Nick Cunningham

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 10 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.

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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.

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