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Shameless White House Takes Credit For Oil Production Increase

The White House Blog, in a post entitled “Expanding Safe and Responsible Energy Production”, lays out the case for the Obama Administration as a long-time supporter of domestic oil and gas:

One area where we have focused our efforts since the start of the administration – long before this current spike – is increasing responsible domestic energy production – including oil and gas. In fact, oil production last year rose to its highest level since 2003. From 2008 to 2010, oil production from the Outer Continental Shelf increased more than a third – from 446 million barrels in 2008 to an more than 600 million barrels of estimated production in 2010.

Have these people no shame? (Rhetorical question.)

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Salazar to comply with court's ordered timing on drlg permits, but may appeal the Judge's ruling. #rsrh

Clipped from rigzone.com
US Interior to Act on Permits by March Deadline

A U.S. official said Wednesday that the Interior Department will meet a court-imposed deadline to act on five deep-water drilling permit applications before the end of this month.

Interior Secretary Ken Salazar also said more permits approvals are coming.

“There are other [permits] that will be issued in the days ahead that will become a template for other deep-water permits to be issued,” Salazar said before the Senate Energy and Natural Resources Committee.

A federal judge on Feb. 17 ordered the department to act on five pending applications for offshore-drilling permits within 30 days, ruling in favor of London-based Ensco, which had sued the Interior Department.

As Congress considers the Interior Department’s funding levels, Salazar also said his department needs a larger budget to pick up the permitting pace. Without more funding, “we may never return to the pre-Macondo rate of permitting,” Salazar said, referring to the spill at BP’s Macondo well in the Gulf of Mexico last year.

The department also indicated it could be challenging the federal judge’s authority to order it to act on permits within a given time frame.

“The judge in this particular case, in my view, is wrong,” said Salazar. “We’ll argue the case because I don’t believe the court has a jurisdiction to basically tell the Department of Interior what my administrative responsibilities are.”

“We are examining our options in terms of an appeal,” Salazar later added.

Read more at rigzone.com
 

‘Conflicting Missions’ at BOEMRE? Hooey!

This press release is the biggest load of hooey I’ve seen for a while. The Department of the Interior wants to create two new agencies to remedy what they term “conflicting missions” within a single agency. Hooey.

WASHINGTON, D.C. - Secretary of the Interior Ken Salazar and Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich today announced the structures and responsibilities of two new, independent agencies that will carry out the offshore energy management and enforcement functions once assigned to the former Minerals Management Service (MMS). …

“The former MMS was saddled with the conflicting missions of promoting resource development, enforcing safety regulations, and maximizing revenues from offshore operations,” said Director Bromwich. “Those conflicts, combined with a chronic lack of resources, prevented the agency from fully meeting the challenges of overseeing industry operating in U.S. waters. The reorganization is designed to remove those conflicts by clarifying and separating missions across the three agencies and providing each of the new agencies with clear missions and new resources necessary to fulfill those missions.” [emphasis added]

Two new bureaucracies, eh? This plan is a prescription for disaster for the Gulf of Mexico. It should serve as a wake-up call for any thinking person who thinks America’s energy security is an important issue. Or, for that matter, for anyone who doesn’t relish the thought of $8.00/gallon gasoline.

“Conflicting missions?” Baloney. Like “walking” and “chewing gum” at the same time are conflicting missions.

Please indulge an allegory.

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On the Oil Spill Commission Report

As many of you know, your humble correspondent is a veteran of 32 years of service in the oil and gas industry, currently serving as the operations manager for a small Gulf of Mexico exploration and production company. This week, the President’s Oil Spill Commission published its 380-page report on the BP blowout and spill on the Deepwater Horizon. I won’t pretend to have read the thing, but there are a few recommendations and outcomes worth commenting upon.

Panel: More reform needed to prevent future spills

When asked about the likelihood Congress would enact some of its suggestions, especially with a Republican majority in Congress looking to curb government regulation and spending, panel co-chair and former Florida Democratic Senator Bob Graham said that the magnitude of the disaster “would override an ideological preference for less government, less government intrusion, less government cost.” …

The panel said Congress should draft legislation to create within the Interior Department an independent safety agency and a separate environmental office to evaluate the risks of oil drilling to natural resources. Such a change would not require any additional funding.

Two new bureaucracies, eh? Color me unsurprised.

Reading these government reports, one gets the impression that the oil and gas business would conduct itself like the Seventh Fleet on shore leave, were it not for the stalwart defenders of safety and the environment embodied in the Department of the Interior’s inspectors.

In the wake of the BP Spill, we’ve seen a raft of new regulatory initiatives from the BOEMRE, the Interior agency which has oversight responsibilities for offshore oil and gas operations. Many of the new regs have nothing to do with addressing the problems of BP or Transocean at Macondo. Some of the new requirements for drilling wells arguably don’t add a margin of safety and may even increase the risk of a well’s failure. Industry’s attempts to convince the regulators of this, however, have fallen upon deaf ears. There’s a new sheriff in town, and he aims to let everyone know who’s boss.

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Gulf of Mexico Rigs Lost, Jobs Lost

Rig Maintenance Supervisor Bill Masters of Trout, LA lost his job with Seahawk, a shallow water rig contractor, last June 23. After 38 years on the rigs, Masters hoped to go back to work fairly quickly; that’s the way it had always happened before.

But not this time.

Seahawk has laid off 300 workers. Only three of 20 rigs in its fleet are currently working. (One of them is expected to be working for my company within a few weeks.)

Bill Masters is one of thousands who may never work the rigs again.

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