Feds weighing stronger cleanup rules for offshore oil, gas sites

oil rig sunset coral
Oil production platforms in the Gulf of Mexico in June 2003. (Photo by Dinah Rogers, | The Times-Picayune) (Dinah Rogers)

Jennifer Larino, | The Times-Picayune By Jennifer Larino, | The Times-Picayune
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on August 15, 2014 at 12:06 PM, updated August 15, 2014 at 1:28 PM


The Bureau of Ocean Energy Management is asking industry and others to weigh in as it considers updating rules for how oil and gas companies must remove aging pipelines and platforms from the Gulf of Mexico.

In a Friday (Aug. 15) statement, the agency asked for input on its existing rules, which have gone largely unchanged over the past two decades.

BOEM Interim Director Walter Cruickshank said the agency looks to update its rules to better reflect the “realities of aging offshore infrastructure” as well as the rising cost of plugging dormant wells and removing old offshore structures.

Regulators are taking a closer look at existing bonding requirements for companies working offshore, which critics say are far too low in a new age of costly and high-risk deepwater Gulf drilling.

Federal rules require offshore companies to obtain bonds or alternative financing to cover the cost of meeting regulations, including removing old, potentially dangerous, structures.

Oil and gas companies are likely to see the cost of doing business in the Gulf of Mexico climb if the bond requirements are raised.

But it could also mean more work for dozens of south Louisiana businesses that specialize in cleaning up old offshore sites, what’s known in the industry as decommissioning work. Companies that could benefit range from heavy-lift crane operators to pipe cutters to diving firms.

BOEM will seek comment on various risk management strategies and on bond requirements over the next two months. The agency will formally file the advanced notice of the proposed rule making on Aug. 19.

Stakeholders can access the document and submit comment online on the Federal Register website by clicking here.

After the comment period closes, BOEM plans to hold a workshop on proposed rules to allow for additional discussion.


Special thanks to Clint Guidry

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