wells in check.
But it goes further in laying out specific mandates for the design of wells and the emergency devices known as blowout preventers that are meant to serve as a final protection against uncontrolled surges of oil and gas.
A coalition of oil trade groups insists that the proposed rule goes too far by establishing “prescriptive new requirements that would impose unjustified economic burdens, discouraging economic growth (and) innovation” often without a clear rationale.”
And the groups — including the American Petroleum Institute, Independent Petroleum Association of America and International Association of Drilling Contractors — insist that some of the proposed mandates “would introduce new risk rather than reduce (it).”
More than a dozen oil companies and drilling contractors joined in the pushback, filing public comments that were deeply critical of BSEE’s well control rule.
Exxon Mobil Corp. argued that the proposed mandates would do more harm than good, adding “new potential sources of failure” to “safely run” operations.
“Risk would be increased by technically unsubstantiated and overly prescriptive rules that would prevent operators from applying the most fit-for-purpose well design and operations to the given risk profile of a drilling opportunity,” the company said. “The proposed regulations would significantly increase the size, cost and footprint of a drilling facility and in many cases could not be installed or retrofitted on existing drilling and production facilities.”
The industry focused much of their criticism on a proposal to define the “safe drilling margins” in which companies can operate. A safe drilling margin is designed to ensure that drilling fluids exert enough pressure inside a well to keep oil and gas from flowing out of the underground formation — without exerting so much pressure they fracture that rock itself.
Wells that have wide drilling margins are generally easier wells; narrow margins make for more complex operations.
Under current regulations, operators must maintain a safe drilling margin, as identified in their drilling permits, but federal regulations don’t define exactly what it should be nor what data should be factored into calculating it.
Under the new proposal, the safe drilling margin would be codified at a half pound per gallon between the weight of drilling fluids and the amount of pressure a formation can withstand before fracturing.
One criticism of the management of BP’s failed Macondo well was that the drilling margin was analyzed without data from deep underground. Under the new proposal, that would change; oil companies would be required to calculate the drilling margin using downhole data, including measurements indicating the weakest amount of pressure that might cause a crack in the formation.
Companies would have to stick within the safe drilling margin or halt operations.
The industry trade group coalition said that nearly two-thirds of offshore wells drilled since June 2010 in U.S. waters would not be possible under the proposed new safe drilling margin requirements.
“The current risk-based approach to managing drilling margin, in combination with existing regulatory oversight, has been demonstrated to safely and economically drill wells having narrower drilling margins than (those that would be allowed),” the coalition said.
“Given that hundreds of wells have been successfully and safely drilled with drilling margins smaller than would be allowable under the proposed rule, it is not clear what problem the rule is trying to solve,” the groups said.
Chevron noted that it has drilled 163 well bores in the Gulf of Mexico since Macondo, following industry standards that have been updated since the 2010 spill. But some of the proposed requirements don’t build on that “significant progress,” Chevron said, and instead “would only impose an increased and capricious burden that may make some wells uneconomical, resulting in abandoned or undrilled projects and stranded reserves.”
Environmental groups said they were disappointed that the proposal does not require companies to use blowout preventers with a second set of shearing rams to increase the chances the blades can slice through drilling pipe and debris to seal off an open well.
A second shear ram “would add redundancy to a key spill prevention tool and reduce the probability of a blowout preventer failing to seal (the well),” said Oceana, Friends of the Earth, and other groups.