Rules and Regulations 

 

Interim Final Drilling Safety Rule (10/14/10)

Workplace Safety Rule (10/15/10)

NOI to Conduct a Review of Categorical Exclusions for OCS Decisions (9/20/10)

 

 

 

For Immediate Release:                            Contact:  Nicolette Nye

Tuesday, October 12, 2010                               (202) 347-6900          

 

NOIA Encourages Movement on Permits to Prevent a De Facto Gulf-wide Moratorium

 

WASHINGTON, DC – NOIA President Randall Luthi today issued the following statement in response to the lifting of the deepwater drilling moratorium announced today by Secretary of the Interior Ken Salazar:

“While we are pleased today that Secretary Salazar has opted to end the job-killing moratorium on deepwater drilling in the Gulf of Mexico, our companies remain doubtful that this announcement is anything more than symbolic, until permits are actually  issued for new drilling. 

“In the shallow water gulf, where no official moratorium was imposed, permitting slowed to a snail’s pace under the government guidelines imposed this summer, some of which are now codified in the Interim Final Drilling Safety Rule announced by DOI last week.  It is therefore not a stretch to assume that, despite today’s action, companies operating in the deepwater Gulf may suffer a similar de facto moratorium. 

“Slowing or stopping the actual issuance of permits is not the only threat posed by the Administration’s handling of this issue. The Interior Department today referred to the ‘dynamic’ nature of future regulations in an effort to show they would adapt as circumstances warrant. That sounds good. In reality, however, it introduces another level of uncertainty to a regulatory process that has come to be less predictable than in many under-developed nations around the globe. When billions of dollars of investment are at stake, a ‘dynamic’ regulatory process could be as dangerous to future offshore energy development as an outright ban.

“Any moratorium on offshore drilling and operations, official, de facto or in the form of vague dynamic regulatory systems, kills jobs and home-grown energy.  The offshore industry is ready, willing and able to comply with governmental rules and regulations to ensure safe operations, but would also like to see the Department focus more energy and resources on reviewing and approving permits so we can get back to work for America.”

 

 ###

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  The NOIA membership comprises more than 250 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance.

 

For Immediate Release:                                           Contact:  Nicolette Nye

Thursday, September 30, 2010                                   (202) 347-6900          

 

NOIA President Randall Luthi Comments on Interim Final Drilling Rule and Workplace Safety Rule

 

WASHINGTON, DC – NOIA President Randall Luthi today issued the following statement in response to the Interim Final Drilling Safety Rule and Workplace Safety Rule announced today by Secretary of the Interior Ken Salazar:

 

“It’s unfortunate that the Department did not take this opportunity to lift the job killing deepwater drilling moratorium or to address the de facto shallow water moratorium.  Given the lack of regulatory clarity and resulting uncertainty for the offshore industry in the wake of the Gulf oil spill, NOIA and its members have been anxiously awaiting news on the moratorium, in addition to the new governmental guidance for offshore operators announced today.  Companies want to get back to work as soon as possible producing jobs and home-grown oil and gas for America.

“Industry fully understands that the Interim Final Drilling Rule and Workplace Safety Rule impose new, stricter requirements for offshore operations, but the devil will be in the details and the ability of the Department to provide adequate guidance and actually process permits. If recent history foretells the future, industry will need to seek further guidance as to what is meant by the new rules and how they will be implemented.  

 “One need only look to the shallow water Gulf, where no official moratorium was imposed, to see that permitting has already slowed to a snail’s pace under the government guidelines hastily imposed this summer, including NTL05 which has now been codified in the Interim Final Drilling Safety Rule.  This now makes it clearer that even after the official drilling moratorium ends, companies operating in the deepwater Gulf may suffer even more from the effects of a de facto moratorium.  DOI is focusing energy and resources on beefing up its inspection force, and industry would like to see equal energy and resources focused on the permit approval process.

“Industry looks forward to the lifting of deepwater drilling restrictions, and we hope that when that does occur it will be more than just symbolic. NOIA and its members have long predicted that the end of the official moratorium will not mean that exploration in the Gulf of Mexico will immediately resume.  However, the longer it takes for industry to get a clear view of the finish line, the longer it will take to get people back to work and to supply the nation with a secure domestic energy source.”

 

 ###

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  The NOIA membership comprises more than 250 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance.

 

 

For Immediate Release:                                                Contact:  Nicolette Nye

Thursday, September 16, 2010                                       (202) 347-6900          

 

NOIA President Randall Luthi Responds to Revised Projections of Job Losses Resulting from Deepwater Drilling Moratorium

 

WASHINGTON, DC – “Today’s report from the Obama Administration on the job losses caused by their blanket deepwater drilling moratorium downplays the true impact being felt in the Gulf Region,” said Randall Luthi, President of the National Ocean Industries Association. “It will be no comfort to these unemployed workers to read how their plight could be worse had the Department’s earlier estimates of 23,000 rendered jobless been realized.”

The report, released today at the Senate Committee on Small Business and Entrepreneurship hearing, reduces the original projections of 23,000 lost jobs resulting from the  gulf drilling moratorium to between 8,000 to 12,000, and predicts that most of those will be temporary losses. 

“The original estimate of 23,000 job losses was based on the assumption that offshore energy companies would lay off their entire drill-rig related workforces,” said Luthi.  “Thankfully, offshore oil and gas companies are good corporate citizens who have retained their skilled employees during this unprecedented time, in hopes that the moratorium is lifted soon, permits are issued and drilling activity resumes.  However, this ability to keep these workers without work cannot last much longer.”

The report also fails to recognize that many displaced workers were given work assisting with oil spill response and cleanup.  Since the flow of oil has been stopped for some weeks now, these temporary jobs will end, and these workers will only be able to resume full-time work when Gulf drilling activity resumes.  

The Administration is correct in the assessment that the impacts of the moratorium are being felt the deepest by the Gulf’s small businesses.  Listed below are real life stories detailing the impact felt by some of these businesses and their employees as a result of the blanket drilling moratorium. 

 

Aries Marine Corporation

Aries Marine Corporation owns a fleet of 29 workboats based domestically in the Gulf of Mexico. On September 1, 2010 they took delivery of the newest vessel to their fleet, a 5,553 Dead Weight Tonne Offshore Support Vessel (OSV). This vessel is the largest U.S. flagged conventional OSV in the Gulf today. It has a complete crew of 16 mariners and riggers. Its daily crew cost is $10,000 or $3,650,000 per year. That is $3,650,000 that goes directly to salary and payroll taxes for this one boat. At the moment it is without work and Aries is actively marketing the boat to go to Mexico. Should it go to Mexico, the crew will be split between Americans and foreign mariners. Roughly half of the payroll will be retained by Americans.  Crews of other vessels that are not likely to go to Mexico will have to remain in the U.S. where no work is likely to be found due to the lack of drilling. 

  

Aries’ current annual gross payroll is $20,000,000, but this is because they rehired 30% of their workforce back last March following an economically challenging 2009.  However, in March the outlook was much better and drilling contractors were creating jobs. Subsequently, Aries rehired those they had laid off. The tragic accident of April 20^th then occurred and those drilling jobs never materialized.  Now with the cleanup activities coming to an end and virtually no drilling permits processed they are again looking at bleak times. If this moratorium is not quickly lifted Aries fears that once again they will have to take drastic and unwanted measures to save the company.  

CapRock Communications

“CapRock Communications delivers turnkey satellite communications that provide offshore drilling rigs, production platforms and support vessels with reliable connectivity to operate more efficiently. The company has served clients in the Gulf of Mexico for 29 years and has grown to over 700 employees globally, several hundred staffed at CapRock’s Houston, Texas and Lafayette and New Orleans offices.

CapRock has developed a strong reputation in the industry for delivering extremely dependable communications, even to the most remote locations, which differentiates CapRock from its competitors. It’s CapRock’s strong service organization, satellite veterans and highly trained technicians that enable CapRock to deliver such service. It would be difficult to replace workers in these specialized positions if CapRock were to let go of employees and then need to re-hire once the moratorium is lifted. Additionally, many CapRock employees began their careers with CapRock and have long tenures with the company. CapRock diligently seeks to remain a good corporate citizen and continue to employ its personnel; however, financial implications from the moratorium continue to mount. If the moratorium is not lifted quickly, CapRock will be forced to reduce its workforce in the Gulf of Mexico.” – CapRock Communications

Key Energy Services, Inc.

“Key Energy Services is a significant participant in wellbore fishing and tubular recovery services in the Gulf of Mexico deepwater.  Key’s field workforce in this market has been reduced by 40 percent as a result of the decrease in activity due to the moratorium.  These are good paying jobs that require many years of training and experience to fulfill.  We need our federal regulators to be rational and recognize the hardship that the moratorium has placed on families whose livelihoods have been impacted in recent months.” - Dick Alario, Chairman, President and CEO

 

Seahawk Drilling, Inc.

• Has idled four rigs and furloughed most employees on those rigs  (SH2500, SH2505, SH3000, SH2001)
• Each rig has about 50-60 employees – total furloughed around 150 (about 25% of staff)
• One rig and its crew of furloughed employees SH2001 has been recalled
• Has had a total of 58 resignations with many of these furloughed employees
• Some furloughed employees have been called back to fill resignations
• A total of 41 employees remain furloughed (about 9% of their staff)
• Most employees that have resigned have left the offshore industry

 

Southern States Offshore, Inc.

 “We have not laid anyone off, regardless of utilization, in order to maintain crew continuity, safety and preparedness.  We will continue this policy for as long as we can, but economics will force us at some point to lay off crews in order to survive.” - Edward Schreiber, Owner/Vice-President

 

TGS

 “Actions that the government has taken in the Gulf post-Macondo have certainly had a negative impact on our business.  As our business is the licensing of multi-client geoscience data to offshore operators, it is important that E&P companies have a regulatory framework and the appropriate incentives to encourage their continued investment in efforts to locate much needed new energy reserves.

“Our customers, whether due to the moratorium or due to the uncertain future regarding regulation in the offshore US, have definitely taken a “pause” in their E&P investment decisions in the GOM.  This has created considerable uncertainty in our prospects for business growth in 2010.  While we have not yet taken cost reduction actions that would result in layoffs at TGS, we have imposed a freeze that has resulted in a decision not to fill 33 open positions that we originally had in our budget for 2010.  These are highly salaried, highly technical jobs that we had intended to fill that will now not be filled in the current environment.  This may not seem like a large amount of employees relative to other contractors, but for TGS it does represent 5% of our total employment base.” - Robert Hobbs, Chief Executive Officer

 

 

###

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  The NOIA membership comprises more than 250 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance.

 

 

For Immediate Release:                                           Contact:  Nicolette Nye

Wednesday, September 15, 2010                                    (202) 347-6900          

 

NOIA President Randall Luthi Comments on DOI’s “Idle Iron” Guidance

 

WASHINGTON, DC – NOIA President Randall Luthi today issued the following statement in response to the Department of the Interior’s announcement of updated procedures for decommissioning offshore wells and platforms:

 

“It is important to understand that this decision is in no way tied to the Deepwater Horizon accident.  This notice strengthens existing requirements and has likely been in the works since at least 2008, when the then-MMS conducted a review of idle structures and wells.  Now, as then, the offshore industry is committed to safe operations, both during and after exploration and production, and this includes responsible removal of structures and plugging of wells.  

 

While industry stands ready to fulfill this commitment, it can only do so with the cooperation of State and Federal agencies.  For example, will the National Oceanic and Atmospheric Administration commit to prompt review and approval of the Incidental Take permits needed under the Marine Mammal Protection Act before companies can actually decommission a platform? Will the Administration work with the states to finalize Rigs-to-Reefs Programs so that decommissioned structures might find a second life as habitats for offshore ecosystems?

 

Industry is ready to meet its obligations with respect to offshore structures. We ask only that the Federal government meet us halfway by approving the actual work.  It is not enough just to clarify the requirement of cleaning up and removal of structures, the Administration must also assist in clearing the path so such operations can be done quickly, smoothly and in an environmentally responsible manner.”

 

 ###

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  The NOIA membership comprises more than 250 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance.