Loyola University Chicago School of Law, JD 2019
A government agency created in response to the 2011 BP oil spill is proposing changes to its rules surrounding offshore drilling. The Bureau of Safety and Environmental Enforcement (BSEE) was established to replace the former Minerals Management Service (MMS) agency in response to its perceived conflict of interest and poor regulatory oversight. Since 2011, the BSEE focused exclusively on safety. Now it seems its changing its tune to promote more offshore oil and gas drilling.
The New Rules
The new rules are designed to meet President Trump’s goal of energy dominance and come just after an announcement by the Trump Administration which stated that they intend to roll back an Obama-era ban on offshore drilling. The BSEE stated that by ramping up domestic oil and gas output and reducing regulations, it estimates it will save the energy industry $228 million over a decade. The rules relax the requirements to have backup plans for blowout preventers, which are valves used to prevent oil spills. They would also eliminate a requirement that the BSEE confirm that the amount of pressure drillers used in a new well is safe. Additionally, the proposal would relax requirements for onshore remote monitoring of drilling.
Are the Rules Necessary?
The BP spill was the biggest in American history. It stressed the importance of creating an agency charged with safeguarding offshore drilling. This was the objective of the BSEE. Now environmentalist and former Interior officials are concerned these new rules stray from prioritizing safety. Scott Angelle, the current director of the BSEE, denies any evidence of systemic regulation problems at the time of the BP spill. However, reports by the U.S. Chemical Safety Board and a joint investigation by the U.S. Coast Guard and the Interior Department state otherwise. The reports conclude that overall MSS regulations were inadequate to address the risks of deepwater drilling. The oil industry had complained that the response to the BP spill was too burdensome and needed to be relaxed to keep the U.S. in competition with Brazil, Mexico and other deepwater drillers. Despite these complaints, a report by energy consultancy Wood Mackenzie concluded that the Gulf of Mexico is expected to pump more oil than ever in 2018. In regard to the savings boasted by the BSEE, reducing $228 million in compliance costs is very modest relative to the $30 billion oil companies earn annually. Industry decisions on offshore drilling are primarily driven by fluctuations in the price and production of oil and not the costs of regulations.
In sum, the regulations are not too burdensome. As far as increasing domestic oil production, while the rule changes might cut insignificant costs, it’s unlikely that they alone will open doors to many new drilling projects. On its face, the proposal seems to suggest a reversion to regulations that over rely or industry-preferred practices and standards.