Trump’s offshore order at 1: Most changes still to come

By Pamela King | 04/30/2018 07:19 AM EDT

President Trump holds a signed executive order directing the Interior Department to review offshore drilling policies in this April 2017 photo.

President Trump holds a signed executive order directing the Interior Department to review offshore drilling policies in this April 2017 photo. Pablo Martinez/Associated Press

In the year since President Trump launched his "America-First" offshore energy strategy, federal officials have been slow to implement many of the White House’s recommendations for deregulating oil and gas production in the nation’s oceans.

Interior Secretary Ryan Zinke earlier this year took a major step toward that goal with his controversial announcement that the Bureau of Ocean Energy Management would open more than 90 percent of the U.S. outer continental shelf to oil and gas leasing. BOEM’s sister agency, the Bureau of Safety and Environmental Enforcement, is expected to unveil changes to an Obama-era offshore safety rule this week.

But BOEM, BSEE and other agencies mentioned in the Trump administration’s offshore executive order, which celebrated its anniversary Saturday, have yet to publicly announce developments on nearly all other provisions of the directive.


"The process of deregulating or modifying regulations is slow and torturous," said Kevin Book, managing director of research for ClearView Energy Partners LLC.

That’s particularly true offshore where work sites are remote, equipment is expensive and operations are complicated, he said. In comparison, the Trump administration has acted swiftly on its deregulatory targets for onshore production (Energywire, March 28).

Interior’s onshore scorecard includes the rescission of two regulations governing oil and gas valuation and hydraulic fracturing, as well as a proposal to significantly rewrite guidance for methane emissions from energy operations on federal and tribal lands.

"There’s only so much that Interior can do at one time," said Randall Luthi, president of the National Ocean Industries Association, which has supported the administration’s offshore deregulatory agenda.

As they have with Trump’s onshore energy actions, environmental groups have pledged to wage a legal battle against any efforts to increase access for offshore drillers.

"We will fight him at every turn, and we won’t hesitate to take the Trump administration to court should it shortcut bedrock environmental laws," said Earthjustice attorney Erik Grafe.

Here’s where the Trump administration’s "America-First" offshore energy strategy currently stands.

5-year plan

The banner achievement thus far from last year’s order has been Interior’s decision to hold oil and gas lease sales in most of the U.S. outer continental shelf between 2019 and 2024.

If approved, the revisions would reverse the Obama administration’s move to close nearly all federal waters to exploration and development.

"Our agency has worked diligently to achieve the president’s and Secretary Zinke’s ‘all-of-the-above’ strategy for energy dominance, and we continue to make significant progress," said BOEM acting Director Walter Cruickshank. "Safe, reliable and affordable energy is critical to U.S. economic growth and prosperity, as well as to national security. This is what drives us to continuously strive to do our best for the American taxpayer."

The draft proposed plan released by Trump’s Interior in January has been opposed by nearly every coastal state outside the Gulf of Mexico, where offshore drilling is already taking place. An interim draft is due this fall, and a final plan is expected next year.

Zinke has indicated that subsequent drafts of the 2019-2024 plan could shrink the acreage available to oil and gas operators.

Well control rule

BSEE is expected to announce revisions this week to a key rule drafted in the aftermath of the 2010 Deepwater Horizon explosion and oil spill in the Gulf of Mexico.

The proposed changes to the 2016 blowout preventer systems and well control rule will appear in an upcoming edition of the Federal Register, BSEE revealed last week (E&E News PM, April 27).

"BSEE is cautiously optimistic as we sense enthusiasm expressed by industry officials about increased activity in the Gulf of Mexico that stems from treating them as partners while holding them accountable for oil and gas operations," said bureau spokeswoman Karla Marshall.

BSEE so far has provided few specifics on the exact changes it will propose.

Environmental advocates have promised to keep a close eye on the revisions and plan to stay active in the rulemaking process. This week’s Federal Register notice will mark the start of a 60-day comment period on the rule rewrite.

"History has already taught us the lesson that when the oil industry drills, it spills," said Steve Mashuda, managing attorney for oceans at Earthjustice. "The administration’s attempt to erode commonsense safety and environmental protections designed to prevent another tragedy on the scale of Deepwater Horizon is deeply troubling."

Production safety systems rule

Federal officials have also changed several rules, policies and procedures that aren’t specifically mentioned in the offshore order.

Among those regulations is BSEE’s production safety systems rule. Interior last year floated a batch of changes to the 2016 regulation. Experts largely regarded the revisions as immaterial and warned that changes to the well control rule would be far more consequential (Energywire, Jan. 30).

As a result of the executive order, BSEE has also begun a risk-based inspection program, increased physical inspection times and launched a new quality assurance process for permit reviews, according to information provided by the bureau.

Financial assurance framework

In his order, Trump directed BOEM to revisit its financial assurance framework, which could have major implications for offshore operators.

Adjustments to the framework could affect the cost of decommissioning rigs in the outer continental shelf, said Book of ClearView Energy Partners.

"It’s no small thing," he said.

While BOEM has concluded that a new framework is necessary, it has yet to propose a new rulemaking.

Arctic rule

The offshore order could also prompt changes to BSEE’s 2016 Arctic drilling rule, which introduced more stringent environmental standards for oil production in the world’s northernmost waters.

BSEE said it is currently working to determine whether revisions are warranted.

The Trump administration has demonstrated an appetite for opening Alaska’s lands and waters to oil and gas development. The offshore order also revoked an Obama-era withdrawal of Arctic waters, and the draft proposed five-year leasing strategy would open all but one section of Alaska’s oceans to energy operations.

See below for an annotated version of the executive order, or click here for a PDF version.