OTC 2014: Beaudreau commends industry on post-Macondo improvement

The departing director of the BOEM is confident that operators, service companies and regulators can continue to work together.

OTC 2014 Beaudreau commends industry on post-Macondo improvement

Offshore Energy Today is sharing the following article with permission from OTC 2014.

By Rhonda Duey, Hart Energy


Two months after the Deepwater Horizon catastrophe, Tommy Beaudreau was brought on board to help evaluate the effectiveness of the U.S. Minerals Management Service (MMS).

It was to be a six-month stint. Four years later he’s finally moving on. Beaudreau has spent those four years as director of the Bureau of Energy Management (BOEM), which, along
with the Bureau of Safety and Environmental Enforcement (BSEE), have replaced the MMS as the primary regulators for energy development in the U.S.

He will soon be transitioning into his new role as assistant secretary for policy, management and budget in the Department of the Interior. This transition caused Beaudreau to look back on the post-Macondo years during a talk titled “The Latest Offshore Policy Developments in the Department of the Interior.”
Having joined the department at a time when oil was still gushing into the Gulf of Mexico (GoM) from the blowout, Beaudreau said he was “heavily invested personally” in helping to implement changes and improvements in the regulatory environment. “It’s a reflection of my appreciation of the importance of this industry and our reforms and personnel in BOEM and BSEE,” he said, adding that the talk was “a natural time to reflect on how far we’ve come as well as opportunities and challenges.”

After Macondo, there were tough questions being asked about the offshore industry, he said. “Is deepwater drilling safe? Why did it take so long to respond to the disaster? Is the MMS independent enough from the industry? Four years later, BOEM and BSEE are viewed as smart and competent regulatory bodies that have the publics trust,” he said.

This industry is key to realizing the economic potential and energy security opportunities for growth and expansion in new frontiers,” he said. “High standards and high expectations are needed.”

The industry has risen to the challenge as well, he said. “It’s amazing the know how and skill the industry puts into drilling wells the right way,” he said. “I am extremely happy with the way the industry has stepped up in response to Macondo.”
When asked if Macondo is now in the past, Beaudreau responded, “We carry the lessons with us every day. There is a need for constant vigilance to avoid complacency.”

Looking ahead, Beaudreau outlined several areas of continued development. The first question many operators ask regards access to federal lands. The agency is kicking off planning for the 2017 to 2022 five-year leasing plan, and the GoM will continue to be at the forefront of that attention.

“The Gulf of Mexico will always be the centerpiece of the U.S. offshore energy portfolio,” he said. “It’s one of the most mature basins in the world in terms of infrastructure and one of the most robust in terms of industry performance. “Its here to stay and will be here for a long time.”

He added that the BOEM recently completed a programmatic environmental impact statement studying the effects of geological and geophysical activities in the mid and South Atlantic. This has led to a set of mitigation plans that are fundamental to any lease sales that might eventually be held.

Another trend is arctic exploration and development. Being from Alaska, Beaudreau said, causes him to think of the U.S. as an arctic nation (despite the warm and humid weather surrounding the Reliant Center during the talk). The U.S. will take over the chairmanship of the Arctic Committee next year, helping to set the agenda, including energy development “in a challenging environment that has enormous resource potential.”

“It’s important for the U.S. to show leadership in this area,” Beaudreau said.

A third trend is safety regulations, particularly when it comes to BOPs in deepwater. The agencies have been criticized for taking their time establishing new rules for BOPs, but Beaudreau countered this criticism by saying, “It takes time to get this right. We need strong standards for BOP performance and well control. We need a smart rule that works with the industry.”

Regulatory development continues. Beaudreau noted that many of the rules governing the GoM date back to shallow-water exploration and development on the shelf. “Regulations never really keep pace,” he said, adding that emerging HP/HT and subsalt plays will require more modern regulations. 

Finally, decommissioning is an issue that continues to require collaboration between industry and regulators. “Again, we need to be smart and cognizant of the cost to the industry,” he said. “It’s our obligation to ensure proper regulations for plugging and abandoning along with decommissioning of aging facilities.”

During the summer, BOEM will be sending out an advance notice of public rulemaking inviting stakeholders, including the industry, to provide feedback on decommissioning regulations, he added.

As he closed, Beaudreau expressed his appreciation to the audience. “I thank all of you for working with me,” he said. “We went through some very difficult times. One of the things I’m most proud of is looking at this industry, how it responded and how it’s stronger today than ever.”

May 08, 2014