The Issue

ROBUST ENERGY PRODUCTION OFFSHORE REQUIRES COMMON-SENSE REGULATION

Shallow water operators in the Gulf of Mexico have become ever more important to the U.S. economy and U.S. energy security in recent years. A few years ago, the bulk of shallow-water production mostly involved natural gas, which has become abundant thanks to new discoveries and the use of new technologies on land. Today, shallow water drillers are focused on producing oil and natural gas liquids that turn into products ranging from gasoline to liquids derivatives that supply the American chemical industry. While fundamental market demand for these products affects the health of the offshore energy industry, the government’s offshore regulatory regime ultimately determines outcomes in the Gulf.

Leadership changes at the Department of the Interior have been helpful in restoring a steady flow of permit and plan reviews in the Gulf. Yet more work remains to be done to ensure that the Gulf is contributing to U.S. energy production at a level that reflects its true potential.

New regulations already in the pipeline could have a major impact on our industry, including offshore safety management systems, equipment such as BOPs, and the final outcome of spill response plan requirements. Industry would like to see the timing and outcome of permit approvals become more systematic and predictable over the next few years, In addition, the administration must ensure that the new Investigations and Review Unit (IRU) arm of the Bureau of Safety and Environmental Enforcement (BSEE) allows safe and responsible offshore production to continue its course.

Shallow water operators have long performed environmentally-sensitive exploration in the Gulf in a manner that maintains the safety of their employees. For more than six decades, offshore shallow water drilling operations have been conducted safely and with minimal incident, focusing on low-risk wells in mature, predictable and known reservoirs. Our employees use some of the best technologies in the world to manage risk, such as blowout preventers located on the drilling rig that are constantly maintained and can be instantly deployed in the event of an emergency. In the last 15 years, shallow water operators have drilled over 11,000 wells, with a combined total of 15 barrels of oil spilled during blowout events.

The importance of Gulf energy output must be affirmed at all levels of the administration during the next four years if it is to fulfill its role in driving our country’s broader economy. The most effective regulatory approach is based around principles of clarity and simplicity. Our industry cannot be treated as a test-case for an endless stream of regulations and feel-good enforcement measures – we need clarity and predictability in order to produce energy in the Gulf. The U.S. economy and U.S. energy security demand that Gulf energy producers be at our best, safely and responsibly producing robust quantities of fuel.