Salazar issues new suspensions on GOM deepwater drilling

US Secretary of the Interior Ken Salazar on 13 July directed the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) to issue new suspensions of deepwater drilling on the Outer Continental Shelf (OCS). The Secretary stated that a pause is necessary to ensure that oil and gas companies implement adequate safety measures to reduce the risks associated with deepwater drilling operations and are prepared for blowouts and oil spills.

Shallow-water drilling activities can move forward if operators are in compliance with all safety and environmental requirements, including new safety and environmental requirements implemented through recent Notices to Lessees. Production activities in federal waters of the Gulf are not affected by the deepwater drilling suspensions.

“More than 80 days into the BP oil spill, a pause on deepwater drilling is essential and appropriate to protect communities, coasts and wildlife from the risks that deepwater drilling currently pose,” Secretary Salazar said. “I am basing my decision on evidence that grows every day of the industry’s inability in the deepwater to contain a catastrophic blowout, respond to an oil spill, and to operate safely.”

Secretary Salazar is basing his decision to impose new deepwater drilling suspensions on his authorities and responsibilities under the Outer Continental Shelf Lands Act (OCSLA) to ensure safe operations on the OCS. The new decision is supported by a record of existing and new information indicating that allowing new deepwater drilling to commence would pose a threat of serious, irreparable or immediate harm or damage to the marine, coastal and human environment.

In a decision memorandum to BOEM director Michael R Bromwich, Secretary Salazar said that a temporary pause on deepwater drilling will provide time to implement recent safety reforms and for:

• The submission of evidence by operators demonstrating that they have the ability to respond effectively to a potential oil spill in the Gulf, given the unprecedented commitment of available oil spill response resources that are being dedicated to the BP oil spill;

• The assessment of wild well intervention and blowout containment resources to determine the strategies and methods by which they can be made more readily available should another blowout occur; and

• The collection and analysis of key evidence regarding the potential causes of the 20 April 2010 explosion and sinking of the Deepwater Horizon offshore drilling rig, including information collected by the Presidential Commission and other investigations.

In this period, the Department of Interior and BOEM will also be issuing and implementing interim safety rules in accordance with recommendations in the 30-Day Safety Report that Secretary Salazar submitted to the president on 27 May.

The suspensions ordered on 13 July will last until 30 November 2010 or until such earlier time that the Secretary determines that deepwater drilling operations can proceed safely.

Secretary Salazar has also asked Mr Bromwich to engage in an active public outreach effort with industry, academic experts, the public and other interested parties, and to prepare a report with recommendations on deepwater drilling.

“I remain open to modifying the new deepwater drilling suspensions based on new information,” said Secretary Salazar, “but industry must raise the bar on its practices and answer fundamental questions about deepwater safety, blowout prevention and containment, and oil spill response.”

The new suspensions apply to drilling operations that use subsea blowout preventers (BOP) or surface BOPs on floating facilities. Unlike the 28 May moratorium proscribed drilling based on specific water depths, the new decision does not suspend activities based on water depth but on the basis of the drilling configurations and technologies.

However, like the deepwater drilling moratorium lifted by the District Court on 22 June, the deepwater drilling suspensions apply to most deepwater drilling activities and could last through 30 November.

According to the DOI, the new suspensions are the product of a new decision by the Secretary and new evidence regarding safety concerns, blowout containment shortcomings within the industry, and spill response capabilities that are strained by the BP oil spill. Moreover, the new decision establishes a process through which BOEM will gather and analyze new information from the public, experts, stakeholders and the industry on safety and response issues, which could potentially provide the basis for identifying conditions for resuming certain deepwater drilling activities.