-

By Nick Snow

OGJ Washington Editor

The US Bureau of Ocean Energy Management completed a draft environmental impact statement regarding 10 oil and gas lease sales it has tentatively scheduled in the central and western Gulf of Mexico under the proposed 2012-17 US Outer Continental Shelf program. Five sales are planned for each of the two planning areas, BOEM indicated.

Comments will be accepted until Feb. 13, 2012, the US Department of the Interior agency said on Dec. 29. Public hearings on the draft EIS also will be held in Houston on Jan. 10, New Orleans on Jan. 11, and Mobile, Ala., on Jan. 12, it added.

BOEM said the draft multi-sale EIS provides information on baseline conditions and potential environmental effects of oil and gas leasing, exploration, development, and production in the central and western gulf.

The agency sought information pertinent to the lease sales, including consideration of the 2010 Macondo well accident and crude oil spill; surveys of scientific journals and credible scientific data from academic institutions and federal, state, and local government agencies; and interviews with personnel from those groups, it indicated.

It also examined potential impacts of routine activities and accidental events, including a possible low-probability, catastrophic event associated with the proposed lease sales, as well as the proposed sales’ incremental contributions to cumulative environmental and socioeconomic resource impacts, according to BOEM.

Oil and gas resource estimates and scenario information for this draft, multi-sale EIS are presented as a range encompassing resources and activities available for the 10 proposed lease sales in the two planning areas, it said.

Original Article

-

By Dan McGraw

Margaret N. Schneider will serve as the Bureau of Safety and Environmental Enforcement deputy director, James A. Watson announced today.

Schneider has been serving as the senior advisor to the BSEE director and also assisted with policy reviews and managed special projects. Prior to working with the BSEE, she spent 30 years in the Environmental Protection Agency in various offices.

In her new role, Schneider will assist Watson with the enforcement of safety and environmental regulations. She will be responsible for all field operations, including permitting and research, inspections, offshore regulatory programs, oil spill response, and newly formed training and environmental compliance functions.

“Margaret has been working tirelessly behind the scenes to help us develop BSEE into a model offshore regulator,” said Director Watson. “There will be no shortage of challenges ahead for BSEE, but I’m pleased to have someone of Margaret’s character, experience and vision as we move ahead in enforcing safety and environmental protection for offshore oil and gas operations.”

Bob LaBelle, who had been serving as the Acting Deputy Director since October 1, 2010, will now become Science Advisor at the Bureau of Ocean Energy Management.

Schneider is a graduate of Barnard College of Columbia University and holds a Masters Degree in Environmental Management from Yale University and a Law degree from Georgetown University.

Original Article

-

The Bureau of Safety and Environmental Enforcement (BSEE) recently completed an unannounced oil spill drill to assess Stone Energy Corporation’s ability to respond to a hypothetical blowout experienced by one of its deepwater exploratory wells in the U.S. Gulf of Mexico. The table-top exercise examined Stone Energy’s ability to mobilize the proper subsea containment/intervention equipment. BSEE expects to issue a final evaluation when it completes an analysis of all documentation.

Stone Energy, Lafayette, LA, is an independent oil and gas exploration and production company, with primary activities in the Gulf of Mexico, with additional activity in Louisiana, the Rocky Mountains and Appalachia.

The drill is the first such exercise since the reorganization of the former Minerals Management Service was completed on Oct. 1.

“The Unannounced Spill Drill Program provides an effective tool that helps us ensure operators are appropriately trained in effective containment deployment and that the necessary equipment and resources are truly in place to implement the approved response plan,” said BSEE Director James Watson. “This program is one of many diverse activities we employ within our agency to ensure operators are able to fully execute their oil spill response plans.”

The Unannounced Spill Drill Program, initiated in 1989, tests an operator’s ability to notify the appropriate entities and personnel in the event of a spill, including federal regulatory agencies, affected state and local agencies, internal response coordinators, and response contractors, and to take appropriate action to implement their response plan. If the decisions made during the drill do not align with the approved oil spill response plan, it provides an opportunity to determine what needs to change in the response process.

An operator is selected for an unannounced drill based on how many oil producing facilities it operates, how much oil it produces, and where that oil is produced in proximity to sensitive areas. A simulated spill scenario is developed based on the operator’s current activities. Simulated weather conditions provided to the operator during the drill are used to produce a hypothetical trajectory of the spill.

Louisiana’s injunction accuses the Department of the Interior of violating administrative procedure law, which requires new rules be published and go through a comment period before being implemented. The suit calls the department’s actions “arbitrary and capricious” and “an abuse of discretion,” and claims that while state officials tried several times to learn the motivation for the change, the federal government “failed to provide a reasoned explanation.” It also claims that the department lacks the authority to demand $2.81 million from the state, and that it may be illegal to retroactively enforce new rules in that manner.

The plaintiffs listed in the case include not only the state’s Attorney General’s Office, but also the departments that rely on funding from the lease revenues, such as the Board of Regents, the Board of Elementary and Secondary Education and the Office of Coastal Protection and Restoration.

Original Article

-

Two Louisiana critics of President Barack Obama’s offshore drilling policies met last week with the administration’s newly appointed chief oil and gas regulator, Rear Adm. James Watson. Sen. David Vitter, R-La., and Rep. Steve Scalise, R-Jefferson, said they appreciated Watson’s willingness to work with them on offshore permitting regulations.

“I had a productive meeting with Adm. Watson,” Vitter said after his meeting with Watson, the new director of the Bureau of Safety and Environmental Enforcement. “It was important to get this relationship off to a positive start so we can hopefully see his agency begin ramping up permitting again.”

After a separate meeting, Scalise said he appreciates “Admiral Watson’s willingness to listen and agree to work with me to implement clear and consistent regulations, which allow people to play by the rules and get back to work safely producing America’s energy and reducing our dependence on Middle Eastern oil.”

Original Article

-

By Nick Snow

OGJ Washington Editor

Michael R. Bromwich prepares to finish 17 months at the US Department of the Interior satisfied that necessary reforms were beginning to be made at a troubled agency there, but concerned that their permanence may be threatened by funding cuts, he said 2 days before stepping down as head of what formerly was the US Minerals Management Service.

“I never thought I’d do anything like this. It’s been the biggest challenge of my career,” he told reporters during a Nov. 28 briefing at Interior’s headquarters. “It’s a huge accomplishment that’s a tribute to the hard-working and dedicated employees of an agency that was vilified as immoral and corrupt, particularly since we began reorganizing it in a crisis environment.”

But Bromwich also expressed deep concern that members of Congress and the White House might slash DOI’s offshore resources management budget to reduce the federal budget deficit. “People have short memories,” he observed. “We’ve tried to institutionalize these reforms, but there are people who believe that this spill was an anomaly and the changes are too onerous. This agency fought a losing battle for resources over 28 years, and I think these budget gains need to be sustained. I’m worried that the larger budget climate, particularly after the congressional super-committee failed to reach an agreement, may undermine the progress we’ve made.”

He said the change he made in MMS’s relationship with the industry it was supposed to regulate to one where “we are expecting more and yielding less” was necessary to implement badly needed safety and environmental reforms. “The amount I knew about offshore oil and gas issues you could fit in a thimble,” Bromwich said. Despite a steep learning curve, he said he quickly recognized that stronger safety rules would be needed. “These couldn’t just be paper standards,” he maintained. “Fairly quickly, we set the tone with industry that this was not the same agency it had been dealing with.”

Came at critical time

Bromwich became director of the US Bureau of Ocean Energy Management, Regulation, and Enforcement—the former MMS—on June 21, 2010, as federal, state, local and oil and gas industry responders tried to contain a massive oil spill from BP PLC’s deepwater Macondo well. He arrived after US Interior Sec. Ken Salazar announced he was moving MMS’s royalty and revenue responsibilities to a new Office of Natural Resources Revenue under Asst. Interior Sec. for Policy, Management, and Budget Rhea Suh.

The move ended one of MMS’s mission conflicts, but Salazar and Bromwich concluded that BOEMRE itself would need to be divided to separate leasing and resource management from enforcement of safety and environmental regulations. The separation occurred on Oct. 1 with the creation of the Bureau of Ocean Energy Management, with Tommy L. Beaudreau as director, and the Bureau of Safety and Environmental Enforcement, which Bromwich agreed to lead on an interim basis until a permanent director could take over.

US Coast Guard Rear Adm. James A. Watson IV, who coordinated the joint response to the spill, will take BSEE’s helm on Dec. 1, and Bromwich will stay on for 30 days as a counselor to Salazar, to assist in the transition, and to attend to other matters including continuing to build an international offshore regulatory alliance. “I can’t count the number of foreign regulators who have come to us asking what we have learned and how to implement it,” he said.

He said that the next critical phase for BSEE will be reviewing safety and environmental management systems in December which offshore operators and contractors are supposed to have developed and implemented. “We will initially put our composites of our most common findings,” he said. “Ultimately, we will want to specifically identify violators, but in the short term publicly identifying the most prevalent problems while providing immediate feedback to specific operators is the best approach.”

Shuns revolving door

After Dec. 31, Bromwich said he would like to continue working on offshore resource issues, but not as a representative of any group having dealings with BOEM or BSEE. “There’s been too much of a revolving door with former directors returning in new capacities with outside organizations. I refuse to do this,” he declared, adding that he might join a law firm or start one of his own.

Bromwich said that he thought his relationships with individual oil and gas producers were better than those he had with trade associations which represented them and some members of Congress. “The operators knew who they were dealing with from the beginning,” he said. “I wasn’t a member of their team…I didn’t have any conceptions, let alone preconceptions, of the issues. I made the industry and environmental groups unhappy, but I called matters as I saw them.”

He suggested that his lack of oil and gas experience may have worked to his advantage by making him question long-standing practices, such as MMS’s limiting its regulation and penalties to offshore well operators and letting producers sort out penalties with drilling contractors and service and supply companies. Referring to his effort to begin citing other well drilling participants, Bromwich said: “I didn’t believe we should give across-the-board immunity to a contractor who had committed a major violation.”

He said that he was more successful recruiting new inspectors and environmental engineers to come work at BOEM and BSEE than he was at hiring senior petroleum engineers. “We need to pay them more, and recruit them more,” he said. “I’ve heard from some industry executives that they’re having trouble too, and it’s more urgent for them because they need to design the kind of wells that meet our new requirements.”

Retraining engineers from other specialties may be one way to address this problem, and Bromwich noted that the Colorado School of Mines has such a program under way. “Every option needs to be explored so neither industry nor the agencies that regulate it experience a bottleneck,” he said.

Original Article

-

By Katarzyna Klimasinska

Nov. 29 (Bloomberg) — The offshore-energy industry has developed the resources to meet U.S. regulations imposed after the BP Plc oil spill in the Gulf of Mexico, allowing additional exploration and leasing, the top federal regulator said.

The rules require that companies have access to deep-water oil-spill containment and cleanup equipment, meet training requirements and ensure that drilling gear passes tests.

“The good news is, industry is getting it, they are meeting our standards,” Tommy Beaudreau, 39, said in an interview today at Bloomberg’s Washington office. Agencies and industry took “some time to implement those heightened standards, but those standards are real and they’re meaningful.”

Letting London-based BP resume exploration in the Gulf after the April 2010 spill was one of Beaudreau’s early decisions after becoming the first director of the Bureau of Ocean Energy Management in October. The agency also has said it plans to sell tracts in the western Gulf in December, and to auction leases off the Louisiana and Mississippi coasts in May or June.

Beaudreau joined the Interior Department in June 2010 to help Michael Bromwich, who was the top regulator for the Bureau of Ocean Energy Management, Regulation and Enforcement, the successor to the Minerals Management Service. They were colleagues at Fried, Frank, Harris, Shriver and Jacobson LLP, a law firm based in New York.

The two men worked to create three agencies, splitting up the service’s functions: the Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement and the Office of Natural Resources Revenue.

Arctic Drilling

The ocean-energy bureau sells leases and approves exploration plans, while the enforcement bureau hands out well- drilling permits and verifies spill-response plans. The revenue office collects royalty payments from energy companies.

Beaudreau said Royal Dutch Shell Plc, which has said it wants to drill as many as 10 wells in the next two years in federal waters off Alaska, “has more work to do” before meeting U.S. conditions to begin.

The U.S. approved Shell’s exploration plan for the Beaufort Sea in August and is reviewing the company’s proposal for the neighboring Chukchi Sea. The Beaufort Sea approval was contingent upon Shell’s ability to demonstrate oil-spill response capabilities in the Arctic environment.

“We are continuing to work with them to ensure that if any drilling activity is to go forward in the Beaufort or the Chukchi this coming drilling season in the summer, that they’re prepared,” Beaudreau said.

Beaudreau, born in Colorado, grew up in Anchorage, Alaska. His father worked in Alaska’s North Slope oil industry.

–Editors: Judy Pasternak, Steve Geimann

Original Article

-

By Jonathan Tilove, The Times-Picayune

WASHINGTON — Michael Bromwich, who led the overhaul of the regulatory regime for offshore drilling after the Deepwater Horizon disaster, said Monday that he had barely a thimble-full of knowledge of the oil and gas industry when he took the job in June of last year.

But Bromwich said his status as an outsider, not inured to the practices of the past, served him well in raising standards in a manner that he believes may have saved the industry from the wholesale shutdown it would have faced had there been a repeat of the BP blowout and spill.

“I think there are many people who realize there was a near-death watch on for offshore drilling,” Bromwich said of the fragile future for drilling when he assumed his post in June 2010, a time when he said there was a widespread sense that, “one more accident and the game may be over.”

Bromwich made the comment to reporters at a valedictory news conference in a fifth-floor conference room at the Interior Department, where he held countless meetings with representatives of the oil and gas industry since he was named by President Barack Obama and Interior Secretary Ken Salazar to make sweeping changes in the way offshore drilling is overseen by the federal government.

“We are expecting more, and we are yielding less,” said Bromwich, who said industry had adapted to changes they know are in their long-term best interests.

As of Thursday, Bromwich will be succeeded by retiring Coast Guard Rear Adm. James Watson, named to head of the Interior Department’s new Bureau of Safety and Environmental Enforcement. The department was created as part of Bromwich’s breakup of the former Minerals Management Service into three separate agencies. Watson, beginning in June 2010, served as the federal on-scene coordinator for the government response to the Deepwater Horizon spill.

Bromwich will serve the remainder of the year as a counselor to Salazar before returning to the private sector, though he doesn’t know in what capacity. He said would like to stay involved on the issues he has dealt with for the past 18 months, but, mindful of the poisonous consequences of Washington’s “revolving door,” would impose on himself a “lifetime ban” on “direct dealings” with the bureaus he created and led.

More so than even Obama and Salazar, Bromwich was the point man on the regulatory response to the BP disaster and a lightning rod for criticism from industry groups and most especially Gulf Coast lawmakers, who felt the administration went too far, too slowly in imposing new burdens on the oil and gas industry.

Bromwich came to the job with a stellar reputation for investigating, monitoring and fixing troubled government entities, but mostly in the criminal justice sphere.

Bromwich acknowledged Monday that when he took the assignment at Interior, “I don’t think it’s too much to say that the amount I knew about offshore drilling and the industry and the issue, you could fit in a thimble.

“But when you are thrust into the middle of a crisis you learn quickly,” Bromwich said.

“I think it was actually an advantage,” he said. “I didn’t have any conceptions, let alone preconception, about the world I was coming into.”

Bromwich cited as a prime example his decision, contrary to past practice, to regulate contractors, and not just operators, in the case of egregious violations like the Deepwater Horizon disaster, sending out citations for safety violations not just to BP but also contractors Transocean and Halliburton, with more citations of the three to come in the next few weeks

“To me that’s an example of his misunderstanding and his lack of knowledge,” said Rep. Jeff Landry, R-New Iberia, among Bromwich’s severest critics in the Congress. “That’s not a strength, that’s an exact weakness. He’s trying to create an atmosphere so that the next time there is an accident, there is going to be a multiplicity of finger pointing.”

Going directly after contractors, Landry said, undoes “a nice linear hierarchy of how things operate in the oil and gas industry.”

“Mr. Bromwich is a liberal,” Landry said. “He believes the federal government is the ultimate authority and knows better than everybody else on the planet.”

Another Bromwich antagonist, Sen. David Vitter, R-La., said of his parting, “I wish Mr. Bromwich well as he leaves. And I certainly hope Admiral Watson brings a much more can-do attitude to properly permitting the gulf drilling we so desperately need.”

Jim Noe, executive director of the Shallow Water Energy Security Coalition, who also tangled with Bromwich at times, said Monday that, “Director Bromwich had a difficult job to do. Public scrutiny of the agency was intense and the subject matter was complex. While those with some more familiarity with the industry might have faced a less daunting learning curve, I think the director did his best under trying circumstances.

“Going forward, the new agency still must prove that it is able to address permit concerns in a timely and effective manner if we are to revitalize exploration and development in the Gulf,” Noe said. “Achieving that result is the key to restoring the economy of the region.”

Meanwhile, Rep. Ed Markey, D-Mass., the ranking Democrat on the House Natural Resources Committee, offered an unambiguous salute to Bromwich for his service.

“Following the BP Deepwater Horizon disaster, Director Bromwich’s leadership was essential in transforming the agency charged with regulating U.S. offshore oil and gas drilling from an industry lapdog into an industry watchdog,” Markey said.

Original Article

-

By Luke Johnson  14 November 2011 17:11 GMT

The newly formed body overseeing oil and gas operations on the outer continental shelf of the US has a new director, rear admiral James Watson, a key official in the US Macondo response who will replace interim director Michael Bromwich.

Watson will helm the Bureau of Safety and Environmental Enforcement (BSEE), one of two agencies formed following the breakup last month of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).

His appointment ends a protracted search for Bromwich’s replacement. Bromwich said in September that it was proving harder than expected to fill the position due to the harsh politics and intense scrutiny inherent to the job.

“You’ve got to have a backbone, you’ve got to be willing to stand up to pressure and you’ve got to be able to stand up to political heat,” Bromwich said of his job at the time.

Watson’s prior experience would presumably have prepared him for what’s in store. He served as the federal on-scene coordinator for the US government’s response to the Deepwater Horizon disaster in the Gulf of Mexico in 2010, which killed 11 people and led to the worst offshore oil spill in US history.

He is currently the US Coast Guard’s director of prevention policy for marine safety, security and stewardship in Washington, DC.

He will take his new post on 1 December. Former BOEMRE director Bromwich will stay on as a special advisor to Interior Secretary Ken Salazar until the end of the year when he will leave the Interior Department.

In a release on Monday, Salazar said Watson brings to the job “a distinguished record, a commitment to tough and fair-minded enforcement, and the determination to advance our reform agenda for the benefit of the American people and industry”.

Watson added: “The safe and responsible production of oil and gas from our nation’s oceans is vital to our energy security.”

Original Article