September 20 & 21

1. Expert Forum on the Use of Performance-Based Regulatory Models in the U.S. Oil and Gas Industry, Offshore and Onshore September 20 & 21

2. Executive Order 13563: Improving Regulation and Regulatory Review • Outlines core principles and procedures to direct Agency regulatory activity • Emphasis on public participation and careful analysis of the likely consequences of regulations • 6 key provisions – each embodied in the spirit of this initiative

3. A. Core Principles • Predictability and Certainty • The best available science • Public participation • Use of the least burdensome tools • Considering costs and benefits, both quantitative and qualitative • Measuring and seeking to improve actual results

4. Public Participation • Directs agencies to promote an open exchange with State, local and tribal officials, experts in relevant disciplines; affected stakeholders and the public in general • Requires the use of the internet to promote open exchange • Before issuing proposed rules agencies shall seek views of those who are likely to be affected

5. Integration and Innovation • Directs agencies to harmonize, simplify and coordinate rules • Emphasizes that some sectors and industries face redundant, inconsistent or overlapping requirements • Greater coordination reduces costs and conflict -- promotes predictability, certainty and innovation • Identify as appropriate, means to achieve regulatory goals that are designed to promote innovation

6. Flexible Approaches • Directs agencies to identify and consider regulatory approaches that reduce burden and maintain flexibility and freedom of choice for the public • Alternatives to mandates, prohibitions and command and control regulation • Encourage innovation, growth and competition • Potential applications in the oil and gas sector?

7. Scientific Integrity • Directs agencies to ensure the objectivity of information on which it relies to support regulatory actions • Heightened importance with increased uncertainty

8. Retrospective Analysis • Calls for periodic review of existing rules to identify “rules that may be outmoded, ineffective, insufficient or excessively burdensome.” • Make Agency regulatory programs more effective or less burdensome in achieving the regulatory objectives • Recognizes the importance of maintaining a consistent culture of retrospective review and analysis throughout the Executive branch

9. Exploring opportunities to promote these principles in the oil and gas sector • An inherently complex sector and operational environment • Multiple agencies and jurisdictions • Beyond regulation to address the last disaster

10. Oil and Gas Industry Gas Processing Onshore Offshore Refining/ Production Storage Transportation Consumer

11. Regulatory Models Prescriptive or Command & Control Performance or Outcome-based Management- based

12. Topics for Consideration • Advantages and disadvantages of performance-based, prescriptive, and management-based regulatory approaches • Whether these methods could create synergies between multiple agencies • What types of models or combinations could result in long-term economic benefits

13. Question 1 Benefits and drawbacks of performance-based regulations • Consider: • Health, safety, environmental, and economic impacts, • implementation challenges, • cost to agencies, and • long-term hazard reduction effectiveness. • Specific models and data

14. Question 2 Balance for prescriptive and performance-based regulations, depending on: • types of operations • business sizes • other

15. Question 3 Ways to advance performance-based regulations and standards in oil and gas industry, considering: • means • cost to regulatory agencies • cost for industry • expected changes

16. Question 4 Opportunities from uniform implementation by multiple agencies • improvements in efficiency • duplication reduction

17. Question 5 Challenges to successful implementation of performance-based regulations in the oil and gas industry

18. Question 6 • Risk assessment while ensuring adequate levels of safety • Should acceptable risk levels be established

19. Question 7 Effective oversight of performance-based regulatory models • use of metrics • audit programs • other

20. Question 8 Limits to the use of performance-based regulatory models • increased or decreased challenges for small businesses • necessity of prescriptive components

21. Meeting Synopsis • Good attendance from all stakeholders • Public involvement appreciated • Multi-agency effort applauded • Comments submitted to the public docket • Agencies will review testimony and comments to decide next steps

22. Expert Forum on the Use of Performance-Based Regulatory Models in the U.S. Oil and Gas Industry, Offshore and Onshore September 20 & 21