U.S. Interior Secretary Ken Salazar

Blowout Scenarios Now Mandatory for Offshore Drilling

The Minerals Management Service issued the directive June 18, making it effective immediately. Lessees and operators in offshore federal waters must estimate worst-case flow rates for a blowout when they file for a new permit, development plan, or exploration plan.

Companies leasing or operating oil and gas wells in offshore U.S. waters must file blowout scenario information when they file for a new permit, development plan, or exploration plan under a June 18 Minerals Management Service (MMS) directive. MMS, part of the Interior Department, has overseen drilling operations for years but will soon have its duties split to eliminate conflicts of interest between revenue-generating and oversight work. On June 15, Interior Secretary Ken Salazar placed former Justice Department Inspector General Michael R. Bromwich at the head of MMS to lead its reform, saying Bromwich "has vast experience improving the way organizations work, both within the government and in the private sector" and "is an ideal choice to change how the agency does business, to lead the reforms that will raise the bar for offshore oil and gas operations, and to help our nation transition to a clean energy future."

The directive, NTL No. 2010-N06, has an expiration date of June 1, 2015, and does not apply to previously submitted applications for permission to drill that were approved by MMS before June 18, except for deepwater activities – for those, lessees and operators must file the information.

The directive reverses a 2003 policy that exempted many offshore oil and gas operations in the Gulf of Mexico. "The BP oil spill has laid bare fundamental shortcomings in the oil and gas industry's ability to prevent and stop catastrophic blowouts," said Salazar. "While the challenges of intervening in a catastrophic blowout are significantly greater in deepwater than in shallow water, all operators should provide basic information about potential blowouts and steps that are being taken to reduce the possibility of a blowout. This is basic information that applicants should be able to provide; it should not delay permitting of appropriate shallow water drilling."

The directive says the companies must "specify as accurately as possible the time it would take to contract for a rig, move it onsite, and drill a relief well, including the possibility of drilling a relief well from a neighboring platform or an onshore location." They must describe the assumptions and calculations used to determine volumes in their worst-case discharge scenarios and also provide all assumptions they made concerning well design, reservoir characteristics, fluid characteristics, and pressure volume temperature characteristics. In addition, the directive says they must describe actions they would take to prevent a blowout, reduce the likelihood of a blowout, and conduct effective and early intervention in the event of a blowout, including arrangements for drilling relief wells.

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