Interior Secretary announces new drilling rules but nothing on offshore drilling ban

Interior Secretary Ken Salazar on Thursday laid out new offshore
oil-and-gas drilling regulations but did not answer one of the more
pressing questions in the aftermath of the Gulf oil spill: when the
federal drilling moratorium will end.
 
In a speech on the
administration’s broader energy strategy, Salazar announced a new
drilling safety rule that prescribes regulations regarding the design,
cementing and casing of wells and the use of drilling fluids.
 
It
would also require that blowout preventers — the last line of defense
before a well ruptures, and the mechanism that failed to prevent the BP
spill — have to be independently certified.
 
But Salazar largely
left open several polarizing issues, including when the administration’s
temporary deepwater drilling ban will end, where companies will be
allowed to drill in federal waters and how much slower and more costly
the permitting process for new drilling leases will be.

“We will only lift the moratorium when I, as secretary of the Interior, am comfortable that we have significantly reduced those risks,” Salazar said at the Woodrow Wilson International Center for Scholars, brushing aside calls from oil-state lawmakers in both parties to lift or relax the deepwater drilling ban.
 
“The same people who have fought to weaken regulation and oversight of the oil and gas industry have protested the suspensions from the start,” Salazar said. “They want us to ignore the new reality and go back to business as usual as if nothing had happened in the Gulf of Mexico. But that’s not an option; we won’t proceed down that path.”
 
Salazar also announced a new workplace safety rule that requires operators to set up a safety and environmental management structure “designed to reduce human and organizational errors as the root cause” of the BP and other spills.
 
It makes mandatory a recommendation from the American Petroleum Institute that was previously a voluntary program to identify and address safety hazards and environmental impacts of drilling.
 
Salazar invoked his emergency powers to put the two interim rules into effect immediately, though they appear to largely mirror safety recommendations he gave President Obama in May.
 
Salazar also promised to “build on these two rules” in the coming weeks. “The oil and gas industry needs to expect a dynamic regulatory environment,” he said.
 
This will include a new rule tightening design standards for blowout preventers and requiring certification of their safety management systems by a third party, Salazar said.
 
House Republicans pounced on the continued uncertainty over the ban.
 
“The Interior Department today announced new rules on drilling, but still refuses to say when the arbitrary, non-science-based moratorium will be lifted,” House Natural Resources Committee ranking member Doc Hastings (R-Wash.) said in a statement. “When will the administration actually begin issuing permits? When will people in the Gulf be allowed to return to work?”
 
Sen. Mary Landrieu (D-La.) has placed a procedural hold on Obama’s nomination of Jacob Lew as head of the White House Office of Management and Budget to pressure administration officials to lift or ease the deepwater ban and quicken permits for projects in shallow waters not under the official moratorium.
 
Salazar is receiving recommendations Thursday from Bureau of Ocean Energy Management, Regulation and Enforcement Director Michael Bromwich that lay out new federal environment and safety criteria for offshore drilling and contingency plans to respond to future spills.
 
He may act on the recommendations — which will not be released publicly Thursday — well before the Nov. 30 expiration date for the administration’s deepwater drilling ban.
 
While industry officials are still analyzing the rules, “at first blush” they appear to be ones that “are largely already being complied with,” said Jim Noe, who leads the Shallow Water Energy Security Coalition.
 
“Nothing exactly new, though we do think they’re taking this process seriously and we do expect the report to have some real significant improvements to how they do drilling,” said Athan Manuel, director of the Sierra Club’s land protection program.
 
Environmentalists want the administration to go further than simply update how drilling can occur and close off significant federal waters completely.
 
“We think this should be a wake-up call to use less energy and start to finally get the U.S. off of oil in 20 years,” Manuel said.
 
Oil and gas executives are preparing for what they deem a de facto ban on drilling to continue even after the official moratorium ends, due to a costlier and slower permitting process.
 
There are also questions whether companies will be able to develop in new federal waters included in a five-year leasing plan Obama outlined March 31, mere weeks before the April 20 blowout of the BP Macondo well.
 
Thursday’s speech continues a series of incremental moves Salazar has made in the aftermath of the spill — including splitting the former Minerals Management Service into separate agencies to draw a line between granting production leases, overseeing environmental and safety enforcement and collecting production revenue.
 
Salazar said he will travel to Lakewood, Colo., on Friday to officially open the new Office of Natural Resources Revenue, which will be responsible for royalty collections, auditing and related tasks.