Interior Proposes to Weaken Offshore Oil and Gas Safety Requirements – The Coalition To Protect America's National Parks

2018 CPANP Letterhead Logo

January 29, 2018

Bureau of Safety and Environmental Enforcement
Attention: Regulations Development Branch
45600 Woodland Road, VAE-ORP
Sterling VA 20166

Subject: Outer Continental Shelf Oil and Gas Production Safety Systems – Revisions, RIN 1014-AA37

Dear Bureau of Safety and Environmental Enforcement (BSEE):

I am writing to you on behalf of over 1,400 members of the Coalition to Protect America’s National Parks (Coalition), a non-profit organization composed entirely of retired, former, or current employees of the National Park Service (NPS). The Coalition studies, educates, speaks, and acts for the preservation of America’s National Park System (System). As a group, we collectively represent more than 35,000 years of experience managing and protecting America’s most precious and important natural and historic places.

INTRODUCTION

As a national park advocacy group, we are very concerned that BSEE’s proposed revisions to the existing rule on “Oil and Gas and Sulphur Operations on the Outer Continental Shelf – Oil and Gas Production Safety Systems” will increase the likelihood of major oil spills and may cause irreparable harm our nation’s ocean and coastal parks, as well as to other coastal areas and resources. There are 67 units (parks) within the National Park System along the coasts of the Atlantic, Gulf of Mexico, Pacific, and Alaska. Collectively, these parks preserve over 10,000 miles of shoreline and nearly 2 million acres of marine waters. In 2016, the 67 parks received over 85 million visitors whose $4.5 billion in spending supported 65,000 jobs in adjacent coastal communities. Sadly, history has proven there are significant risks to coastal parks and other coastal resources due to oil spills that have occurred along our coasts.

BACKGROUND

The Department of the Interior’s authority to regulate oil and gas activities on the outer continental shelf (OCS) is provided under the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C 1331 et seq., which was first enacted in 1953. The Act was substantially amended in 1978, when Congress established a National policy of making the OCS “available for expeditious and orderly development, subject to environmental safeguards (emphasis added), in a manner which is consistent with the maintenance of competition and other National needs.”

Despite longstanding federal oversight under OCLSA, disastrous oil spills have occurred off our nation’s coasts; and some have severely damaged park resources. Such incidents include Santa Barbara Channel (1969), Exxon Valdez (1989), and Deepwater Horizon (2010). Members of the Coalition, during their NPS careers, worked on clean-up of the Exxon Valdez spill in Alaska and the Deepwater Horizon spill along the Gulf Coast; and we can speak from first-hand experience about the devastating effects of such oil spills on coastal parks, resources, communities, and economies.

In March 1989, the Exxon Valdez ran aground in Prince William Sound, spilling nearly 11 million gallons of oil along the Alaskan coastline, including national park sites such as Kenai Fjords, Katmai, Aniakchak, and Lake Clark. Recreation and tourism declined dramatically and resource managers were forced to limit hunting and fishing access because of the damage. Despite extensive cleanup efforts, oil remains on national park beaches to this day.

The 2010 Deepwater Horizon spill leaked more than 210 million gallons of oil into the Gulf of Mexico, contaminating miles of beaches, wetlands and ocean waters, and causing an estimated $37 billion in damages. Gulf Islands National Seashore was affected, and the park is still recovering from the effects of the spill on plants, wildlife and archaeological resources. Thousands of birds, mammals, and sea turtles were plastered with leaked oil. According to a 2014 study, up to 800,000 birds were thought to have died. The brown pelican, recently delisted as an endangered species, was among the species most affected. A 2014 study projected that perhaps 12 percent of the brown pelicans and more than 30 percent of the laughing gulls in the area hit by the spill had been wiped out. In addition to the overwhelming resource impacts, the Deepwater Horizon spill caused many billions of dollars in economic losses and damages, affecting many of the industries upon which Gulf coast residents depended. At the peak of the spill, more than a third of federal waters in the gulf were closed to fishing due to fears of contamination. A moratorium on offshore drilling left an estimated 8,000 – 12,000 workers temporarily unemployed. And few travelers were willing to face the prospect of petroleum-sullied beaches, leaving those dependent on tourism struggling to supplement their incomes.

LESSONS LEARNED

The National Commission on the British Petroleum (BP) Deepwater Horizon Oil Spill and Offshore Drilling (Commission) was formed by the President Obama in May 2010 as an independent, nonpartisan entity directed to provide a thorough analysis and impartial judgment about the spill. The Commission’s final report[1], issued in January 2011, referred to the Deepwater Horizon spill as “the worst environmental disaster America has ever faced.” The Commission attributed the spill to a lack of regulatory oversight by the government and negligence and time-saving shortcuts on the part of BP and its partners. The report included numerous recommendations for improving the safety and reducing the impacts of offshore oil and gas operations.

Among its findings, the Commission reported the “absence of adequate safety culture in the offshore U.S. oil and gas industry” (pp. 224). In addition to the three major incidents mentioned above, the report listed 79 other “loss of well control” incidents occurring in the Gulf of Mexico between 1999 and 2009 (pp. 226-227). The point is that oil spills and other “accidents” occurring during offshore oil and gas operations is NOT a rare occurrence and more spills and accidents are likely to occur in the future. Therefore, diligent and effective federal oversight is essential.

The industry was not the only target of criticism in the report. The Commission also found that “federal efforts to regulate the offshore oil and gas industry have suffered for years from competing purposes, pressure from political and industry interests, a deepening deficit of technical expertise, and severely inadequate resources available to the government agencies tasked with the leasing function and regulation” and given “the near certainty that the oil and gas industry will seek to expand into ever more challenging environments in the years ahead, a more comprehensive overhaul of both leasing and the regulatory policies and institutions used to oversee offshore activities is required” (p. 250). As a result, one of the key recommendations of the Commission (p.256) was that:

“Congress and the Department of the Interior should create an independent agency within the Department of the Interior with enforcement authority to oversee all aspects of offshore drilling safety (operational and occupational)”

As a direct result of this recommendation, the Bureau of Safety and Environmental Enforcement (BSEE) was established by act of Congress on October 1, 2011. As described on its website[2], BSEE’s mission is:

“to promote safety, protect the environment, and conserve resources offshore through vigorous regulatory oversight and enforcement.”

In essence, the primary role of BSEE, your role, with regard to OCS oil and gas operations is that of risk management and environmental protection.

REGULATORY CHANGES AFTER DEEPWATER HORIZON

After the Deepwater Horizon explosion in 2010 that killed 11 people and caused the biggest oil spill in US history, after the completion of the Commission’s report in January 2011, and after the establishment of BSEE in October 2011, the Bureau (BSEE) initiated a comprehensive and deliberative five-year process to create a new set of standards and regulations to ensure that the lessons learned from the Deepwater Horizon disaster would be applied to improve the safety of offshore oil and gas operations and minimize the likelihood of future such catastrophes. The update of the regulations was long overdue. According to BSEE, “the regulations (30 CFR Part 250, Subpart H) had not undergone a major revision since 1988” and “the change [was] necessary to improve human safety, environmental protection, and regulatory oversight of critical equipment involving production safety systems.”

During the multi-phase rulemaking process, ALL interested stakeholders, ranging from the public to the industry to environmental groups, were able to participate. Based on the input from this diverse group of stakeholders, the final rule published in September 2016 included both performance-based standards and prescriptive rules designed to improve safety and protect the environment. Central to this process was the collective interest in addressing specific issues that had caused the Deepwater Horizon disaster, such as the malfunctioning of the blowout preventer and the capacity to monitor and withstand high-pressure drilling. New standards and requirements were specifically implemented to prevent similar incidents and the need was recognized for qualified, independent third-party certifications and audits to ensure compliance with new technical requirements. The final rule[3] became effective on November 7, 2016, over six years after the Deepwater Horizon disaster.

While we realize you are undoubtedly familiar with the above information, we include it as context for our comments below.

SPECIFIC COMMENTS

We have a number of concerns about the proposed rule and believe portions of it are fundamentally inconsistent with the lessons learned from the Deepwater Horizon incident, as well as inconsistent with BSEE’s primary mission.

1) Revising the Rule Now is Not Justified: The current rule was developed through an extensive public review process in the aftermath of the Deepwater Horizon disaster and based, in large part, on the National Commission’s comprehensive report and recommendations. The rule provided a long-needed update to a 1988 regulation and has since been in effect for only 15 months. Despite this recent update, BSEE’s explanation for revising the rule again now can, in essence, be summarized as follows: The existing rule is too burdensome for the oil and gas industry; and it contains some references to technical standards that have become dated. This “burden” to comply with safety requirements is not an adequate justification for the proposed revisions that would weaken those requirements; nor is it an acceptable message to the American public who expects BSEE to protect the people’s interest, not the industry’s interest. As plainly stated in the Commission’s report, “The oil and gas industry does not own the valuable energy resources located on the outer continental shelf, which belong to the American people and are managed by the federal government on their behalf” (p.239).

As already stated, the Commission found an “absence of adequate safety culture in the offshore U.S. oil and gas industry” (p. 224). As a result, there is a compelling need for effective federal regulatory oversight of an industry with a history of safety deficiencies. Such oversight is BSEE’s moral and legal obligation. The 2016 regulation made great strides toward ensuring the adequacy of that oversight. Given the reasons for the 2016 rule in the aftermath of the Deepwater Horizon disaster, BSEE has now failed to adequately explain or justify how the proposed changes to that rule would improve risk management and enhance environmental protection. In fact, the proposed revisions would fundamentally weaken the rule and significantly diminish BSEE’s ability “to promote safety, protect the environment, and conserve resources offshore through vigorous regulatory oversight and enforcement” as required by its mission.

2) Documents Incorporated by Reference (§ 250.198): In principle, we have no strong objection to the proposal to update, by reference, specific standards currently in Subpart H that have since been superseded by newer versions of those same standards. However, we believe BSEE’s approach to these updates is haphazard at best. BSEE should establish a more systematic approach that includes establishing a periodic schedule (such as a 3-year or a 5-year schedule) for future reviews and updates of standards. This would improve certainty of timely review and replacement, if appropriate, of outdated standards.

3) The rule should retain ALL current requirements for third-party certifications and audits: The National Commission recommended that a variety of third-party certifications and audits, typically performed by professional engineers (PEs),be required to ensure certain drawings, plans and procedures comply with applicable standards and requirements. The Commission’s basis for this recommendation was compelling. In addition to the previously mentioned finding that there is an “absence of adequate safety culture in the offshore U.S. oil and gas industry” (p. 224), the Commission also asserted that “industry self-policing is not a substitute for government… oversight” (p. 234). As a result, third-party certifications and audits were recommended for a variety of planning, design, safety system, and operational activities. As explained by BSEE in its response to comments in the preamble to the 2016 final rule (under “Third Party Certifications”), “the certifications…help ensure that operators meet the level of safety and environmental protection mandated under OCSLA.”

Despite the clear importance of the provisions included in the 2016 rule, BSEE is now proposing to eliminate a number of third-party certification requirements without adequate justification. Yet BSEE has failed to provide any persuasive evidence that the requirements are is no longer needed or effective. Given the industry’s long-standing profit motive and problematic safety record, documented so extensively in the Commission’s report, BSEE’s proposal to eliminate some third-party certification requirements is a recipe for future disasters. ALL current third-party certification requirements should be retained!!!

CLOSING COMMENT

Based on lessons learned from the Deepwater Horizon disaster, BSEE’s completion of the final rule in 2016 was a major step forward in improving safety and environmental protection requirements for OCS oil and gas operations. Unfortunately, the proposed rule is an inexplicable step backward from those well-founded standards established so recently. BSEE should put safety and environmental protection first, above industry convenience, as mandated by your agency’s mission. Other than the updates of technical standards incorporated by reference, the proposed rule is unconscionable and should be abandoned.

We appreciate the opportunity to comment on this important issue.

Sincerely,

Phil Francis Signature