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Industry may see more flexibility under Trump administration, but focus on operational risk unlikely to change

Michael D. Farber, Partner at Van Ness Feldman, said a new administration is not expected to bring drastic changes to BSEE’s focus on operational risk. Mr Farber provided a regulatory forecast at the IADC Houston office on 19 January.
Michael D. Farber, Partner at Van Ness Feldman, said a new administration is not expected to bring drastic changes to BSEE’s focus on operational risk. Mr Farber provided a regulatory forecast at the IADC Houston office on 19 January.

By Alex Endress, Editorial Coordinator

The oil and gas industry may be looking for changes to be made under the Trump administration, such as reversing the withdrawal of Arctic and Atlantic acreage from leasing and reversing the denial of Atlantic seismic geophysical and geological permits. However, when it comes to the Bureau of Safety and Environment Enforcement (BSEE), there will likely be policy continuity in the agency’s focus on operational risks, according to Michael D. Farber, Partner at the law firm Van Ness Feldman, and R. Scott Nuzum, Counsel at Van Ness Feldman. “When you think about the person who holds the job of BSEE director, each night before that person’s head hits the pillow, (operational risk) is the last thing they will think about – is something going to happen on my watch?” Mr Farber said. The attorneys presented a regulatory forecast for the new administration in Houston on 19 January.

Mr Farber served as Senior Advisor to the BSEE Director from 2010–2016, and Mr Nuzum served at the White House Council on Environmental Quality from 2010–2011 and within the Office of the Solicitor of the US Department of the Interior from 2012–2014. Mr Farber and Mr Nuzum both currently provide strategic counsel to oil and gas companies in Van Ness Feldman’s Washington, DC, office.

R. Scott Nuzum, Counsel at Van Ness Feldman, said that a new administration could forgo proposed changes to the Bureau of Ocean Energy Management’s Air Quality Rule during a regulatory forecast at the IADC Houston office on 19 January.
R. Scott Nuzum, Counsel at Van Ness Feldman, said that a new administration could forgo proposed changes to the Bureau of Ocean Energy Management’s Air Quality Rule during a regulatory forecast at the IADC Houston office on 19 January.

BSEE is unlikely to make any changes or reversals to recent actions taken to support operational safety, such as the creation of SEMS, the Well Control Rule and the Interagency Bolts Action team to prevent subsea bolt and connector failures in safety-critical subsea equipment. “You might reasonably expect a little bit more flexibility around resolving some of the ambiguities or some of the conflicts within the Well Control Rule, but we should expect BSEE to continue to thoroughly investigate major offshore incidents,” Mr Farber said.

One aspect of the Well Control Rule that the current administration could walk away from is the implementation of the BSEE-approved verification organization (BAVO) requirements in the Well Control Rule, which appoints certain organizations to be in charge of verifying a variety of information and documentation of specific types of offshore equipment. “The requirement to start using a BAVO becomes effective a year after BSEE finalizes its approved list of BAVOs, so if the incoming director doesn’t like the concept, BSEE may not finalize an approved list within that director’s tenure,” Mr Farber said. The BAVO requirement could increase the industry’s cost to implement the new Well Control Rule, but it’s not yet clear what alternatives to the BAVOs would be explored, he said.

Another change that is possible under the new Administration relates to the Bureau of Ocean Energy Management’s Air Quality Rule. BOEM has stated that its revisions to the rule are meant to reduce potentially harmful chemical exposure to the environment. However, the industry has said that the rule uses an updated formula for emissions that could result in unrealistic calculated measurements, adding unnecessary burden to offshore drilling operations.

“Since that is not a final rule, and there is no judicial mandate that those rules be promulgated, the Trump administration need not do anything,” Mr Nuzum said. “They can choose to let that language essentially just wither and die. The Trump administration would be well advised to tackle an air quality rule that is more favorable and provides a more workable regime to engage with activities on the Outer Continental Shelf.”

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