API: Feds moving too slow on offshore drilling plans

The oil and gas industry’s leading trade group today fired a broadside at the Obama administration, accusing it of slow-walking essential offshore drilling permits and stalling domestic energy development.

“Not enough is happening to ensure the oil and gas development our nation needs,” said Erik Milito, the American Petroleum Institute’s upstream director, in a conference call with reporters.

The Interior Department’s Bureau of Ocean Energy Management, Regulation and Enforcement has approved permits for 16 deep-water drilling projects that must satisfy new requirements for containing runaway wells. It also has signed off on 12 offshore exploration plans after completing new site-specific environmental assessments of those drilling blueprints.

But while some exploration plans and drilling permits have been issued, Milito said, that permitting continues on an unacceptably “slow track.”

Milito said there is widespread confusion among oil and gas operators about how they can satisfy new rules and requirements imposed since last year’s Deepwater Horizon disaster — including more robust calculations of the possible worst-case discharge from a blown-out well and the containment mandate.

Earlier this month, the ocean energy bureau unveiled a checklist designed to shed more light on the required components in drilling permit applications.

That move came at the request of oil and gas companies, including some whose initial submissions were deemed incomplete. But Milito said it didn’t go far enough, because it didn’t provide enough granular detail about how to fulfill new requirements.

“What the industry needs is not a checklist, but clarity,” Milito said. “They aren’t providing the clarity to the industry as a whole as to what the requirements are for the specific information.” Milito said oil and gas companies want to know, “when you look at the specific requirements . . . granularly, what is it you are looking for to meet the demands of the agency?”

Milito said the confusion results in oil and gas companies who submit exploration plans and applications for permits and then see them returned by regulators for revisions or additions — a practice the industry has come to describe as the “recycling” or “ping ponging” of those proposals.

“We have seen dozens of exploration plans get recycled on average four to five times,” Milito said. ‘It should take one submission to look at that plan and say this is the information you need for this to be complete. This is the type of process that is not productive.”

One significant change that Milito cheered was the bureau’s decision to assign a single staffer to work with oil and gas companies on proposed exploration plans.

An administration source who spoke on condition of anonymity said industry officials have indicated that they have gotten the necessary guidance.

“Members of the oil and gas industry deserve and have received the clarity they have requested,” the source said. “Maybe their lobbyists should hold off on their press overtures until they’ve actually talked to their members.”

Bureau officials, including director Michael Bromwich, have said that a number of proposed permits and plans were submitted to the agency without fulfilling basic requirements.

The agency has issued guidance documents and held a workshop for more than 200 oil and gas industry representatives on developing offshore exploration and development plans.

Bromwich has stressed the agency’s commitment to rigorously examining offshore drilling proposals and ensuring the safety of those operations, given last year’s spill. Permitting may never return to pre-Deepwater Horizon levels, he has said, because the agency is doing far more thorough reviews than cursory examinations that were customary pre-spill.

The bureau also has committed to doing a site-specific environmental analysis of many proposed offshore exploration plans — a change from pre-spill treatment of those documents, when regulators commonly exempted them from environmental reviews.