Editor’s Note: This story has been corrected since its original publication. An earlier version of this story incorrectly identified U.S. Rep. Garret Graves as a Democrat. He is a Republican.
Oil and gas industry questions whether new federal regulations will make drilling safer or just more expensive
Six years after the Deepwater Horizon offshore drilling rig explosion killed 11 men and caused a leak that dumped more than 4 million gallons of oil into the Gulf of Mexico, the Obama administration has issued regulations meant to prevent the next deepwater disaster.
As Business Report details in a new feature from its current issue, industry leaders were still reviewing the new regulations as of mid-May to see if their concerns with the draft version had been addressed.
But when U.S Rep. Garret Graves, R-Baton Rouge, spoke to the Press Club of Baton Rouge on April 25, he had already made up his mind, saying the rules might “actually make offshore energy production less safe.”
Graves says the draft version of the rules would have resulted in up to a 35% reduction in offshore production, and a massive drop in offshore energy revenues for coastal restoration and hurricane protection in Louisiana—somewhere between $50 million and $80 million annually.
But the Gulf Economic Survival Team, a Louisiana-based industry group, says the original proposal could have cost the state some 32,000 jobs by 2025 and as much as $1.1 billion in tax revenue over the next 15 years.
In an April 14 announcement, Sally Jewell, U.S. Secretary of the Interior, said the well control rule was a vital part of the Obama administration’s extensive reform agenda.
The new rules, she says, incorporate “an intensive analysis of the causes of the tragedy, advances in industry standards, best practices, as well as an unprecedented level of stakeholder outreach.”
Louisiana Oil and Gas Association spokesman Ragan Dickens agrees the new rules will lead to unnecessary delays and costs, he doesn’t believe they’ll have any impact on the safety of offshore drilling.
“Without safety, we simply cannot be a successful industry,” Dickens says. “So I don’t think a new piece of paper in the form of a regulation will make our industry more or less safe.”
Read the full feature which includes a rundown of the new rules.
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