Bromwich: Feds may block bad apples from drilling offshore

Oil and gas companies with checkered histories could be barred from drilling offshore, a top Obama administration official said today.

Michael Bromwich, the nation’s chief offshore drilling regulator, said he is still studying whether the Bureau of Ocean Energy Management, Regulation and Enforcement can do more to keep bad actors with repeated safety violations or other misconduct from drilling in the outer continental shelf.

“We continue to be interested in that issue (and) to explore that issue,” Bromwich told reporters on a conference call. As part of a broad review of agency policies, Bromwich said he is studying how to treat “operators who may have behaved badly in the past and whether they should be allowed to continue operating in the future.”

Federal regulations already allow operators to be debarred in some cases. And the government can suspend operations and apply civil penalties in response to some violations. But the disbarring authority has historically not been used, and some have questioned whether the current practice is enough to keep some of the worst performing companies away from the outer continental shelf.

Bromwich has floated the idea of being more aggressive in this area before, and some in Congress have pitched similar proposals that have not advanced far on Capitol Hill. Although more broadly written, some of those legislative proposals would have blocked BP from offshore drilling in response to the oil spill from the company’s failed Macondo well last year.

Several other countries already take a hard-line approach to bad actors, Bromwich noted.

“They have a much tougher re-qualification system than we do,” Bromwich said. “Part of what I have been trying to do recently is gather additional knowledge about what other countries who deal with similar kinds of issues have done in similar circumstances.”

Bromwich was speaking from New Orleans, where the second meeting of the Interior Department’s 15-member Offshore Drilling Advisory Committee is getting under way today.

Interior Secretary Ken Salazar tasked the panel with developing recommendations for bolstering safety rules and drilling standards. And so far, the group is focusing on four main areas: safety management systems, how to prevent spills, how to contain them when they happen and how to respond to the disasters.

Tom Hunter, the former director of Sandia National Laboratories who is heading the advisory group, said it is studying a range of subsea equipment and how workers interface with it, including instrumentation, fluid injection systems and well control systems.

“We are going to take a very broad view and see if we can ferret out some very clear recommendations (for BOEMRE),” Hunter said.

Those recommendations could flow into a forthcoming rule that would set new mandates for the blowout preventers used as a last line of defense against unexpected surges of oil and gas at wells. Bromwich has repeatedly stressed that the rule-making process would be “broad, inclusive and ambitious.”

“We anticipate this advanced notice (of proposed rulemaking) will be extremely broad. It will contemplate a large body of possible improvements and enhancements to our current regulations, including BOPs,” Bromwich said.

Although the rule will be “focused on all dimensions of drilling safety,” Bromwich added, “there really are no limits to what we are looking at.”

The agency will kick off a long process of creating the new regulations whenever it publishes an advanced notice of proposed rulemaking. That slower timetable will allow more people to weigh in on the measure’s content, Bromwich stressed.

“One of the reasons that we are taking the additional step of doing an advanced notice — as you know we’re not required to do that — is to make sure we capture the broad range of potential ideas for safety enhancement that may be out there.”

That could include mandates governing the design of offshore wells and new standards for cement barriers.

The rule also is likely to make adjustments to a drilling safety rule that was imposed last October. The ocean energy bureau has clarified some requirements of that rule already, in response to oil and gas companies that complained it set some confusing and conflicting standards.

“There may well be enhancements to that (drilling safety rule) and modifications of that that either flow out of our experience or flow out of the experience of industry or flow out of the recommendations that (the new advisory committee) makes,” Bromwich said. “It may well be that there are specific items that we’ve already issued rules on that we may want to change, modify, enlarge.”

Bromwich’s plans may cause heartburn for some industry leaders, who have complained about the shifting regulatory landscape since last year’s spill and insisted that oil companies need more certainty to plan investments.

Bromwich also said:

  • the reorganization of the former Minerals Management Service, and the final breakup of the ocean energy bureau he heads into two separate agencies is on track to meet its Oct. 1 deadline. At that point, BOEMRE officially will be carved into the Bureau of Safety and Environmental Enforcement and the Bureau of Ocean Energy Management. “There will obviously be . . . some loose ends that will need to be dealt with after Oct. 1,” Bromwich said, “but we are in many ways ahead of schedule in the reorganization.”
  • he is actively recruting candidates for new positions in the safety and environmental bureau as well as for offices in Alaska and the Pacific Coast.