Trump To Rollback Deepwater Horizon Regulations

Authored by Nick Cunningham via OilPrice.com,

The Trump administration is hoping to slash regulations on offshore oil drilling that were implemented after the 2010 Deepwater Horizon disaster that killed nearly a dozen people and led to an oil leak that spewed for months.

According to the Wall Street Journal, the Bureau of Safety and Environmental Enforcement (BSEE), which is the agency housed in the Interior Department that regulates offshore oil drilling, is proposing a rollback of a series of changes made after the 2010 disaster.

BSEE says that the cuts will save the oil industry $900 million over ten years. The proposal has not been made public, but the WSJ reports that some of the changes include easing rules that require the streaming of real-time data of oil production operations to facilities onshore, which allows regulators to see what is going on. Another rule that would be removed requires third-party inspectors of equipment, such as the blowout preventer, to receive certification by BSEE.

Another example includes alterations to the “well-control rule,” one of the signature regulations that was implemented by the Obama administration after years of review following BP’s oil spill. The well-control rule required the use of certain safety equipment and operations intended to reduce the risk of another disaster.

But the Trump administration, in a nod to the oil industry, has proposed deleting the word “safe” from a section of the rule, the WSJ reports, which would restrict BSEE’s ability to withhold permits. “Based on BSEE experience during the implementation of the original [well control rule], BSEE has concluded that the term ‘safe’ creates ambiguity in that it could be read to suggest that additional unspecified standards, beyond those expressly stated, may be imposed in the approval of proposed drilling margins,” BSEE wrote in a justification of the rule change, according to the WSJ.

The upshot is a weaker regulatory regime over offshore oil and gas drilling and it comes at a time that Trump’s Interior Department is also moving to expand drilling not just in the Gulf of Mexico, but eventually in the Atlantic and Arctic Oceans.

The current head of BSEE said earlier this year that the Obama administration overstepped when it put in place regulations on drilling. “It was obvious to me that back then there was a conclusion that it was a systemic problem, and yet I don’t believe there was evidence at the time that it was a systemic problem,” Scott Angelle, the director of BSEE, said in June.

BSEE now argues that the oil industry has learned from its mistakes, and has incorporated changes since the 2010 incident, and thus, does not need heavy government oversight.

Meanwhile, BSEE also sent a stop-work order on a study that would evaluate how the agency inspects offshore oil and gas operations. The study, to be conducted by the National Academies of Sciences Engineering, and Medicine, was initiated last year and was intended to figure out ways to improve inspections.

Environmental groups are crying foul.

“The Department of the Interior, whose job it is to make sure offshore drilling is safe, should welcome a serious investigation into the best way to carry out that job, especially as the administration pushes to expand drilling even further in the Atlantic and the Arctic,” Andrew Rosenberg, director of the Center for Science and Democracy at the Union of Concerned Scientists, said in a statement.

 

“Instead, they’re blocking research into the risks. What is Secretary Zinke afraid of?”

Interior is lining up a massive auction of offshore acreage, scheduled for March. The auction is expected to serve up 77 million acres for drilling, the largest offering ever held. The auction will include "all available un-leased areas on the Gulf's Outer Continental Shelf," the agency said in a statement a few months ago.

It is unclear how much interest there will be in offshore drilling, but the sector is looking to rebound several years after the market downturn. The EIA expects the U.S. Gulf of Mexico to add 344,000 bpd of new supply in 2018 from seven different projects, although many of those were planned years ago.

Comments

LetThemEatRand bamawatson Wed, 12/27/2017 - 15:06 Permalink

The funny thing is that we really can have it both ways.  The spill cost $62B and counting.   Yet BP is still drilling away and making money.  The regulations being rolled back supposedly cost the oil industry $90M a year, a tiny fraction of the clean-up cost involved in the BP spill, and a proverbial drop in the bucket of overall drilling expenses.

In reply to by bamawatson

Urban Roman LetThemEatRand Wed, 12/27/2017 - 17:09 Permalink

I was following the commentary on The Oil Drum back then. And from that I learned that BP wasn't even close to following common safety practices on that project. They'd just sign off on the cement job, and proceed on to the next step without testing it (among many other things).If the drillers were ignoring the rules back in 2010, then these regulations Trump is "rolling back" are just so much noise that they will also ignore.

In reply to by LetThemEatRand

Keyser Urban Roman Wed, 12/27/2017 - 20:39 Permalink

Not sure this is such a good idea... As someone that was on the inside of the information loop during this tragedy, there were many errors in judgement in management at Transocean and their sub-contractors just prior to the rig explosion... The primary culprit was more interested in $$$ than safety... Rolling back the regulations only allows this sort of thing to happen again in the future... 

In reply to by Urban Roman

LetThemEatRand Tallest Skil Wed, 12/27/2017 - 14:58 Permalink

Excellent point.  Regardless of one's views on global warming, most of us here remember Deep Water Horizon and the massive amounts of toxic chemicals (Corexit) that BP sprayed onto the Gulf of Mexico to make the oil sink to the bottom.  87 straight days of oil spewing out from the well.  We still have no idea how much damage was done, but I guess it's sufficiently out of the public's memory that it's time to "trust" the oil companies to self-regulate (again).

In reply to by Tallest Skil

techpriest LetThemEatRand Wed, 12/27/2017 - 15:05 Permalink

I would like to know what the nature of the regulation was.

In some cases its a matter of filing reports that accomplish nothing at all, except provide opportunities to collect fines.

In other cases its a matter of requiring certain safety process in order to get a license to operate (people in manufacturing are likely aware of lockout/tagout, for example). In some cases these standards are developed by independent organizations such as the ISO.

Of course, either way I'm sure the document takes a couple of reams of paper to print out, so we'll never fully know.

In reply to by LetThemEatRand

techpriest LetThemEatRand Wed, 12/27/2017 - 15:13 Permalink

From the article, here's the reg in question:

https://www.bsee.gov/guidance-and-regulations/regulations/well-control-…

Here's where the ambiguity comes in: in the top section we see the word "safe" three times, and in one particular sentence:

(10) sets expectations of what constitutes a safe drilling margin and allows for alternative safe drilling margins when justified

Which "safe" you drop can lead in substantially different meaning of the reg. After scanning subsections I see that one would also need to read ISO 17021 to get a clearer idea of what constitutes a compliant BOP stack.

I just wish the journalists would be clearer, but maybe there wouldn't be a story if there were.

In reply to by LetThemEatRand

Scanderbeg LetThemEatRand Wed, 12/27/2017 - 15:09 Permalink

The Gulf Ecosystem will probably never be the same or at least not for generations. There are still effects from Exxon Valdez and the DH spill was the worst in history.BP paid an enormous amount in claims and fines while their name is dirt in the U.S so it would be retarded for offshore drillers not to be more careful in the future. However, it's entirely reasonable for regulators to be watching and inspecting these sites. Seems like a pittance in regulatory savings compared to the cost of the spill and extra confidence it gives to the public. 

In reply to by LetThemEatRand

Scanderbeg stacking12321 Wed, 12/27/2017 - 16:53 Permalink

Usually I would agree and often you get regulatory capture anyway.In this case I have to disagree though. The public has a prevailing interest in monitoring these rigs. They are uniquely hazardous and can singlehandedly devestate entire regions if there is an accident. Companies like BP have proven they can't be trusted and the cost of these measures is negligible.If you are saying that the Feds capping the settlement is the problem I suppose there's an argument for that though. This incident should have been the end of BP's operations in the U.S and class action suits would discourage lax standards by other companies in the future. I just want to clarify. There are no individual or class action suits against BP correct ZH'ers ? All of this is being administered by the Feds right? And the only ones suing BP personally for damages are the dead and injured workers and their families correct? Also did BP get indemnity or NDA's in exchange for those payouts to individuals and busineses? Or was that just "goodwill" and everything pertaining to the settlement is being handled entirely by state and federal regulators? 

In reply to by stacking12321

BritBob Wed, 12/27/2017 - 14:48 Permalink

The Argentinians are worried in case there is a spill in the South Atlantic. They are prospecting west of the Falkland Islands. But what about ...Falklands Oil By a ruling of the UN, Argentina will extend its maritime platform (Politica Argentina) ; New map of the maritime platform reaffirms the sovereignty of Malvinas with UN endorsement (ElCronista); Argentina enlarges its territory 35%, with a UN endorsement ...(La Capital).To add to this euphoric atmosphere the Argentine Foreign Minister stated, ''This is a historic opportunity for Argentina. We have taken a great step in the demarcation of the outer limit of our continental shelf; the most extensive boundary of Argentina and our border with humanity,'' Foreign Minister Susana Malcorra told La Nacion, which tomorrow will publicly announce the details of this resolution. (Susana Malcorra, quoted by Dinatale M, La Nacion, Argentina, 27 March 2016).   But what did they say...And what does international law say about ownership of natural resources? Argentina's Continental Shelf Claims and The UN CLCA Commission (1 page):- https://www.academia.edu/33898951/Argentinas_Continental_Shelf_Claims_-The_UN_CLCS_Commission

Ignorance is bliss Wed, 12/27/2017 - 14:49 Permalink

Good move. The National oil companies are hemoraging money and have slowed exploration. Candian Oil Sands and shale oil are low profit poor quality crude. If the Chinese open the Yuan oil Borse then we may eventually lose access to Middleast oil. We will need every drop of domestic oil to keep the economy going..especially if there is a global war on the horizon.

b-sugar Ignorance is bliss Wed, 12/27/2017 - 15:00 Permalink

Most companies are making money and exploration has always been corelated to oil price with a 3/6 months lag. Canadian oil sand is not poor in quality, it's just way harder to extract the rafined oil. As for the middle east oil access, it's geo politics and not related to internal legislation, saudi arabia, quatar (mostly gas but still) Egypt and Iraq oil will be available (turkey is uncertain atm i'll say). 

In reply to by Ignorance is bliss

Ignorance is bliss b-sugar Wed, 12/27/2017 - 16:19 Permalink

U.S. oil companies making money; read this = https://srsroccoreport.com/u-s-shale-oil-industry-swindling-stealing-en… oil sands are not poor quality = Why do they call it tar sands? Why is it so hard to process? Harder to extract means less profit.Middle-east oil = goes to the dominant nation. Right now the nuber one consumer of middle eastern oil is China. The Chinese have a joint Saudi refining plant.https://www.bloomberg.com/news/articles/2017-05-17/saudi-aramco-tighten…

In reply to by b-sugar

b-sugar Ignorance is bliss Wed, 12/27/2017 - 18:02 Permalink

fucking mental gymnastics man. Canadian oil sands are not poor quality = Why do they call it tar sands? Why is it so hard to process? Harder to extract means less profit.you said the quality of oil is poor and I rebuted the oil is fine, it's just harder to get. now by (it seems) wanting the "point" you go from poor quality = less profit, intertwined with rethoric in the middle...the rest is just "im to stupid to have a view, you read this shit instead". you are just invalid as a speaker. 

In reply to by Ignorance is bliss

Anteater b-sugar Wed, 12/27/2017 - 17:13 Permalink

Give me a break, without  imported Asian gas liquids to dissolvethe bitumin tar and goose it above API 45 so it can be pumpedand refined, it would all end up as road asphalt and coking coal.Nasty tar shit, and with Keystone XL, Alberta just exported all thetar pollution to South Texas, before it's refined for export to China.The Keystone XL will also suck all the fracking surplus out of theover-supply MidWest market, driving up gas prices for Americans,so some billionaires and foreign investors can get rich as Croesus.And importing the Asian gas liquid condensates to dissolve the tarviolates NAFTA, so it will be interesting to see how Trump explainswhy he's renegotiating NAFTA to 'protect US workers', the lying cunt.

In reply to by b-sugar

Anteater Ignorance is bliss Wed, 12/27/2017 - 17:00 Permalink

Let's not get carried away. The China-KSA or China-Russia Yuan-for-Oilonly applies to the China trade. KSA doesn't need to trade the Yuan forChinese equipment, they have whatever equipment the Western oilconcessionaires use. KSA might trade oil for Ramen and ShrimpCrackers and slave maids and construction workers, but that will ignitea war with Bangladesh and Philippines over the slave labor concession.Russia may trade for food and equipment, but the don'tneed or want slave labor. Maybe the Yuan will become part of a 'basketof currencies' constantly being adjusted and constantly skimmed by theSquid. In any case, China demand is 1/10th of US consumption, andwon't effect US for 3 to 5 more years until the Permian plays out. Thenit's Battlefield Earth. That's plenty of time for Trump to retire a billionaireand for the Squid to set up WW3. Meantime, gas is cheap. Let's Roll!! 

In reply to by Ignorance is bliss

FORD_FIESTA Wed, 12/27/2017 - 15:51 Permalink

The Oil Drum? Anyone remember The Oil Drum and all the "end of the world" crappola that was on that site?  The Deepwater Horizon leak was gonna set the whole Gulf on fire!!! HAHAHAHAHAHAHA!  Talk of Nuke strike to put it out. HAHAHAHAHAHAHA!The end of the world is near.....HAHAHAHAHAHAHAHH!But Marky Mark made a shitload of money on the Movie.......yep.

Stan522 Wed, 12/27/2017 - 14:58 Permalink

The only way companies learn a lesson is if the penalty is steep enough. That's why I am thoroughly convinced we will have another banking crises because those assholes got away with it in 2008.

knotjammin2 Wed, 12/27/2017 - 14:58 Permalink

As someone who has worked on oil rigs, deep water specificly, there is no way in hell the Deep Water Horizon event was anything short of sabotage.  All BOP systems are redundant and for the driller or any other autority to lose control of that well is pure unadutrated BS.  BP was/is the fall guy.  Make a list of who made it off the rig alive and the name of the guy responsible will be on it.

Anteater knotjammin2 Wed, 12/27/2017 - 15:29 Permalink

That's nonsense. The pressures were higher than anticipated, thecementing off was defective, and the well head control device wasineffective in pinching off the casing, and when it finally did, from thephotos it looks like the pressure blew the well head control deviceand meters of poorly cemented casing out of the bore hole. Pressureson the OCS will be even higher, drilling in even deeper depths, wherecorrect cementing off and well-head controls are even more difficult.Remember the 'Brazilian Deepwater Miracle' the 'Saudi-Sized Play'?These leases may never get drilled. It may just be an oil-depletiontax-credit bridge until prices rise back to $75 for onshore fracking.The solution is for Trump to import an extra 100,000,000 ChindianH-3B workers to pull high-tech rickshaws. That'll end the oil crisis,in one brilliant 7D chess move! WINNING!! UNLIMITED COOLIES!!

In reply to by knotjammin2

Grandad Grumps Wed, 12/27/2017 - 15:00 Permalink

Maybe Trump found out the Deepwater Horizen was a false flag event like everything else. It was designed to create more control and money for the government regulators.

vaft Grandad Grumps Wed, 12/27/2017 - 15:36 Permalink

Maybe Trump found out the Deepwater Horizen was a false flag event like everything else.

Yes, that must be what happened. Trump learned about sandy hook, 9/11, the las vegas shooting, and, as you say, "everything else." So he slammed his fist on his desk and said, "Enough is enough! I'm sick and tired of all these false flags. Let's take the word 'safe' out of oil industry regulations. That'll show 'em!" Yes, that's what happended grandpa, now just just calm down and let me turn Fox News back on for you. 

In reply to by Grandad Grumps

TooJuiced Wed, 12/27/2017 - 15:07 Permalink

Regulations waste money and strangle the economy. On the other hand unchecked oil companies would have a major spill every 6 months if it maximized profits. Land ownership protects the land but no one owns the ocean. What's a free market person to think?

LetThemEatRand TooJuiced Wed, 12/27/2017 - 15:13 Permalink

To put this in perspective, BP's CEO will receive $19.6 million in compensation this year.  The regulations being rolled back supposedly cost the ENTIRE oil industry $90M a year.    You can't tell me that BP can afford to shell out $19.6 million to one guy but cannot afford whatever it's share of $90M in regulatory expenses is (once again, a figure that represents supposed regulatory compliance expenses across the entire industry) to help prevent another catastrophe.

In reply to by TooJuiced

motoXdude Wed, 12/27/2017 - 15:26 Permalink

Oh Joy!  Does this mean $0.93 / gallon again?  I'm getting me a Hummer H1 with a V-32 and 40 valves per cylinder!   Can't wait to drive it down to the Gulf beaches to view the glistening oil floating on the surface reflecting the sunlight in such pretty colors!  And those oil-covered birds are no challenge for my 16 GA... we're gonna have an Exxon-Mobil Seagull BBQ... no additional oil necessary!

Yippie21 Wed, 12/27/2017 - 15:23 Permalink

BP got away with a lot because they were huge donors to Hillary and Bill and Obama.  Then, they had a accident, which Obama swept in to throw huge regulations on the industry because, why not?  He wanted to destroy off-shore drilling and the domestic oil industry if he could.  He said so.  Obama drove UP the price of oil, which helped Russia and OPEC and Iran....   and it almost worked.... and then fracking happened....  and major fields were discovered..     It will make a great movie some day... oh, wait... nevermind...  Hollywood would never make a movie about how fracking derailed the Obama administration.  Nope.  Never.

chubakka Wed, 12/27/2017 - 15:28 Permalink

We dont need anymore drilling.  There is more than enough oil on the market.  This will result in more disasters.  All Trump knows to do is feed big corps.  

ALANBEEKMAN Wed, 12/27/2017 - 15:43 Permalink

Soon to be drilling in Anwar, after being off-limits for 40 years, and now this.Sounds like the oil execs have convinced Trump there needs to be a Plan Bwhen fracking industry goes tits up in the near future.