As offshore drilling moratorium nears an end, questions about what's next

Oil giant BP laid much of the blame for the rig explosion and the massive Gulf of Mexico spill on workers at sea, other companies and a complex series of failures in an internal report Wednesday.
By Juliet Eilperin and Steven Mufson
Washington Post Staff Writers
Thursday, September 30, 2010; 12:17 PM

Interior Secretary Ken Salazar is getting ready to take his finger off what he has called the "pause" button on deepwater oil drilling, with environmentalists and oil industry executives alike worried about what comes next.

Salazar received recommendations Thursday from Michael Bromwich, head of the Bureau of Ocean Energy Management, Regulation and Enforcement, based on information gathered at public forums and private meetings in the wake of the BP oil spill. Salazar could act on the BOEMRE report well before the drilling ban's expiration date, Nov. 30.

While many Gulf Coast lawmakers and residents have been badgering the Obama administration to lift the deepwater moratorium, key industry and administration officials are struggling with the larger questions: not when drilling will resume, but how and where.

"We're stuck between 'drill, baby, drill' and the 'BP drilling disaster,' and no one knows which argument will win," said Athan Manuel, director of the Sierra Club's lands protection program.

Separate from Bromwich's report, Salazar on Thursday announced the federal government was adopting two new regulations for offshore drilling, including a drilling safety rule and a workplace safety rule. Both would impose new requirements on operators in the gulf and elsewhere.

The drilling rule dictates specific procedures aimed at preventing a blowout, including cementing and casing practices and the appropriate use of drilling fluids. It also increases oversight of mechanisms--such as the blowout preventer--that would shut off the flow of oil and gas in an accident, and requires operators to secure independent and expert reviews of their well design, construction and flow intervention mechanisms.

The workplace safety rule forces offshore operators to have what an Interior Department statement describes as "clear programs in place to identify potential hazards when they drill, clear protocol for addressing those hazards, and strong procedures and risk-reduction strategies for all phases of activity, from well design and construction to operation, maintenance, and decommissioning."

Energy industry officials said they would review the regulations and offer comments as part of the rule-making process. The drilling safety rule will take effect immediately on publication. Erik Milito, upstream director for the American Petroleum Institute, said, "Getting a good offshore safety rule in place is critical to the nation's energy future. The gulf and other parts of the nation's offshore areas are vitally important to helping meet the nation's future energy needs. The rule will affect every offshore energy project for years to come. It has to be right."

In the report Bromwich submitted to Salazar Thursday, he proposed new rules for drilling, as well as contingency measures to bolster the industry's response to any future spills.

Oil and gas executives are steeling for a slower and more costly permitting process that could hinder drilling even after the moratorium is lifted. And they worry that they won't be able to develop new areas - from Alaska to the East Coast - that President Obama outlined when he unveiled his five-year leasing plan on March 31, a few weeks before the BP blowout.

Environmentalists, in contrast, are hoping that the congressional limits on offshore drilling that expired two years ago are reimposed, or at least that the pace of development is slowed.

And the administration faces difficult questions about whether - and under what circumstances - it will allow leasing in areas from Alaska to off the coast of Virginia before Obama's first term ends.

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