2013IADC, Regulation, and LegislationJanuary/February

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IADC, NOIA see broad impacts from EPA suspension of BP

The US EPA’s decision to ban BP from bidding in future offshore US lease sales could have a hugely negative ripple effect on drilling contractors and the rest of the offshore industry, according to a press release issued jointly by IADC and the National Ocean Industries Association (NOIA) in late November.

The offshore oil and gas industry in the Gulf of Mexico supported more than 200,000 American jobs in 2010 and contributed nearly $80 billion in revenues to the US government from 2001-2010.

IADC and NOIA stated that EPA’s suspension may be overly punitive, considering BP’s diligent efforts to work with the federal government on cleanup and restoration efforts and given the potential far-reaching impacts of the action.

“We are hopeful that the offshore industry, the Gulf region and the federal government can benefit from BP’s participation in the upcoming Central Gulf sale and future offshore lease sales,” said Brian Petty, IADC executive VP of government and regulatory affairs.

IADC issues appeal on 46 USC 8701

IADC, along with the US Offshore Marine Service Association (OMSA), issued a joint letter on 28 November to Rear Admiral Ray A. Nash, Commander of the Eighth Coast Guard District, regarding the new interpretation and application of 46 USC 8701. The law governs documents required by merchant mariners.

The latest appeal noted that the new application of the law, unchanged since 1983, appears to violate the requirements of the Administrative Procedures Act and requested Rear Admiral Nash reconsider his previous denial.

IADC and OMSA asked to participate in a meeting at US Coast Guard headquarters to discuss the possible severe consequences of the reinterpretation.

Intangible Drilling Costs Coalition strongly opposes tax changes

IADC, along with 33 other associations, signed a letter to members of the US Congress on 28 November as part of the Intangible Drilling Costs (IDC) Coalition.

The coalition expressed concern that future tax reforms could seek to limit or eliminate the current deductibility of IDCs. The tax code currently allows operators to deduct expenses, such as labor, fuel, repairs, hauling and other non-salvageable expenses, required for the drilling of oil and gas wells as they are incurred.

The letter went on to detail ramifications of such reforms, noting restrictions on expensing IDCs would discourage new US oil and natural gas exploration and undermine energy security in the US. Signees stressed new investment in American energy as critical to meeting future energy demand, boosting US energy security and protecting and creating jobs.

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