API's Gerard on Platts Energy Week: Working with regulators on new offshore drilling rules, but they're out
Washington - October 11, 2010
Also on the program: Biofuels plans for US Navy and energy technology in US defense
American Petroleum Institute (API) President Jack Gerard said Sunday on Platts Energy Week that his organization was working closely with regulators on new rules governing offshore oil drilling, just as the Department of the Interior was announcing the outline of those rules.
Broadcasted on the all-energy Sunday morning program, Gerard said the API was working to ensure that the new rules do not lead to "the bar (being) raised so high." If they are too restrictive, Gerard said, oil producing companies may move their operations elsewhere, in response to a question by host Bill Loveless about whether the US is such an attractive place to conduct drilling that it could withstand some tighter regulations.
In the interview, Gerard said that the new rules were to be released by the Bureau of Ocean Energy Management (BOEM) during the week of October 10. But they were published in the Federal Register October 8, the same date Gerard taped his interview with Platts Energy Week. Among the highlights of the new rules, regulators will require negative pressure tests on wells for the first time and imposing new requirements for cementing and well control procedures.
Officials have said that compliance with the new regulations would be necessary for companies to resume operations once the moratorium expires on November 30 or is lifted early.
"We're working closely with them to find that key balance, without discouraging energy development," Gerard said.
According to Gerard, five deepwater rigs have moved outside the Gulf of Mexico as a result of the moratorium imposed after the BP Macondo blowout and spill. However, other estimates have put the figure at less than that.
But "these investments are a very significant potential loss of thousands of jobs," Gerard said.
Gerard said the possibility of Congress acting on new oil spill legislation in a lame duck session after Election Day would depend on the outcome of the off-year vote. "The partisan divide is so large that it is going to be very difficult to get anything done in a lame duck session," Gerard said.
This week’s edition of Platts Energy Week also looked at the US Navy’s plans to meet half its fuel needs with biofuels by 2020. Bill spoke with Thomas Hicks, the Navy's assistant secretary for energy, and Tom Weaver, the lead pilot for a project testing camelina oil in Green Hornet jets. Click here to watch the full discussion.
Also on the show, former Lockheed Martin CEO Norm Augustine warned that the US, a global leader in defense, is falling behind other countries when it comes to energy technology. Click here to watch Augustine’s full interview.
This week’s Market Spotlight focused on the dollar driving oil prices and their recent fluctuations. Click here to watch the full clip.
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