Regulators Propose Rollbacks to Offshore Drilling Safety Measures

Wall Street Journal | Ted Mann | December 25, 2017

Regulators in the Trump administration are proposing to roll back safety measures put in place after the 2010 Deepwater Horizon oil spill, a revision that would reduce the role of government in offshore oil production and return more responsibility to private companies.

The Bureau of Safety and Environmental Enforcement, which regulates offshore oil and gas drilling, estimates its proposed changes could save the industry more than $900 million over the next 10 years and reverse some risk-reduction measures that drillers consider burdensome.

Among the changes, the proposed rule would relax requirements to stream real-time data on oil-production operations to facilities onshore, where they currently are available for review by regulators. It also would strike a provision requiring that third-party inspectors of critical equipment—like the blowout preventer that failed in the Deepwater Horizon case—be certified by BSEE.

BSEE submitted the proposal Dec. 8 to the White House budget office that reviews new regulations but hasn’t made it public. The Wall Street Journal reviewed the proposal. A BSEE spokeswoman declined to comment while the rule-making is in progress.

After Mr. Trump took office, industry groups such as the American Petroleum Institute, the Offshore Operators Committee and the National Ocean Industries Association flooded the agency with suggestions for changing the so-called well control rule, BSEE’s response to Deepwater Horizon as part of a painstaking, five-year process undertaken by the Obama administration

While industry would get much of what it has sought, BSEE is proposing leaving in place a standard for how much pressure drillers must be maintain atop a well to prevent a blowout. At the same time, the word “safe” would be deleted from that section of the rule, on the basis that regulators could exceed their authority in interpreting the term in a way to withhold certain drilling permits.

The revisions fit into a Trump administration effort to loosen regulatory restrictions on business and industry, one with a broad effect in the energy sector. The Interior Department is moving to expand offshore drilling on millions of acres previously off-limits. In addition, the tax overhaul Mr. Trump signed Friday includes a provision to open the Arctic National Wildlife Refuge to oil production, a goal long sought by oil companies and Republican lawmakers.

At BSEE, the administration’s focus has been on countering Obama-era policies that sought to expand government oversight of oil exploration and production, in the hopes of preventing future spills.

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