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Departing regulator hopes offshore reforms stick

By JENNIFER A. DLOUHY, WASHINGTON BUREAU

Published 12:25 a.m., Saturday, December 3, 2011


WASHINGTON – When Michael Bromwich took over the helm of the agency overseeing offshore drilling 17 months ago, oil was still gushing into the Gulf of Mexico and a handful of ethical lapses had shattered public confidence in the ability of federal regulators to police the industry.

Now, Bromwich is leaving the Interior Department after leading a major overhaul of the government’s offshore drilling oversight programs and imposing a swath of new regulations designed to boost the safety of coastal oil and gas exploration.

But he is not confident that all of the changes imposed since last year’s Deepwater Horizon disaster will stick.

“People have short memories,” Bromwich said. “We have done everything we possibly can to institutionalize these reforms (and) to create new substantive rules. But there are a lot of people who have amnesia, who make believe that Deepwater Horizon never happened” or think it was “a total anomaly.”

Bromwich warns that major challenges remain for the offshore drilling industry and the regulators who monitor it, especially as federal agencies struggle to compete with oil companies to recruit top-notch petroleum engineers. Some industry leaders and their allies in Congress also are pushing to roll back new regulations imposed since last year’s oil spill.

Bromwich also is campaigning for extra dollars for the two federal bureaus that were created to replace the former Minerals Management Service.

“This agency for 28 years fought a losing battle for resources,” he said. “We have now started to make up for lost ground over the last year and a half,” but possible across-the-board budget cuts and planned congressional spending “make me quite concerned about whether the agency will have the resources and tools it needs to do the job that the public expects it to do.”

Bromwich formally stepped down as head of the Bureau of Safety and Environmental Enforcement on Dec. 1, but he will serve as a special adviser to Interior Secretary Ken Salazar through the end of the year. His plans beyond that aren’t known.

His successor is retired Coast Guard Rear Adm. James Watson, who led the government’s response to the Deepwater Horizon disaster after June last year.

Watson’s arrival could signal a new tone in the often chilly relations between industry representatives and drilling regulators since that spill.

Bromwich became a lightning rod for criticism from industry leaders and some lawmakers who said the government’s approval rate of offshore drilling projects slowed unnecessarily under his watch.

Hoping for faster pace

Jim Noe, director of the Shallow Water Energy Security Coalition that has pushed for swifter government approvals of coastal exploration, is hopeful that the pace will pick up.

“Adm. Watson comes into this job with a strong understanding of the industry and a reputation for reliability and efficiency – precisely the qualities needed to improve the offshore permitting process,” Noe said.

Rep. Jeff Landry, R-La., one of Bromwich’s toughest Capitol Hill critics, said he was “very optimistic.” Although Watson doesn’t enter the Interior Department with a deep background in the offshore oil and gas industry, Landry noted that his Coast Guard experience put him in touch with related issues.

Bromwich, by contrast, was brought in not for his oil and gas know-how, but rather to overhaul the agency and drive changes across the offshore drilling industry in the wake of last year’s spill.

His résumé is full of jobs cleaning up troubled organizations, including two years investigating the Houston Police Department crime lab roughly a decade ago about allegations of bad management, under-trained staff and inaccurate work.

Many industry officials instantly viewed Bromwich as an adversary in June 2010 after he was sworn in. And they were skeptical of his lack of experience with oil and gas drilling.

Bromwich acknowledged that what he knew about offshore drilling before taking on the job “could fit into a thimble.” But, he insists, “When you’re thrust into a crisis, you learn about the issues quickly.”

And, Bromwich said, his lack of knowledge was an asset – not a liability – because it gave him a fresh perspective to judge what worked and what didn’t.

For instance, Bromwich said, it drove his decision to upend the federal government’s traditional practice of only regulating oil and gas companies that hold leases to drill offshore – instead of also policing the thousands of service companies and other contractors that work for them.

“That has not made me a popular guy in the industry,” Bromwich conceded. But the former federal prosecutor said he never got “persuasive or convincing answers” justifying the old approach.

The operator-only enforcement plan was convenient in that government could go against oil and gas companies and then let them fight out conflicts with their contractors, Bromwich noted.

But, he added: “I didn’t think we should give across-the-board immunity to everyone that was a contractor.”

A blunder?

Landry called that one of Bromwich’s biggest blunders.

“We have, for decades now, had a nice linear chain of command that was easy to follow,” Landry said. “He believes in his effort and wisdom and all of his lack of understanding of the industry that that chain of command is somewhat dysfunctional.”

Landry also blames Bromwich for fostering an adversarial relationship between regulators vetting offshore drilling plans and the companies that submit them. He created an atmosphere where those regulators “began to distrust the industry and second-guess their own instinct,” he said.

Leaders of industry trade groups, including the American Petroleum Institute, tangled with Bromwich over the breadth – and speed – of new regulations imposed after the Gulf spill. They also vehemently opposed a five-month moratorium on deep-water drilling and have accused the government of dragging its feet in approving offshore exploration.

Some oil company executives have taken a different view. Chevron CEO John Watson has repeatedly insisted that regulators are not “trying to slow-walk permits” and instead are “trying to do their job well.”

Shell Oil Co. President Marvin Odum also has said that initial permitting delays resulted from both industry and regulators working to decipher new post-spill standards for well design, equipment testing and accident response.

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More Information

NEW RULES

Among the changes implemented under Bromwich’s watch:

Before deep-water drilling, companies now must prove they have equipment designed to cap runaway subsea wells – like the containment device that was developed on the fly as BP struggled to stop oil leaking out of its Macondo well in 2010.

Companies that work offshore are now required to adopt broad “Safety and Environmental Management Systems” designed to identify and minimize operational hazards.

The government imposed a swath of new well design standards and is requiring more testing of emergency equipment used to safeguard those sites.

Federal regulators are no longer routinely waiving offshore drilling plans from environmental assessments that are otherwise mandated by federal law.

DEEPWATER HORIZON

Michael Bromwich says many in the oil industry think the spill disaster was “a total anomaly.”

BUREAU RENAMED

The old Minerals Management Service, reformed into new agencies, was in the Interior Department.

RED TAPE

Some have accused the government of dragging its feet in approving new offshore exploration.

NEW WAY OF SAFETY

Overhauled regulations are designed to protect offshore workers and the environment.

SOURCE ARTICLE

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