A special Risk Management Forum at the 2011 Deep Offshore Technology International® (DOT) Conference & Exhibition in New Orleans began with a look at the uncertainty surrounding the federal regulations, rules and best practices, as well as the political issues and challenges facing industry on Wednesday.

Forum moderator Allen Verrett, executive director, Offshore Operators Committee, opened the Forum by listing some of the areas of uncertainty as follows:

• Emergency drilling rules, which are expected to become final rules in the near future

• Containment planning

• Permits and plan approvals

• SEMS I and II

• Regulatory oversight functions

• Processing of development plans

• New NEPA

• The new version of the Minerals Management Service which now is three separate bureaus

• The volumes of new and proposed Congressional laws.

He also said the lessons learned over the last few months show that the industry is “one incident away from changes” in governmental reaction, that there is no domestic energy policy, that a current administration can and will impact the industry, and that there is no cheap energy.

James Noe, senior VP, general counsel, and chief compliance officer of Hercules Offshore, said that Hercules and its shallow water drilling rigs served as a “canary in the mine” for the deepwater operators as regards regulations and the market. He showed that while rig demand in the GoM is up, the volume of permits issued is not keeping pace. He also said that the reorganization of the MMS into parts may mean longer periods awaiting permits.

Poe Leggette, partner-in-charge, Fulbright & Jaworski, said that the bad regulatory environment has three elements in particular to watch. One is that drilling of a relief well is no longer the last line of defense against a blowout and granting of a permit requires definition of the cap and stack options arranged. He also cautioned that a well-by-well “reengineering” of the well design by regulatory agency employees not only extends the permitting time, but means those employees effectively determine the containment design of a well.

PennWell Corporation is a highly diversified, business-to-business media company providing authoritative print and online publications, conferences and exhibitions, research, databases, online exchanges and information products to strategic global markets.

Since 1910 PennWell has been known for providing comprehensive coverage of several strategic markets. In those early days, PennWell was a pioneer in the emerging oil industry with Oil & Gas Journal magazine, founded in 1902. Today PennWell publishes over 75 business-to-business print and on-line magazines and newsletters, conducts over 60 conferences and exhibitions on six continents, and has an extensive offering of books, maps, directories and database services.

Tags: Deep Offshore Technology International® (DOT)