Offshore regulation critic in middle of latest Gulf well blowout

One of the biggest critics of the Obama administration’s regulation of the offshore industry since the Deepwater Horizon disaster three years ago now finds himself in the middle of a brewing firestorm as a jack-up rig continues to burn in the Gulf of Mexico after an undersea natural gas well blew out.

James Noe is executive vice president of Hercules Offshore Inc., which operates the rig that caught fire off Louisiana late Tuesday.

He also is executive director of the Shallow Water Energy Security Coalition, an advocacy group that just three months ago issued a statement that suggested regulators were being too tough on the industry. The group is comprised of exploration and development companies, drilling contractors and service companies.

“Ramping up the issuance of incidents of non-compliance for often trivial infractions is no substitute for technically substantive oversight – and threatens to take our eye off the ball on what is really important: what’s going on at the drill floor and in the well,” the group said in April.

The statement takes on new relevance now.

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A leak in a natural gas well owned by Walter Oil & Gas ignited a fire on a jack-up rig owned and operated by Hercules Offshore late Tuesday night, hours after its 44 workers had been evacuated. The two Houston-based companies have been working together with Wild Well Control, the Coast Guard and the Bureau of Environmental Enforcement to curb the uncontrolled flow of natural gas from the well.

Members of Congress have seized on the latest incident involving Noe’s company as an indication that perhaps more needs to be done by Washington, not less.

“A new drilling well blowout in the Gulf of Mexico is raising continued questions about whether offshore drilling safety has improved, and whether new measures are needed to hold drilling companies accountable for natural gas leaks,” said Sen. Edward Markey, a Massachusetts Democrat who was a frequent critic of BP following the 2010 Gulf oil spill.

In an interview Wednesday, Noe said it is “frankly too early to say” what the appropriate regulatory response from Washington should be, if any.

“Our efforts have been focused on assisting Walter and the federal regulators with coming up with a plan to regain control of the well,” Noe said. “That’s what’s on my mind.”

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The shallow water coalition was launched after the BP Macondo well blowout, when authorities imposed a moratorium on drilling operations that was followed by an extended period of time during which the issuance of new permits was very slow.

Even in light of the latest episode, Noe said his group advocates a regulatory environment that “creates certainty and clear rules of the road in the Gulf so that companies can conduct safe and environmentally responsible operations in a predictable manner.”

“The underlying rationale for regulating Gulf energy activity has never been questioned,” he said.