Everyone involved in the US Gulf of Mexico deepwater sector must surely have heaved a sigh of relief when, on October 12, President Barack Obama said the temporary six-month moratorium on deepwater drilling had been lifted.
However, many are going to have to be patient as rigs will have to undergo new inspection and permitting procedures before companies can start drilling.
Interior Secretary Ken Salazar made encouraging grunts, saying that there should be drilling in the gulf “very soon”.
He said the agency responsible for new permits (bear in mind that the former MMS has been broken into several new entities in a bid to make the system more effective) is “open for business” and would be taking applications for new permits and processing them according to new regulations and guidance issued in the six months since the Deepwater Horizon spill.
I am of course referring to the Bureau of Ocean Energy Management (BOEM).
In essence, Salazar says drilling in waters deeper than 152m (500ft) can begin again if rig operators can demonstrate they are complying with new safety regulations in effect since the April 20 disaster.
Required will be a certification to the government by the CEOs of rig operating companies that they are in compliance with all safety regulations.
Members of the industry must, he said, demonstrate as well that they have the requisite equipment to contain a deepwater-well blowout.
In the light of what has happened over the past several months, I asked Bill Campbell, who carried out the deep research behind the Energy feature on the Deepwater Horizon disaster carried in our September edition, what he thought of the new safety regime being implemented.
The essence of his response was that they marked a welcome move in the right direction.
“In simple terms, I view the US proposals as a shift from a reactive safety regime to a more proactive regime,” he told me.
“That is, dealing with the risks up front and not allowing these to reach intolerable levels rather than reacting to the consequences of intolerable risk after the event.
“Although the moratorium is to be lifted, I don’t see this as a green light for the industry to start drilling the day after tomorrow.
“Any operator will require time and significant input to demonstrate compliance with these new rules.”
But he clearly has reservations. In particular, how an operator will deal with the worst-case scenario – that despite all the planned improvements that due to human error, or otherwise, how he will deal with a Deepwater Horizon-type of situation and be able to contain and restrict the resulting pollution at the locality of the installation and all this within a reasonable time frame.
“Given the costs, equipment and significant resources necessary to tackle worst-case scenarios will in essence restrict drilling in deepwater to the big players, and even they will need to consider whether the risks to their business are acceptable in so doing,” he said.
Don’t forget, it is the big players that are ploughing a billion or so “greenbacks” into a mega-swat capability to deal with, the gods forbid, another Deepwater Horizon-style disaster. I’ve not yet seen an explanation as to how smaller players get to be members of this super-exclusive club. But the presumption is that the capability will be there to serve all.
So, six months after the Macondo blow-out, the US has found a way forward … and in seeking to regulate deepwater drilling more effectively, it has drawn closer to the significantly more rigorous approach applied here in Europe. I especially refer to the UK and Norway, both of which long ago learned their harsh lessons out there in the North Sea.
And yet, six months on, at least one idiotic senior official in Brussels wants drilling in EU waters stopped until the causes of the Macondo disaster are fully understood from the inquiry currently in train in Houston.
Early last month, the head of the EU Energy Commission, Gunther Oettinger, said in a draft proposal that was due to be submitted to the European Parliament for debate, “the commission reiterates its call upon the member states to suspend the licensing of complex oil or gas exploration operations until technical investigations to the causes of the Deepwater Horizon accident are completed and the European offshore safety regime has been reviewed”.
It continued: “Licensing stands out as the first key tool to ensure the safety of new drillings in complex environments. The licensing regime needs to be backed up by an unequivocal liability regime.”
To come into effect, the proposal must be approved by all 27 member states.
It was reported in the media that the “27-strong board of the bloc’s executive agreed” the Oettinger proposal.
It was claimed, too, that the commission vice-president, English baroness Catherine Ashton, expressed reservations during the meeting but did not oppose the plan.
Oettinger came out in favour of such a ban in the summer, but the European parliament last week rejected the merits of a ban.
Fortunately, the European parliament rejected the call for an EU deepwater moratorium. However, this was a narrow victory, and the 323 to 285 is apparently not binding, even if it sends a supposedly clear political signal to the faceless Eurocrats who seek to control our lives.
But what gets me is that Oettinger should not have been so stupid as to try to impose a ban as there is no current provision in EU law to enable an EU body to declare a moratorium.
Not only that, I’ve long understood that the EU was told long ago that it has no right to interfere in the UK’s offshore industry.
And then I came across this gem of a quote from a European Commission official the other day, where he conceded: “We have no legal competence to tell the UK or anyone else what to do. We can just ask kindly.”
Really? I would say that Oettinger was doing his best to swing a baseball club at the industry. Thankfully he was thwarted.