Mike Soraghan, E&E reporter
Published: Thursday, November 10, 2011

Federal offshore drilling regulators today formally recommended that drillers should heed the mistakes federal investigators found when investigating the April 2010 Deepwater Horizon explosion.

The newly created Bureau of Safety and Environmental Enforcement (BSEE) today issued a “safety alert” to leaseholders and contractors working in the Gulf of Mexico. The alert summarizes the findings of the investigation by the Coast Guard and the Interior Department and makes recommendations the drillers can incorporate into their work.

“We must ensure that the lessons learned from the investigation of the Deepwater Horizon explosion and oil spill are widely disseminated and used to enhance the safety practices used by offshore oil and gas operators and contractors in their day-to-day activities,” said BSEE Director Michael Bromwich. “Issuing this Safety Alert to all oil and gas leaseholders and contractors is another method for BSEE to ensure that offshore operations are conducted in the most safe and environmentally- responsible manner.”

The explosion led to an oil spill from BP PLC’s Macondo well that lasted for months before it could be capped. Interior’s offshore drilling regulators use safety alerts to inform the offshore drilling industry about the circumstances surrounding an
incident or a near miss, and usually offer recommendations on how to avoid a repeat occurrence. The department’s recommendations cover operational issues such as negative pressure testing procedures, location of equipment on the rig, and the configuration and alignment of blowout preventer stacks.

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Special thanks to Richard Charter

http://fuelfix.com/blog/2011/11/08/obama-administration-to-unveil-5-year-offshore-drilling-plan/

Posted on November 8, 2011 at 9:43 am by Jennifer A. Dlouhy

The Obama administration is set today to unveil a plan for selling offshore drilling leases over the next five years that focuses on exploration in the Gulf of Mexico.

Interior Secretary Ken Salazar said the Gulf of Mexico is an attractive target for oil and gas development because it has the support of bordering states and the infrastructure to support that exploration.

The region also has equipment readily available to respond to oil spills and blown-out wells, including containment systems developed after the 2010 Deepwater Horizon disaster, Salazar noted.

“We see robust oil and gas development in the Gulf of Mexico,” Salazar told a meeting of the government’s Ocean Energy Safety Advisory Committee. “There are a number of reasons to move forward.”

Today’s move likely will come in the form of a proposed offshore lease program and a draft environmental impact statement – which would put the Interior Department on course to have a new plan in place when the current one expires on June 30, 2011.

President Barack Obama already offered the broad outlines of the five-year lease schedule last December, when he reversed plans to expand drilling in the Atlantic Ocean and the eastern Gulf of Mexico in response to the 2010 spill. Previously, in March 2010 – just weeks before BP’s Macondo well blew out in the Gulf – Obama had said he would consider allowing drilling at least 125 miles off the Florida Gulf Coast and would launch studies that could pave the way for exploration in the mid- and south-Atlantic.

It was unclear what lease sales – if any – the administration would plan for Arctic waters near Alaska. Federal regulators are currently reviewing plans by Shell Oil Co., to drill in the Beaufort and Chukchi seas, under leases purchased years ago.

Salazar noted that beyond the Gulf, “there are other areas in the (outer continental shelf) that are important,” but “they’re difficult” and require the government “to develop additional science (and) additional geophysical information,” as well as spill response technology.

Michael Bromwich, the head of the Bureau of Safety and Environmental Enforcement, noted the “special challenges that are presented by potential development” in the Arctic.

“The Arctic is special, it is different and it is an area that has so far been largely unexplored,” he added. “We know far less about the Arctic than we do about, for example, the Gulf of Mexico. We know there are lots of challenges we face there that we are struggling to figure out.”

Special thanks to Richard Charter

Here’s the OCS fact sheet from DOI Followed by the press statement (per Richard Charter)

The Proposed Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2012-2017 (Proposed Program) will advance safe and responsible domestic energy exploration and production by offering substantial acreage for lease in regions with known potential for oil and gas development. The Proposed Program is consistent with the Obama Administration’s Blueprint for a Secure Energy Future, which aims to promote domestic energy security and reduce oil imports by a third by 2025 through a comprehensive national energy policy.

The Proposed Program is informed by lessons learned from the Deepwater Horizon tragedy and reforms that have been implemented to make offshore drilling safer and more environmentally responsible, and to ensure that we are better prepared in case a blowout or oil spill occurs. More information on the department’s ongoing offshore reforms can be found at: http://www.boem.gov/About-BOEM/Reforms/Reforms.aspx.

MAKING MORE THAN 75% OF UNDISCOVERED RESOURCES AVAILABLE
The Proposed Program includes 15 lease sales in six offshore areas where there are currently active leases and exploration and where there is known or anticipated hydrocarbon potential. This strategy makes more than 75% of the undiscovered technically recoverable oil and gas resources estimated on the OCS available for development.

The following sales are included in the Proposed Program:

Western Gulf of Mexico: Five annual areawide lease sales beginning in the fall of 2012 that make available all unleased acreage.

Central Gulf of Mexico: Five annual areawide lease sales beginning in the spring of 2013 that make available all unleased acreage.

Eastern Gulf of Mexico: Two sales, in 2014 and 2016, in areas of the Eastern Gulf that are not currently under congressional moratorium.

Beaufort Sea: One sale in 2015 with time to learn from any interim exploration and further analyze environmental issues, subsistence use needs, and infrastructure capabilities – so that the lease sale can be tailored to balance these issues.

Chukchi Sea: One sale in 2016, with time to learn from any interim exploration and further analyze environmental issues, subsistence use needs, and infrastructure capabilities – so that the lease sale can be tailored to balance these issues.

Cook Inlet: One special interest sale including the entire planning area, which is initially scheduled for 2013, but may be moved to later in the program depending on industry interest in the sale.

ADOPTING A TARGETED, REGION-SPECIFIC APPROACH
The Proposed Program is tailored to specific regional considerations like resource potential, adequacy of infrastructure including oil spill response capabilities, state interests and concerns, and the need for a balanced approach to our use of natural resources. By focusing on six offshore regions, the Proposed Program advances a strategy that Secretary of the Interior Ken Salazar announced on December 1, 2010.

Gulf of Mexico: The Gulf of Mexico (GOM) currently supplies more than a quarter of the nation’s oil production, and the Central and Western GOM remain the two offshore areas of highest resource potential and industry interest. The infrastructure supporting the oil and gas industry, including subsea containment and oil spill response resources, is the most mature and well developed in these regions. Therefore, the Proposed Program schedules annual, areawide lease sales in both the Western and Central GOM throughout the five-year leasing program. The program also includes lease sales gauged to accommodate anticipated industry interest in the portion of the Eastern GOM that is not currently subject to congressional moratorium. Other areas in the Eastern Gulf of Mexico – including the Straits of Florida – are not included in this Proposed Program because they are under a congressionally-mandated leasing moratorium until June 30, 2022. (bold added)

Alaska: The Proposed Program represents a balanced and careful approach to offshore development in the Arctic that accounts for resource potential; environmental needs; and the social, cultural, and subsistence needs of Native Alaskan communities. Single sales in each of the Beaufort and Chukchi Sea planning areas are placed late in the schedule to account for the significant inventory of yet-undeveloped leases in these frontier areas and to:

1) facilitate the development, synthesis, and consideration of further scientific study relevant to oil and gas exploration and development in the Arctic;

2) allow time for the analysis and evaluation of data collected from any exploration activity under current leases in the Beaufort and Chukchi Sea planning areas;

3) enable further long-term planning and development of spill response preparedness and infrastructure, building on current plans that could support limited activity in the near-term; and

4) support a leasing strategy that is tailored to both the specific resource opportunities and the special environmental and subsistence concerns presented in these regions.

Atlantic: This Proposed Program does not include lease sales in the Atlantic region. While an OCS development strategy announced in 2009 included the Mid- and South- Atlantic planning areas under consideration for potential inclusion in the Proposed Program, a number of specific considerations supported the Secretary’s decision not to include these areas, including the current lack of infrastructure to support oil and gas exploration and development, as well as spill preparedness and response. Additionally, there remain complex issues relating to potentially conflicting uses, including those of the Department of Defense. As the oil and gas resource potential in the Mid- and South Atlantic planning areas is not well understood, the Bureau of Ocean Energy Management is moving forward to expeditiously to facilitate resource evaluation in these areas, including conducting a programmatic Environmental Impact Statement relating to seismic surveys in the Atlantic.

Pacific: Areas off the Pacific coast are not included in this Proposed Program, which seeks to accommodate the recommendations of governors of coastal states and of state and local agencies – an important priority established by the OCS Lands Act. The exclusion of the Pacific Coast is consistent with state interests, as framed in an agreement that the governors of California, Washington and Oregon signed in 2006, which expressed their opposition to oil and gas development off their coasts.

PRESS RELEASE:

Date: November 8, 2011
Contact: Melissa Schwartz (202) 208-3599
*** EMBARGOED UNTIL 11:50 A.M. EST ***
Secretary Salazar Announces 2012-2017 Offshore Oil and Gas Development Program

WASHINGTON DC – Secretary of the Interior Ken Salazar today announced the Proposed Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2012-2017, which makes more than 75 percent of undiscovered technically recoverable oil and gas resources estimated in federal offshore areas available for exploration and development.

The Proposed Program, which is in line with President Obama’s direction to continue to expand safe and responsible domestic production, includes six offshore areas where there are currently active leases and exploration, and where there is known or anticipated hydrocarbon potential.

It schedules 15 potential lease sales for the 2012-2017 period – 12 in the Gulf of Mexico and three off the coast of Alaska.
“Expanding safe and responsible oil and gas production from the OCS is a key component of our comprehensive energy strategy to grow America’s energy economy, and will help us continue to reduce our dependence on foreign oil and create jobs here at home,” said Secretary Salazar. “This five-year program will make available for development more than three-quarters of undiscovered oil and gas resources estimated on the OCS, including frontier areas such as the Arctic, where we must proceed cautiously, safely and based on the best science available.”

The Proposed Program will promote safe and responsible domestic energy production by offering substantial acreage for lease in regions with known potential for oil and gas development.

“This proposal recognizes the need to proceed carefully and in a manner that protects human safety, coastal areas, and the environment,” said Bureau of Ocean Energy Management Director Tommy P. Beaudreau. “This Proposed Program both promotes responsible development and is informed by lessons learned from the Deepwater Horizon tragedy and the reforms that we have implemented to make offshore drilling safer and more environmentally responsible.”

The Proposed Program also reflects the need for a regionally tailored approach to offshore development that accounts for issues such as current knowledge of resource potential, adequacy of infrastructure including oil spill response capabilities, and the need for a balanced approach to our use of natural resources. The majority of lease sales are scheduled for areas in the Gulf of Mexico, where resource potential and interest is greatest and where infrastructure is most mature.

“A key part of safe and responsible development of our oil and gas resources is recognizing that different environments and communities require different approaches and technologies. In Alaska and off its coast, the Proposed Program recommends that the current inventory of already-leased areas in the Arctic should be expanded only after additional evaluations have been completed, and in a manner that accounts for the Arctic’s unique environmental resources and the social, cultural, and subsistence needs of Native Alaskan communities,” said Deputy Secretary David J. Hayes.

The Proposed Program includes lease sales in the Beaufort and Chukchi Seas, but the single sales are scheduled late in the 5-year period to facilitate further scientific study and data collection, and longer term planning for spill response preparedness and infrastructure. The proposal suggests that any lease sales in the Arctic be tailored to protect sensitive environmental resources, including those accessed by Native Alaskans for subsistence uses.

The Proposed Program will be open for significant public comment and consideration. Following public comment and review periods for the proposed program, as well as the accompanying Draft Environmental Impact Statement, a Proposed Final Program (PFP) and a Final EIS will be submitted to the President and Congress.

The OCS Lands Act requires that the Secretary of the Interior prepare a 5-year program that includes a schedule of oil and gas lease sales and indicates the size, timing and location of proposed leasing activity as determined by the Secretary to best meet national energy needs for the 5-year period following its approval, while addressing a range of economic, environmental and social considerations.

The Proposed Program is consistent with the Obama Administration’s Blueprint for a Secure Energy Future, which aims to promote domestic energy security and reduce oil imports by a third by 2025 through a comprehensive national energy policy.
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Special thanks to Richard Charter

http://www.orlandosentinel.com/news/opinion/os-ed-front-center-110711-20111104,0,3741117.story

Orlando Sentinel
November 7, 2011

Just one more good reason to end the Cuban embargo.……DV

Florida’s former governor and senator, who co-chaired the National Commission on the Deepwater Horizon Oil Spill, says a planned oil rig off the north coast of Cuba poses a risk to Florida. Particularly because the two nations don’t have an agreement on how they’d cooperatively trouble-shoot an oil spill. Graham tells editorial writer Victor Schaffner that non-governmental delegations from the U.S. are meeting in Cuba, but, Graham says, “there’s going to have to be some involvement by the U.S. government” to bring about an agreement. “Time is not your ally” after a spill, Graham says. An accident off Cuba could threaten the Keys and the entire east coast of Florida. And, he says, the Chinese-built, semisubmersible rig could be drilling for oil as soon as January.

Special thanks to Richard Charter

http://www.naplesnews.com/news/2011/nov/04/cuban-waters-test-oil-rig-florida-keys-US-monitor/

By ERIC STAATS
Posted November 4, 2011 at 9 p.m.

Spanish oil giant Repsol could begin drilling in late December or early January at a spot along the northern shore of Cuba about 90 miles from Key West. From there, the Gulf Stream could pick up any oil spill and carry it perilously close or even into mangrove islands and onto beaches in the Florida Keys, South Florida and up the U.S. east coast.

NAPLES – With an oil drilling rig on its way to Cuban waters from Singapore, U.S. officials are trying to piece together a strategy for what to do should a spill from the exploratory well threaten the Florida coastline. The job is complicated by diplomatic tensions between the United States and Cuba and the domestic politics of the U.S. embargo of Cuba.

“They’re proceeding cautiously, and in my opinion, a bit too cautiously,” said Daniel Whittle, senior attorney and Cuba Program director at the Environmental Defense Fund. The clock is ticking: Spanish oil giant Repsol could begin drilling in late December or early January at a spot along the northern shore of Cuba about 90 miles from Key West. From there, the Gulf Stream could pick up any oil spill and carry it perilously close or even into mangrove islands and onto beaches in the Florida Keys, South Florida and up the U.S. east coast.

The Interior Department and U.S. Coast Guard have made the rounds of House and Senate committees in the past few weeks to reassure lawmakers that they are on the job _ even without Cuba at the table. In talks with U.S. officials since February, Repsol has pledged that it will adhere to U.S. drilling regulations while working in Cuba and has agreed to allow the United States to inspect the rig before it enters Cuban waters, the company and U.S. officials say.

U.S. regulators, though, have no enforcement power and the inspections will not be as complete as they otherwise would be if they are conducted at the drilling site, Michael Bromwich, director of the Interior Department’s Bureau of Safety and Environmental Enforcement, recently told a House subcommittee.

About a dozen inspection points normally performed on U.S. rigs would be skipped, including testing the blowout preventer and how well the rig is secured in place, Bromwich said. “It’s a lot better than nothing at all, but it’s no equivalent,” Bromwich said.
He said Repsol has an incentive to cooperate with U.S. authorities to protect extensive oil interests it has in the northern Gulf of Mexico.

Company spokesman Kristian Rix said Repsol is just being a “responsible operator.” “We’re happy to cooperate with U.S. authorities and pleased they’ve taken a keen interest,” Rix said. U.S. Rep. David Rivera, R-Miami, is among a contingent of South Florida lawmakers who say the Obama administration’s work with Repsol is inconsistent with U.S. policy toward Cuba. The lawmakers, including Rivera, whose district includes eastern Collier County, sent a letter to Obama this week asking that the Commerce Department conduct its own inspection of the rig to be sure it complies with U.S. trade laws. The letter also requests “clarity” about how the United States is applying embargo rules that prohibit the rig from having more than 10 percent U.S. parts.

The rig getting all the attention, the Scarabeo 9, is new – built in China for an estimated $750 million for Italian company Saipem, said Lee Hunt, president of the International Association of Drilling Contractors. “It’s a modern, even ultra-modern, rig really,” Hunt said, noting that a half-dozen similar rigs already are working in the field and have a good safety record.

Still, the Deepwater Horizon spill in the northern Gulf of Mexico was a wakeup call that deepwater drilling is inherently risky, said Whittle, with the Environmental Defense Fund. With friendlier countries, such as Mexico and Canada, the United States has detailed agreements about how they will coordinate responses to oil spills that threaten international borders. Whittle said the United States needs a similar protocol with Cuba, mirroring agreements by which the National Hurricane Center works with Cuban forecasters and sends hurricane hunter aircraft into Cuban airspace.

While talks with Repsol are good, it is no substitute for direct talks with Cuba, he said. Until then, he said, the United States remains unprepared to deal with a spill in Cuban waters. U.S. authorities have overseen tabletop oil spill response exercises at Repsol’s offices in Trinidad and, in the United States, are working with state and local agencies on contingency plans, Bromwich said.

“They have plans and you know, you just hope that they’ve put in all the safeguards they need and it doesn’t happen,” Gov. Rick Scott told the Naples Daily News editorial board. In an interview with the Naples Daily News editorial board in October, Florida Gov. Rick Scott said drilling off Cuba is Florida’s “biggest risk” for a spill. He said he has met with the Coast Guard to discuss response plans. “They have plans and you know, you just hope that they’ve put in all the safeguards they need and it doesn’t happen,” Scott said.

U.S. Coast Guard Vice Admiral Brian Salerno told the House subcommittee this week that the Seventh District in Miami will conduct another spill response exercise later this month. The Treasury and Commerce departments are issuing licenses to U.S. companies to allow them to contract with Repsol to provide equipment to respond to any spill despite the Cuban trade embargo.

Critics say the licensing process is too cumbersome and that the federal government should instead issue so-called “general licenses” that can be issued more quickly and with less red tape.

Bromwich told the House subcommittee that he has a “high level of confidence” that the necessary licenses will be in place when drilling starts off Cuba. “I think we’re at a pretty good place right now to get everything that’s needed,” he said. Data from the Treasury and Commerce departments about the numbers of licenses issued and to which companies wasn’t immediately available.A Fort Lauderdale-based oil spill response group, Clean Caribbean and Americas, has made no secret of its license to provide equipment to contain a spill.

Another company, Houston-based Wild Well Control, also has been issued a license to send equipment that would cap a leaking well, but the capping stack is in Scotland and could take days to get to Cuba, said Hunt, of the drilling contractors association.
Hunt said another oil spill response contractor based in Houston, Helix Energy Solutions, has applied for a license to provide similar equipment.

Oil industry expert Jorge Piñon said it is naïve to think that a handful of licenses will be adequate to respond to a Cuban oil spill. He said general licenses are “urgently needed.” Piñon, a former oil company executive and visiting research fellow at the Cuban Research Institute at Florida International University, said his concerns about drilling in Cuban waters reach beyond Repsol. When Scarabeo 9 is finished at the Repsol tract, it will be moved to its next job at the site of another new well in Cuban waters planned by Petronas, the state-run oil company of Malaysia. “We don’t even have a phone number for somebody to call at Petronas,” Piñon said. “That to me is totally unacceptable.”

Special thanks to Richard Charter.