November 21, 2011 Articles

Compliance Issues on the OCS Post-Macondo

The 2010 Gulf oil spill has generated an extraordinary body of new environmental regulations aimed at overseeing offshore drilling.

By Anthony C. Marino – November 21, 2011

In the aftermath of the explosion on the Deepwater Horizon on April 20, 2010, which killed 11 workers, the U.S. government has become more vocally and visibly involved in regulating the oil and gas industry. The Macondo incident continues to generate new permitting requirements, enhanced financial spill obligations for operators, and an extraordinary body of new environmental regulations aimed at overseeing offshore drilling.

New to the pre-Macondo world has been the issuance of numerous notices to lessees (NTL), introducing new regulations. The Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE) (formerly the Mineral Management Services, or MMS) has used these NTLs to set out new requirements requiring reexamination of the environmental assessment procedure and archaeological mitigation requirements. Other requirements set out changes in the methodology for calculating worse case discharges  and require CEOs of operating companies to issue certifications of compliance and BOEMRE approval of Oil Spill Financial Response (OSFR) plans prior to issuing applications for permits to drill.

Other regulations came in the form of interim safety measures rules that affect blow-out preventers (BOP), cementing requirements, and well-control equipment. Equally troubling were final regulations issued by the BOEMRE on October 15, 2010, requiring operators to develop and implement Safety and Environmental Management Systems (SEMS) for oil and gas and sulphur operations on the Outer Continental Shelf by November 15, 2011.

On October 21, 2011, the Bureau of Safety and Environmental Enforcement (BSEE) issued NTL No. 2011-N09, in an attempt to (1) clarify the policy, procedures, and requirements for OCS lessees and operators required for implementing the SEMS Programs for OCS Oil, and (2) “describe the anticipated interactions between BSEE personnel and the operator community.”

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