2. OFFSHORE DRILLING:

Interior preparing a second round of BP spill violations

Published:

The Interior Department is planning to issue a second round of violations to the firms responsible for last year's Deepwater Horizon spill in the Gulf of Mexico, a sign the agency will continue policing both offshore operators and the contractors that service them.

Michael Bromwich, in his final week as director of the Bureau of Safety and Environmental Enforcement, today said his team was taking a closer look at data on the drilling of the failed Macondo well, which released nearly 5 million barrels of oil into the Gulf.

The violations, known as "incidents of non-compliance," would come roughly two months after Interior issued notices to BP PLC, Halliburton Co. and Transocean Ltd. for violations highlighted in a joint Interior-U.S. Coast Guard report on the causes of the disaster.

"My understanding is that the new regulatory violations will be the result of that deeper dive into some of the underlying materials that were not specifically addressed or discussed in the joint agency report," Bromwich said.

The October citations issued to Halliburton and Transocean were the first Interior has ever issued to a drilling contractor. The policy has chafed some in the industry but is necessary, and legal, to ensure safe offshore development, Bromwich said.

Bromwich said his agency is also seeking ways to shorten the time it takes to issue violations, assess fines and receive payments.

"In the past it has been a year or more," he said. "That's entirely unacceptable to me."

Bromwich, who will remain at Interior through the end of the year as an adviser to Secretary Ken Salazar, said the violations timeline would be shortened, but that companies would retain their due-process rights.

Bromwich has repeatedly urged Congress to grant Interior the authority to raise civil penalties higher than the current formula, which is roughly tied to inflation but falls well short of deterring risky drilling behavior, he said.

Chevron to brief agency on Brazil spill

Bromwich said Chevron Corp. at his request has agreed to brief his agency within the next 10 days on an underwater leak that spilled some 2,800 barrels of crude off the coast of Brazil.

He said his knowledge of the leak was limited, but that the accident proves regulatory oversight across the globe must continue to improve.

"Clearly, it's another example that spills happen and vigilance needs to be continued," he said. "We can't let down our guards."

The Brazilian government last week fined Chevron $28 million and threatened to demand a greater sum for the spill, for which the company has assumed full responsibility (Greenwire, Nov. 22).

The Brazilian government has since stripped the company of its drilling rights, and its chief executive was asked to report to Congress, Reuters reported.