Feds Tightening Rules For Deepwater Drilling

Fewer oil companies will qualify for categorical exclusions under the federal government’s continued moratorium on offshore drilling, said U.S. Department of Interior Secretary Ken Salazar yesterday.

“In light of the increasing levels of complexity and risk, and the consequent potential environmental impacts, associated with deepwater drilling, we are taking a fresh look at the [National Environmental Protection Act] process and the types of environmental reviews that should be required for offshore activity,” Salazar said in a statement.

The actions by the government are intended to redress a loose oversight policy that has allowed many large oil companies to circumvent regulations and receive permits to drill in domestic waters.

A new government report indicated that BP, whose Deepwater Horizon well exploded in the Gulf of Mexico on April 20, killing 11 workers and rupturing a well which spewed millions of gallons of oil into the Gulf for months, directly capitalized on a lax federal review process. The report, published by the White House Council of Environmental Quality, determined that BP was granted permission to drill its deepwater well based on exemptions established by federal regulatory agencies in the 1980’s, several years before the creation of new technologies allowed oil companies to drill a mile below the surface of the ocean.

On Monday, the head of the regulatory agency tasked by President Obama with more or less taking over the job previously performed by the Minerals Management Service (MMS), said increased scrutiny of the oil industry is needed.

“We are building a more robust and aggressive independent oversight agency based on the development of new tools and enhanced legal and regulatory authorities, as well as on the more aggressive use of existing tools,” said Bureau of Ocean Energy Management, Regulation and Enforcement Director Michael Bromwich.

“These changes in our regulatory framework and approach will serve to hold offshore operators accountable and ensure that the industry and the country are fully prepared to deal with catastrophic blowouts and oil spills like the Deepwater Horizon.”

Senators At Odds Over Moratorium

By Miles Wolf Tamboli-Talk Radio News Service

The Senate Energy and Natural Resources Committee held a hearing Thursday to discuss a number of bills related to oil regulation and the Deepwater Horizon spill, which has just recently been re-capped after a pipe was allegedly damaged by a remotely-controlled robot, although oil can still be seen spewing from the pipe at an unknown rate.

However, lawmakers seem to have been distracted by debates over the 6-month moratorium on off-shore drilling exploration in the Gulf, which was lifted earlier in the week by a federal judge in New Orleans, as well as skepticism over the legitimacy of the presidential commission that recommended the drilling ban.

Sen. Mark Udall (D-Colo.) expressed the views of many legislators, saying that it is "common sense" to stop drilling, at least on the rigs that are in development and not yet producing oil, until the disaster can be better understood.

Louisiana Senator Mary Landrieu (D), however, stated that she "fiercely" disagrees with the moratorium. Although the ban only applies to 33 oil rigs, Landrieu argued that an economic analysis in the state has concluded that a moratorium could threaten 46,200 jobs and lost wages could amount to $5 to $10 million dollars per month.

The Senior Senator from the state that may prove to be the most impacted by the disaster cited job creation legislation Senator Debbie Stabenow (D-Mich.) is trying to pass, and stated that, "if we don't get this right we're going to eliminate every job that we're trying to create by putting people out of work in the Gulf."

Sen. John Barrasso (R-Wyo.) attacked the motives behind the President's oil spill commission, calling it, "stacked with people who philosophically oppose offshore exploration."

Interior Secretary Ken Salazar contended that the ban was, "not an ideological issue."

"With all due respect, the President, in choosing the members of this commission, chose the kinds of statesmen who, I believe, will transcend partisan politics and ideology," said Salazar.

Salazar Announces Strategy To Dissolve Culture Of Corruption In Wake Of Spill

By Miles Wolf Tamboli-Talk Radio News Service

Interior Secretary Ken Salazar outlined the reorganization of the Minerals Management Service, the federal regulatory authority that has been facing mounting criticism over its management of the Deepwater Horizon rig, during an appearance before a Senate Appropriations subcommittee.

"The Minerals Management Service is no more," Salazar said.

The agency has been split, explained Salazar, into three separate branches and renamed the Bureau of Ocean Energy Management, Regulation and Enforcement, or the Bureau of Ocean Energy, for short.

"We believe that its important to separate the leasing functions from the enforcement functions, and also to separate the revenue functions from the enforcement functions as well," added Salazar.

Michael Bromwich, the new director of the Bureau of Ocean Energy, appeared alongside Salazar Wednesday. Bromwich, a former Justice Department inspector general, told the Senators that the MMS lacked "investigative capability," and that he wishes to build an infrastructure for internal and external accountability, in part to address what many have called MMS', "culture of corruption."

Spill Response Plans Require Tight Review, Says MMS Official

By Linn Grubbstrom
Talk Radio News Service

Bob Abbey, acting head of the Interior Department's Minerals Management Service (MMS), told lawmakers on Thursday that the federal government must deeply probe how prepared it and oil companies are to handle massive oil spills.

"There is no doubt that the spill response plans that have been previously submitted by the operators in the outer continental shelf will need to be reviewed and amended based upon the lessons that we now have learned," Abbey told members of a House Natural Resources Subcommittee.

Due to BP's inability to cap an oil spill that has flowed from one of its sunken rigs in the Gulf for nearly two months, the oil industry has been heavily criticized of late for not being prepared to combat a deepwater spill of large magnitude.

"The leases and the operators will be required to go back, revisit their spill response plans and come in with something that will give, not only those of us who are now working in the Mineral Management Service but, the American public a little more confidence about their abilities to control or contain a future spill," said Abbey.

Abbey also suggested the federal government allocate more inspectors to check for safety violations on the thousands of deep water rigs located in the Gulf.

House Debates Removing BP's $75 Million Liability Cap

By Miles Wolf Tamboli - Talk Radio News

As the crisis in the Gulf Coast continues, lawmakers are debating either raising oil companies' $75 million dollar liability cap - some say as high as $10 billion dollars - or removing the cap altogether.

"It is clear that the liability caps must be adjusted, and in some instances lifted altogether," U.S. Associate Attorney General Tom Perrelli told the House Transportation and Infrastructure Committee during a hearing on the Oil Pollution Act of 1990, Wednesday.

OPA 90, as the act is commonly called, requires responsible oil companies to pay for all cleanup costs in the event of a spill. However, the law provides that entities such as BP may only be billed up to $75 million dollars to remunerate private parties for losses incurred, in addition to cleanup costs.

Some lawmakers expressed a fear that removing the liability cap could make insurance unaffordable for smaller companies; however, many advocate a tiered approach to financial liability that would base the cap rate on the risk of each company's operations, and not on the size of the company itself.

Perelli did not agree with many in Washington who believe that new legislation reducing or deleting liability caps should apply retroactively, so as to apply to BP's still gushing Deepwater Horizon leak.

OPA 90 left room for interpretation in asserting that the liability cap will not apply in the case of "gross negligence or willful misconduct," and failed to define these terms. Lawmakers, including Rep. Gene Taylor (D-MS) pushed for a clearer definition of these terms in developing new legislation.

Taylor questioned Acting Minerals Management Service Director Bob Abbey on the MMS' history of negligence in monitoring and evaluating drilling operations and granting of "categorical exemptions," presenting information that the MMS failed to conduct 16 "monthly" inspections of the Deepwater Horizon rig in the past four years.

Abbey responded to questioning by saying that he was not there "to defend past practices of the Minerals Management Service."