Government weighs more drilling contractor oversight

Reuters News
Posted: Apr 12, 2011 6:19 PM

By Ayesha Rascoe

WASHINGTON (Reuters) - The U.S. offshore drilling regulator is weighing options for expanding oversight of rig contractors after last year's massive BP Plc oil spill exposed a possible regulatory gap, Interior official Michael Bromwich said on Tuesday.

Bromwich, who heads the the Interior Department's Bureau of Ocean Energy Management, said the agency was examining whether it has the authority to extend its regulations beyond the rig operators.

So far, officials have found that the agency's regulations cannot go beyond operators unless new laws are enacted, but the agency is still looking into the issue, Bromwich said.

"We may want to push for reforms in that area," Bromwich told reporters, eight days before the one-year anniversary of the rig explosion that killed 11 workers and led to the spill.

In the case of Gulf spill, BP was the operator for the doomed Macondo well and received a drilling permit from Interior, while contractors such as Transocean Ltd owned and operated the drilling rig and Halliburton Co did cementing on the well.

Some official probes into the spill blame mistakes by Transocean and Halliburton, as well as BP, for the drilling accident that led to the largest offshore oil spill in the U.S. history.

"I think it is very important for our regulations to extend as broadly as possible to all entities operating offshore and not for us to be artificially limited to the individual operator that applies for permit," Bromwich said.


An explosion on Transocean's Deepwater Horizon rig ruptured BP's underwater Macondo well, spewing nearly 5 million barrels of oil into the Gulf of Mexico last summer.

Nearly a year after the accident, Bromwich and Interior Secretary Ken Salazar said the Obama administration has instituted a slate of reforms that have made U.S. offshore drilling safer than ever before.

But some Republican lawmakers have attacked the administration for moving too slowly to approve new offshore oil and gas development. These critics say Interior has imposed a so-called de facto moratorium on drilling.

Salazar slammed three bills the House of Representatives Natural Resources committee will consider on Wednesday, with provisions that would force the department to speed permitting and hold a canceled lease sale off Virginia's coast.

"I think the legislation illustrates in my view a sense of amnesia," Salazar said. "We can't afford to take that approach the future of the nation's energy security."

"If we have another Macondo blowout and we didn't have the ability to contain it, it would probably be death to oil and gas development in America's oceans," he said.

(Editing by Jeffrey Benkoe and David Gregorio)