Gcreag regulatory update march 2014
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GCREAG Regulatory Update March 2014. Jodie Connor J. Connor Consulting, Inc. Key Topics. Status of Agency changes Lease Sales Proposed Rules Offshore Safety Institute Update Incident Data Update Civil Penalties Paid. Reorganization. Sec. of the Interior Sally Jewel.

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GCREAG Regulatory Update March 2014

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GCREAG Regulatory Update March 2014

Jodie Connor

J. Connor Consulting, Inc.

Key Topics

  • Status of Agency changes

  • Lease Sales

  • Proposed Rules

  • Offshore Safety Institute Update

  • Incident Data Update

  • Civil Penalties Paid


Sec. of the Interior

Sally Jewel

Asst. Secretary

Land & Minerals Management

Tommy Beaudreau (Janice Schneider - nominated)

Asst. Secretary Policy, Management & Budget

Rhea S. Suh (Tommy Beaudreau – nominated)

  • ONRR

  • Gregory Gould

  • Revenue Collections

  • BSEE

  • Brian Salerno

  • Permits

  • Inspections

  • Spill Response

  • BOEM

  • Tommy Beaudreau (Open)

  • Leasing

  • NEPA Analysis

  • Resource Evaluation

  • IRU

  • Investigate Allegations of Misconduct


BOEM Final Notice of Sale

  • Central Planning Area Sale 231

  • Eastern Planning Area Sale 225

  • 9:00 a.m., Wednesday, March 19, 2014

  • Mercedes-Benz Superdome – New Orleans

Oil Spill Limit of Liability

BOEM Proposed Regulation – 2/24/14

Comment Period ends – 3/26/14

  • Add a new subpart to 30 CFR 553 regarding Limits of Liability for Offshore Facilities

    • Designed to increase the limit of liability for damages applicable to offshore facilities under OPA 90, from $75 million to $133.65 million, to reflect significant increases in the Consumer Price Index since 1990

      • This increase reflects a 78.2 percent increase in the Consumer Price Index from 1990 through 2013.

    • Establish a methodology BOEM would use to periodically adjust limits of liability for inflation

Oil Spill Limit of Liability

  • Future CPI adjustments to the offshore facility limit of liability in § 553.702 will be published in the Federal Register

  • Not later than every three years from the year the limit of liability was last adjusted for inflation, BOEM will evaluate whether the cumulative percent change in the Annual CPI-U since that year has reached a significance threshold of three percent or greater.

Oil Spill Financial Responsibility

  • OSFR is not increased by the proposed rule

  • BOEM may propose various changes to the Oil Spill Financial Responsibility regulations in a separate rulemaking

  • Stats provided in Federal Register

    * Most companies self insure or use guarantor

BSEE Proposed Rulemaking

  • Published proposed rulemaking

  • Oil and Gas Production Safety Systems – Subpart H

    • Published August 22, 2013, comment period was extended and closed December 5, 2013

    • Includes: Safety and pollution prevention equipment lifecycle analysis, production safety systems, subsurface safety devices, and safety device testing

  • In preparation, due out mid-2014

  • Blowout Prevention Systems

  • Arctic (joint with BOEM)

BSEE Proposed Rulemaking

  • Upcoming rulemaking

    • Suspensions of Production and Operations

    • Natural Gas Fluids Measurement

    • Oil Spill Mechanical Recovery

BSEE/USCG Quarterly Meeting

  • 2/19/14 First 2014 Quarterly Meeting at Headquarters

    • GOM operations updates from both BSEE and USCG

    • Developing and capturing offshore facility data and creating a system to share that information

    • BSEE and USCG inspection requirements for offshore rigs and fixed facilities

    • Creation of joint training opportunities for personnel



BSEE Oversight10 Yr Comparison of Civil Penalties

Prepared by JCC using data from BSEE.gov

BSEE Unannounced Exercise

  • 2/19/14 – BSEE Unannounced SMT TTX

    • Freeport McMoRan Oil & Gas

    • Actual deployment of skimmers at three separate locations

    • Simulated dispersant use

    • Simulated well containment and on-water spill response.

    • Participants included USCG, EPA, USFWL, NOAA, State of Louisiana, State of Texas

Offshore Energy Safety Institute

  • Accepting applications for Director

  • Planning for a series of forums, to be hosted by the Institute in 2014, covering topics:

    • Risk, research, failure data reporting

    • Best available and safest technologies

    • Human factors of risk

Forms Update - APD / APM

  • Application for Permit to Drill and Application for Permit to Modify updates will include a certification statement to state that false submissions are subject to criminal penalties

  • Minor APD modifications

  • Comments on each are due by Feb. 3, 2014

Deepwater Initial EP Approval Times

OCS Performance Measures Program 2004-2012

Analysis of Data – from BSEE’s website

Data analyzed for period since mandatory reporting for OCS operators was required (2010 thru 2012).

Most of the results were a mixed bag.

Just a handful of measures showed significant trending (those dealing with drilling).

OCS Performance Measures Program 2004-2012

  • “Drilling, Workover, & Allied Services” hours showed significant growth (up 76%).

    • Drilling Recordables are down 34%.

    • Drilling DARTs are down (37%).

    • Combined (Production, Drilling, Construction) Recordables and DARTs were down too, but that is a result of the Drilling numbers driving the overall numbers.

OCS Performance Measures Program 2004-2012

  • Likewise, in the same period, BSEE’s oversight of Drilling is up:

    • Total OCS INCs are up 174%

    • Total OCS Rigs inspected are up 76%

OCS Performance Measures Program 2004-2012


  • BSEE targeting high risk drilling operations

  • BSEE’s INCs are outpacing industry’s growth in hours; they are tightening up on what constitutes an INC

OCS Performance Measures Program 2004-2012


  • If you conduct drilling or workovers, expect BSEE to show up more frequently.

  • If you conduct drilling or workovers, expect BSEE to “INC” you more often.

  • Contractors can expect to be INC’dtoo.

  • BSEE needs to show the public they are having  a positive impact on safety on the OCS.

Down the Road

  • March 10-12 Decommissioning & Abandonment - Houston

  • March 19 – Central GOM Lease Sale 231 – N.O.

  • March 19 – Eastern GOM Lease Sale 225 – N.O. (following CGOM sale)

  • April 9-10 – Center for Offshore Safety 2nd Annual Forum

  • May 5-8 International Oil Spill Conference – Savannah, GA

  • June 4 - SEMS II Implementation Date

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