Highlights Need for Cooperative Effort to Restore Public Confidence in Offshore Drilling
Scottsdale, AZ — Today, BOEMRE
Director Michael R. Bromwich delivered the keynote address at
the National Ocean Industries Association annual
meeting in Scottsdale, AZ. Director Bromwich stressed that BOEMRE
will remain aggressive in enforcing safety and environmental
regulations. He called for cooperation between industry and
government to improve the safety of deepwater drilling.
Director Bromwich’s remarks, as prepared for delivery, are below:
Good morning. Thank you very much for inviting me to be with you
here today.
As many of you know, I took over the
Bureau of Ocean Energy Management, Regulation and Enforcement a
little over four months ago. Since that time, I have had the
opportunity to meet with many of you in person – and with some of
you on multiple occasions. Among the topics I have discussed with
you individually and in groups, especially over the past two weeks,
is the topic I have been asked to address today – the path forward
after Deepwater Horizon.
I think today’s event is particularly
fitting for such a discussion. In this room are gathered
representatives of companies that specialize in a broad range of
activities across the spectrum of the oil and gas industry, from
drilling to production, from engineering to marine and air
transport, from offshore construction to equipment manufacture and
supply, and from telecommunications to finance and insurance.
And we all have at least one thing in
common: an interest – and a duty– to ensure that offshore drilling
in the future will be done in a safe and environmentally responsible
manner.
The explosion and sinking of the
Deepwater Horizon rig – just over 6 months ago – was a sobering
reminder of just what is at stake. The blowout and subsequent fire
took the lives of 11 people, injured many others, and spewed
millions of barrels of oil into the Gulf of Mexico for close to
three months. The oil spill jolted the nation, surprised many who
believed that such a spill could not occur, and is an event that
will have lasting consequences on the entire Gulf region.
What do we know in the aftermath of
the Deepwater Horizon? Multiple investigations are under way to
determine the root causes of its failure. And even though the full
and final verdicts from those investigations are not yet in, it has
become abundantly clear that among the causes were fundamental
shortcomings in drilling safety practices. After those shortcomings
contributed to the explosions, we self-evidently did not have the
means and the know-how to contain a deepwater blowout in a timely
and reliable manner – the unforgettable video of oil continuing to
flow from the wild well for almost three months bore witness to
that. And spill response capabilities were similarly inadequate to
clean up the massive quantities of oil before it reached the shore. In other words, industry was not prepared. We as a country were not
prepared. For 30 years, while drilling technologies became more
sophisticated, safety practices and equipment lagged behind, as did
techniques and resources for spill containment and spill response.
That was and is unacceptable – and we
at BOEMRE are working very hard to change it. My team and I have
been working hard over the past few months to restore public
confidence in oil and gas drilling on the OCS. Together with
Secretary of the Interior Ken Salazar, we are undertaking the most
aggressive and comprehensive reforms of offshore oil and gas
regulation and oversight in U.S. history. This includes the
comprehensive reorganization of the former Minerals Management
Service, as well as the implementation of tougher standards for
drilling equipment, safety practices, and environmental safeguards.
Today, I will discuss the major
reforms that we have implemented and highlight some areas that
require additional work. But before I do that, I want to emphasize
what should be obvious -- our work at the Department of the Interior
is only part of the solution. The other part involves you. Moving
forward, it is imperative that industry and government work
together, along with our colleagues in the academic world and other
stakeholders, to ensure that safety, containment and response
mechanisms catch up with advances in drilling technologies. The
road ahead is challenging, but I am confident that together, we can
– and will – make offshore drilling safer.
Before discussing some of the
specific reforms that are underway, let me begin by highlighting the
broad progress that we have made in recent months—progress that
informed Secretary Salazar’s recent decision to lift the moratorium
on deepwater drilling nearly two months ahead of its original
schedule.
When the original moratorium was
imposed in May, it was a necessary step to give the government and
industry time to evaluate the potential causes of the blowout and
spill, and begin to put in place additional safeguards that would
drive down the risks of similar spills in the future.
In July, while the moratorium on
deepwater drilling was in effect, Secretary Salazar asked me to
gather additional information about the state of drilling and
workplace safety, containment, and response mechanisms. I conducted
eight public forums across the country – six of them in the Gulf of
Mexico. Some of you in this room participated as panelists in these
forums, and I want to thank you again for your valuable
contributions.
A total of 61 experts from the
academic community, the oil and gas industries, conservation and
environmental groups, and local businesses provided thoughtful and
valuable information about drilling and workplace safety, well
containment, and oil spill response, as well as other issues related
to offshore drilling.
BOEMRE also received hundreds of
written comments from the public, and I held dozens of individual
meetings with stakeholder groups. We also reviewed a number of
reports and other documents that became available during this time.
At the end of an intense 45-day
fact-gathering process, I prepared a report to the Secretary that
described the advancements that had been made and outlined
recommendations on moving forward. The Report concluded that
sufficient progress had been made on the constellation of issues
that originally supported the moratorium to justify lifting it more
than two months ahead of the November 30 expiration date.
What had changed that allowed us to
feel comfortable with that decision? First, containment capabilities
had improved – industry had developed a number of containment
mechanisms intended specifically for use in deepwater. Going
forward, we expect further improvements. As you know, the five
major oil and gas companies have committed to contributing resources
to develop a permanent inventory of containment resources that will
be available in the event of future deepwater blowouts.
Second, with the Macondo well
permanently plugged, a significantly greater number of spill
response resources became available in the event another spill took
place.
Finally, and most importantly, we
have implemented a number of new rules and regulations, which have
become effective immediately.
With that as background, I want to
make a few remarks about some of the specific reforms that are
underway.
We have raised the bar in the
drilling and production stages for equipment, safety, environmental
safeguards, and oversight – and we will continue to do so in the
coming months as additional information about the causes of the
Deepwater Horizon blowout become available.
More specifically, we announced two
new rules last month that raise the bar further for the oil and gas
industry’s safety and environmental practices on the Outer
Continental Shelf. One of these rules strengthens requirements for
safety equipment; the other improves workplace safety by reducing
the risk of human error on drilling rigs and platforms.
The first rule, the Drilling Safety
Rule, is an emergency rulemaking that puts in place tough new
standards for well design, casing and cementing and well control
equipment, such as Blowout Preventers. Operators are now required
to obtain independent third-party inspection and certification of
each stage of the proposed drilling process. An engineer must also
certify that blowout preventers meet new standards for testing and
maintenance and are capable of severing the drill pipe under the
pressures anticipated for the well.
The second rule we implemented is the
Workplace Safety Rule, which aims to reduce the human and
organizational errors that lie at the heart of many accidents and
oil spills. Operators now are required to develop a comprehensive
safety and environmental management program that identifies the
potential hazards and risk-reduction strategies for all phases of
activity, from well design and construction, to operation and
maintenance, and finally to the decommissioning of platforms. Although many companies had developed such Safety and Environmental
Management Systems on a voluntary basis, many had not. And our
reviews had demonstrated that the percentage of offshore operators
that had adopted such programs voluntarily was declining.
These new policies substantially
raise the standards for all offshore operators.
While we have accomplished quite a
bit and our reform agenda is moving fast, our work is far from
complete. In the near future, BOEMRE will proceed through the
standard rulemaking process to require additional safety measures,
including additional requirements for Blowout Preventers (BOPs) and
remotely operated vehicles (ROVs).
The Bureau will also consider
additional workplace safety reforms through the rulemaking process,
including requirements for independent third-party verification of
operators’ SEMS programs.
But we won’t stop there. We will
continue to analyze information that becomes available, including
the findings and recommendations of the ongoing investigations into
the causes of the Deepwater Horizon spill– and we will implement
reforms necessary to make offshore oil and gas production safer,
smarter and with stronger protections for workers and the
environment.
We are also taking steps to
strengthen BOEMRE’s inspections program. Over the coming year, we
anticipate adding scores of inspectors and engineers to our staff. Yesterday, I completed a four-day tour of universities in the Gulf
region with strong petroleum engineering programs. In the course of
four days, we received more than 50 applications from the students
at the schools we visited. We are also reaching out to retired
engineers with an interest in serving their country. My hope is
that we can add as many as 200 new inspectors, engineers,
environmental scientists, and other key staff to support our agency
in carrying out its important oversight functions.
Finally, we will continue moving
forward with the reorganization of the former MMS. In its place, we
are creating three strong, independent entities to carry out the
missions of promoting energy development, regulating offshore
drilling, and collecting revenues. In the past, these three
conflicting functions resided within the same bureau, creating the
potential for internal conflict and an increased risk of a
pro-development bias. This will no longer be the case.
The revenue collection arm of the
former MMS has already become the Office of Natural Resources
Revenue. In the next year, the offshore leasing and regulation
programs will also become separate, independent organizations.
To address conflicts of interest, we
have also issued a tough new recusal policy that will reduce the
potential for real or perceived conflicts of interest. Employees
must notify their supervisor about any potential conflict of
interest and request to be recused from performing any official duty
in which such a conflict exists. Thus, our inspectors will be
required to recuse themselves from performing inspections of the
facilities of former employers. Also, going forward, every BOEMRE
employee must report any attempt to influence, pressure or interfere
with his or her official duties.
All of these measures will help us
ensure the rigorous, unbiased oversight of offshore drilling.
Our challenge in the months and years
ahead is to ensure that the current momentum for developing
state-of-the-art safety, containment, and response capabilities
continues. It is imperative that as we move forward toward safer
and more environmentally responsible drilling, we do it together. Government, industry, and the best minds in our universities must
collaborate on ongoing research and development to create
cutting-edge technologies in areas such as well condition sensor
capabilities and remote BOP activation, among others. Government
and industry must also work together to establish the necessary
procedures and structures to address containment in the case of a
blowout. It is critical to ensure that, in the event of a blowout,
containment resources are immediately available, regardless of the
owner or operator involved. These are goals that we must pursue
aggressively.
Going forward, it is my hope that
industry and government will continue to cooperate as we forge ahead
toward safer, more environmentally responsible drilling in the Outer
Continental Shelf.
Thank you for your time and
attention.