Oil Spill Crude Disaster

Dec 8, 2010 4:12 PM

Bromwich: There is no unofficial oil moratorium

NEW ORLEANS (AP) - The head of the federal agency that regulates
offshore oil drilling says the government is working as fast as it
can to issue new permits to resume drilling after April's Deepwater
Horizon explosion and denied claims from some in the industry that
an unofficial drilling moratorium remains.
"We are not slow-walking the applications in any way or for any
reason," Michael Bromwich said Wednesday, addressing a gathering
of oil and gas industry lawyers in New Orleans. "There is no de
facto moratorium."
Bromwich, head of the Bureau of Ocean Energy, Management and
Regulation, wouldn't predict how soon permits would be issued as he
answered questions during the International Offshore Oil and Gas
Law Conference.
"That's the 64 million dollar question for everyone," he said.
"It would be folly for me to try at this point, as we are
continuing to absorb the new rules, regulations and guidance, to
predict what those time lines will be. I will tell you that they
should be as long as it reasonably takes to make sure that
operators' applications are fully compliant. Whether that's 30 days
or 45 days or 60 days I really don't know at this point."
At the same conference, the co-chairman of a presidential
commission on the oil disaster called for the industry to police
itself by establishing a private sector "Safety Institute."
William Reilly, in remarks prepared for a midday speech, said
the commission's probe revealed a "cascade of bad decisions" that
led to the disaster. He added that there is widespread belief that
BP, Haliburton and Transocean made "breathtakingly inept"
mistakes.
"There is virtual consensus among all the sophisticated
observers of this debacle that three of the leading players in the
industry made a series of missteps, miscalculations and
miscommunications that were breathtakingly inept and largely
preventable," Reilly said.
Reilly, head of the Environmental Protection Agency under
President George H.W. Bush, said the industry has been innovative
in developing technology and techniques for deepwater drilling.
"Yet the very same players have been remarkably passive in terms
of developing a response capability equal to the task and seemingly
indifferent about developing an industrywide safety culture needed
to prevent such fiascos."
His proposed Safety Institute would be created by private sector
chief executives. While stressing the need for continued reform of
the regulatory process, Reilly said the Safety Institute should be
formed to ensure that best safety practices are being followed in
engineering and operation of rigs.
Failure to prevent another Deepwater Horizon type of disaster
likely would result in a public uproar. "The interest group that
could most threaten the future viability of offshore drilling is
the oil and gas industry itself," he said.
Reilly stressed that he was expressing his own opinions, noting
the presidential commission's findings are due to be reported in
January.
Earlier, Bromwich said his agency is working as fast as it can
to issue permits under new safety regulations adopted since the BP
oil disaster in April killed 11 workers and sent millions of
gallons of oil spewing into the Gulf of Mexico. He said his
revamped agency, formerly the Minerals Management Service, has
shifted personnel and resources to work on new permits.
Bromwich said new guidance to help the industry comply with
those regulations will be issued as early as this week.
The Obama administration imposed a drilling moratorium after the
Deepwater Horizon disaster. The moratorium was lifted in October
but industry watchers note a lack of new permits issued since then.
Bromwich outlined the decision-making leading to lifting the
moratorium. He said the decision came only after the administration
was certain the leak was stopped so containment resources would be
available in case of another accident, that containment technology
had improved and that new regulations were in place.
Still, Bromwich said his agency has been under great pressure as
it works to issue permits, including adapting to new regulations
while evaluating the agency's role after a complete revamp. The
former MMS was touched by scandal arising from lax oversight and a
cozy relationship with the oil companies it was supposed to
regulate.

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