Trump Gives Oil Drillers More Leeway by Easing Post-Spill Rule

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May 3, 2019

A NASA photograph shows the extent of the Gulf oil spill on May 24, 2010, more than a month after the blowout. Photo:

By Jennifer A. Dlouhy (Bloomberg) — The Trump administration is giving oil companies more flexibility when drilling offshore, by easing Obama-era mandates imposed in response to the 2010 Deepwater Horizon disaster that killed 11 workers and unleashed the worst oil spill in U.S. history.

The Interior Department measure rewrites some provisions of a 2016 well-control rule, following industry complaints it imposed rigid and arbitrary requirements that ignore unique characteristics at offshore drilling sites, including their varying geological conditions, pressures and temperatures.

Interior officials were touting the measure Thursday at Port Fourchon in Louisiana, one of the major supply hubs for drilling rigs in the Gulf of Mexico. They have cast the changes as modest modifications that would preserve the safety of drilling operations while giving oil companies more leeway to manage their operations offshore.

The original rule prescribed strict mandates for the design of offshore wells, including how much pressure must be maintained inside them.

The revision alters requirements for real-time monitoring of offshore operations and third-party certifications of emergency equipment that can be summoned as a last resort to block explosive surges of oil and gas flowing up from wells. Many of the final changes — affecting about a fifth of the original rule — were already outlined in a proposal released last year.

The underlying requirements were finalized by the Obama administration in April 2016 in response to recommendations from investigators who probed BP Plc’s Macondo well failure. The 2010 disaster, caused when flammable gas surged out of the well and ignited, killed 11 workers on Transocean Ltd.’s Deepwater Horizon drilling rig and unleashed a massive oil spill in the Gulf.

Conservationists and safety advocates warned the planned rollbacks in the agency’s proposed version imperil the environment, the economy and workers’ lives.

“The Trump administration is rolling back mechanisms and technology designed to protect rig workers and prevent another disaster offshore,” said Chris Eaton an oceans attorney with Earthjustice. “These rollbacks are a handout to oil company CEOs at the cost of endangering the lives of their workers and heightening the risk for another environmental catastrophe off America’s coastlines.”

Oil industry leaders stress that the incident prompted a suite of critical reforms that will not be undone by the Trump administration’s rule changes. Oil companies will still be governed by federal requirements to holistically assess and manage their offshore facilities. Drilling standards imposed with months of the spill also will be untouched, as will voluntary industry efforts to promote safety.

Supporters argue the rewrite will better align federal requirements with voluntary industry standards, decrease downtime on rigs and lead to more than $900 million in oil industry savings over the next decade. The changes will provide flexibility for oil companies to adapt to various offshore conditions and foster innovations, the American Petroleum Institute said.

Tyler Gray, president of the Louisiana Mid-Continent Oil and Gas Association, cheered the move, crediting the Trump administration with replacing a flawed and “one-size-fits-all approach” with requirements that better “recognize the variability of operations and engineering specific to each well.”

© 2019 Bloomberg L.P

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