New Deep Water Drilling Regulations and GOM Moratorium

Posted: June 7th, 2010 by: h2

Here’s an early draft of the new deep water drilling regulations. If you scan them, you can basically see all the points where BP’s cost cutting efforts created the scenario where a blowout could occur. There’s also a NY Times article, In Gulf, It Was Unclear Who Was in Charge of Rig, that helps show where the lapses occurred that these new regulations will hopefully help prevent in the future.

You can bet there’s a lot of drillers out there now who are cursing BP loudly…. but sometimes this is what it takes to unroll decades of loose industry/government coziness, a process that got even worse under the GW Bush group, where the MMS/Oil industry links and connections became almost a farce in terms of ensuring strict regulations would be carried out and enforced.

New deepwater exploratory drilling will be on hold for six months pending the findings and recommendations of a presidential commission investigating the causes of the explosion that sank Transocean’s Deepwater Horizon rig leased by BP Plc.

Such a lengthy moratorium could impact future U.S. oil and natural gas output. U.S. Gulf offshore oil operations produced 1.6 million barrels of oil per day in 2009, accounting for 8 percent of U.S. liquid fuel consumption, according to the U.S. Energy Information Administration.

In addition to the deepwater drilling moratorium, the Interior Department has also outlined a series of potentially costly new safety rules and standards that oil companies will have to contend with.

Here some details about the drilling ban and safety measures:


* The six-month moratorium will apply to all new exploratory drilling at depths more than 500 feet.

* Thirty-three exploratory rigs in the Gulf of Mexico will have to stop drilling operations as soon as safely possible and remain out of action for six months.

* Companies that have an approved permit to conduct exploratory drilling in deepwater, but have not started their project, will not be allowed to start drilling during the moratorium.

* Shallow water drilling and wells already in production will be able to continue work under the moratorium.

* As part of the ban, Royal Dutch Shell’s proposal to drill exploration wells in the Arctic this summer has been postponed until 2011.

* Upcoming lease sales in the Gulf of Mexico and off Virginia have been canceled.


* Blow-out preventers (BOPs) on floating drilling operations need to certified by an independent third party. The department will also develop formal equipment certification standards for BOPs.

* Within a year, BOPs on all operations will be required to have two sets of blind shear rams spaced at least four feet apart.

* Subsea BOPs will require remote operated vehicles that are able to close all shear and pipe rams, close choke and kill valves and unlatch the lower marine riser package.

* Interior will develop surface and subsea methods to test capabilities of remotely operated vehicles and BOPs.

* Interior will conduct more in depth safety inspections that will include witnessing actual tests of BOP equipment.

* Rig operators will be required to undergo a series of procedures and checks before displacing kill-weight drilling fluid from the wellbore.

* All well casing and cement designs for new floating drilling operations will have to be certified by a professional engineer.

* Interior will develop specific cementing requirements.

* Interior will expand safety and training programs for rig workers.
Factbox: Deepwater drilling ban and new safety rules

How to Make Deep Water Drilling Safer?

This brief exchange on today’s BP’s Deepwater Oil Spill – Closing the Relief Ports – and Open Thread shows some very common-sense understanding of how to improve drilling safety.

cptdrillersails on June 7, 2010 – 12:41pm Permalink | Subthread | Parent | Parent subthread | Comments top

None of this means a damn thing if the people who are responsible for a rig’s productivity are also tasked with ensuring its safety.

I have yet to hear one offshore person explain why there isn’t a completely separate safety team whose sign off is required before major, and potentially dangerous, operations such as removing the mud from a well, ensuring proper cementing, etc. are either started or declared complete and successful. This is standard practice for oil refineries, pipelines, chemical plants, etc.. It is also an administrative control that is implimented at the corporate level. When people’s jobs and compensation are based on no shutdowns based on safety work stoppages, you can’t expect them to err on the side of caution and stop work for an unsafe condition or practice.

The reason no explanation is given for this lack of administrative/institutional control of safety is that there is no explanation possible.
ROCKMAN on June 7, 2010 – 4:03pm Permalink | Subthread | Parent | Parent subthread | Comments top

cp — Actually some companies (unfortunately not all) take a very proactive approach to safety. Most would be surpised to learn that one of the most safety minded companies I’ve consulted for is ExxonMobil. I think I recently read that they had fewer MMS fines than any other company for the last X years. I suspect the Valdez incident has a lot to do with it. A few years ago while drilling off the west coast of Africa they completely shut down ops on the drill ship for half a day to get the attention of local hands who were having progressively more close calls. And I’m not talking about well kicks or a blow out. Things like dropping unsecured welding bottles when moved with the crane, hitting soft metal connections with the wrong type hammer (i.e. flying metal shards), not wearing safety glasses. I once had an Exxon saftey officer compliment me for keeping one hand on the rail when I came down a flight of stairs from the chopper pad. Other hands that didn’t were made to watch 4 hours of the same very boring safety films we had all seen 100X.

But I fully agree with you re: the conflict between saving time, making bonuses and being safe. I mentioned a while ago how I think DW drilling could be made much safer: independent third parties monitoring ops. With the authority of the MMS they could write a $100,000 fine on the spot or even shut down ops for 24 hours (costing north of $600,000). How much would this add to drilling costs? A fraction of 1% of the cost to drill a DW well. In the long run it might even save companies money: fewer lost time accidents and lower insurance premiums.

Note a few things here: 1.- you can have fairly safe drilling and a safety oriented company culture. 2.- you can enforce such a culture, repeatedly. So take that into account when considering what BP is trying to sell the public re its safety practices. 3. – the group that insures safe operations cannot be the same group that is pressured to drill the well as fast as possible to cut/save costs. 4. – and, of course, the obvious: the company that is to be watched cannot, in the end, be the final watcher in the chain. That’s a pure conflict of interest. But they can do a much better job watching themselves, and some do.

One Response to “New Deep Water Drilling Regulations and GOM Moratorium”

  1. h-1 says:

    [Update]New regulations for shallow waters just coming out now:

    June 9 (Bloomberg) — Oil and gas companies drilling in the Gulf of Mexico’s shallow waters must verify that they meet new requirements for blowout preventers by June 17, U.S. regulators said.

    Companies will have to get an independent third party to confirm that the devices to stop spills work and are compatible with well locations, the Interior Department said in a statement yesterday. Those that don’t comply will be subject to shut-in orders, meaning operations on the rigs may be halted.
    Shallow-Water Drillers Must Verify Blowout Devices, U.S. Says