Trump Plans to Relax Obama Rules for Oil Companies Put in Place After BP Disaster

By Stephanie Kirchgaessner, Guardian UK

16 January 19

Proposed revised rules include a change that would allow oil companies to select third party companies to evaluate the safety of their equipment

he Trump administration is expected to give BP and other big oil companies more power to self-regulate their offshore drilling operations, years after investigators found that lax regulatory oversight was one of the leading culprits behind the BP Deepwater Horizon disaster, the worst environmental catastrophe in US history.

The move to relax new rules that were put in place by the Obama administration after the BP disaster, which killed 11 workers, spewed 4m barrels of oil into the Gulf of Mexico, and cost BP $65bn, comes as the White House is seeking to open offshore oil and gas drilling to the vast majority of US coastal waters, including in the Arctic.

The proposed revised rules, which most experts believe will be finalised despite heavy opposition from environmental groups, include a change that would allow oil companies to select third-party companies to evaluate the safety of their equipment. Under previous rules, those entities had to be approved by the government agency that oversees offshore drilling, without any input from industry.

A separate rule on oil production safety systems that has already been finalized would also strike requirements that were put in place after the BP disaster that forced companies to get independent verification of the safety measures and equipment they use on offshore platforms, as well as a rule that required professional engineers to certify the safety of drilling equipment for new wells.

Michael Bromwich, an attorney who in 2010 was selected by the Obama administration to revamp the offshore oil regulator after the BP spill, told the Guardian he believed the administration had essentially offered the industry a “wishlist” of how it wanted the Obama-era rules to change.

“A lot of the changes that were made to reduce the requirements were designed to get synchronized with [oil industry lobbyist] API,” he said.

Offshore oil drilling was an “inherently hazardous activity”, Bromwich said, and he said most people would be shocked if they realised that some of the rules that had been put in place after years of study and multiple investigations into the BP spill would begin to be re-evaluated and weakened almost immediately after the start of the new administration.

In some cases, the previous rules had not yet even taken effect, because of the time regulators were given to allow companies to adapt.

The industry has sought to justify the changes by submitting cost estimates on the Obama-era rules that Bromwich said he was sure were “inflated”.

The oil industry’s main lobbyist, the API, has argued in public filings that some of the Obama-era rules created an “unnecessary burden”, made drilling less safe, and posed a “significant financial threat” to the industry. Members of API include BP America, Chevron, Exxon Mobil and Shell.

An extensive report by the Project on Government Oversight (Pogo), which investigated the proposed changes to the rules, found the proposals put forward by the interior department’s Bureau of Safety and Environmental Enforcement (BSEE) would roll back the rules that seek to ensure that blowout preventers – the critical equipment that failed in the BP disaster – will work in a potentially catastrophic situation.

“The administration is reconsidering layer after layer of safety requirements. Those include measures meant to prevent drilling problems, and measures meant to prevent problems from escalating into blowouts,” said David Hilzenrath, Pogo’s chief investigative reporter. He added: “The administration’s plan would also weaken requirements that, if all those other things failed, oil companies would be prepared to contain a spill.”

Blowout preventers are meant to block the flow of oil and gas in the event of an accident, even when the wells are under intense pressure from escaping gas and oil. Under the Obama-era rule, companies’ blowout preventers needed to be able to “achieve an effective seal” of wells but under the new rule, it will be sufficient to “close” the wells. While BSEE said the change would be “adequate” to achieve the same result, Pogo found that in a 2013 accident involving a well owned by Hercules Offshore, a well seal that appeared at first to be closed was later found to be releasing gas.

One set of changes affecting the oil industry, which involve production safety, have already been finalised by the Trump administration. Another set of proposed changes, those affecting the testing of blowout preventers and other systems related to offshore well safety during the dangerous exploratory phase of offshore drilling, are expected to be finalised soon.

Diane Hoskins, campaign director of Oceana, an environmental group, said that the oil industry has sought to justify some of its lobbying for changes in the safety rules because the BSEE had said in regulatory filings that it was “reasonable” to assume that the Obama-era rules created a 1% reduction in risk. But, Hoskins said, the BSEE’s experts have also said that they believed “the actual risk reduction [from the previous safety rules] will likely be substantially higher than 1%”.

“In other words, by comparing a woefully underestimated environmental benefit to the potential cost-savings for industry, the well control rules proposed changes cater to industry at the expense of ensuring the safety of the public and the environment,” said Hoskins. “At the same time, they are preparing to drill almost everywhere.”

There are also concerns that blowout preventers – the mechanism that companies rely on to stop catastrophic spills from occurring – are simply not tested sufficiently and not a fail-safe method of preventing spills, a fact that was proven by the BP disaster.

“The proposed changes reduce their testing, which is just absurd,” Hoskins said.

Other critics of the proposed changes include Christine Todd Whitman, the former Republican governor of New Jersey and EPA administrator. In an op-ed in the Houston Chronicle, published in September with Norm Mineta, the former congressman, Whitman said rolling back the safety measures “would constitute one of the gravest errors in ocean policy history”.

“The current proposal would remove real-time monitoring, eliminate third-party verification and essentially make reporting of equipment failures voluntary,” Whitman and Mineta wrote.

A spokeswoman for the Bureau of Safety and Environmental Enforcement was reached on her mobile phone but was not able to answer questions about when the proposed regulatory rollback would take effect because all members of the bureau’s press office were on furlough due to the shutdown of the US government.