Page 7 - NorthAmOil Week 37 2022

NorthAmOil POLICY NorthAmOil

Gulf lease sale results reinstated

GULF OF MEXICO THE results of a federal lease sale that took place review how it was handled.
in the US Gulf of Mexico in November 2021 have A court subsequently ordered the Biden
been reinstated, with leases awarded to the oper- administration to proceed with lease sales,
ators that were the highest valid bidders at the paving the way for Lease Sale 257 to proceed.
time. However, the results were invalidated in Janu-
The reinstatement follows the recent pas- ary by US District Judge Rudolph Contreras of
sage of the US’ Inflation Reduction Act, which the District of Columbia on the grounds that an
included a provision to award the leases won outdated analysis of the sale’s impact on climate
during Lease Sale 257. The Bureau of Ocean change had been used that was not compliant
Energy Management (BOEM), part of the US with the National Environmental Policy Act
Department of the Interior (DoI), confirmed on (NEPA).
September 14 that it had accepted 307 highest When the lease sale’s results were reinstated
valid bids from the lease sale, valued at a com- this week, lawyers for the DoI argued that
bined $189.9mn. because it was impossible for the department
The development is the latest in a series of to comply with both the deadline set under the
ups and downs for Lease Sale 257, and fed- Inflation Reduction Act and NEPA, the latter no
eral leasing plans more broadly. US President longer applied to Lease Sale 257.
Joe Biden had campaigned on a platform that “The Inflation Reduction Act withdraws Inte-
included ending federal oil and gas leasing in rior’s discretion to do anything other than issue
a bid to prioritise the energy transition, and these leases on the terms specified by Congress,
his administration initially suspended federal irrespective of NEPA,” the BOEM told a federal
leasing when he took office in 2021 in order to appeals court.™

Biden administration proposes tightening

of offshore drilling safety rules

GULF OF MEXICO THE administration of US President Joe Biden Many of the proposed
has proposed stricter offshore drilling safety changes are focused on
measures that are aimed at preventing oil spills blowout preventers.
and protecting workers and the environment.
If implemented, the proposals would rep-
resent a return to tighter regulations similar to
those that were imposed by former US President
Barack Obama in the wake of the Deepwater
Horizon disaster in the Gulf of Mexico in 2010.
Those regulations were subsequently loosened
by Obama’s successor, former US President Don- need to send test results to BSEE within 72 hours
ald Trump. of completion if the regulator was unable to wit-
Most of the changes proposed this week ness testing, among other proposals.
by the US Department of the Interior (DoI) Publication of the proposed changes to
are focused on blowout preventers (BOPs). the 2019 Well Control Rule kicks off a 60-day
The department is proposing that BOPs are public comment period that will run until
required to be able to close and seal the well- mid-November.
bore to the well’s kick tolerance design at all “This proposed rulemaking will help ensure
times and that surface BOPs on existing float- that offshore energy development utilises the lat-
ing facilities must follow the dual shear ram est science and technology to keep people safe,”
requirements when replacing an entire BOP stated US Secretary of the Interior Deb Haaland.
stack. This is aimed at boosting the odds of The DoI has estimated that the require-
slashing through drill pipe and other debris to ments would cost around $2.4mn over a 10-year
contain oil and gas in an emergency. period. While this represents a relatively small
The DoI is also proposing that data on equip- proportion of the overall costs of offshore drill-
ment failures be submitted to the Bureau of ing, especially when shared among numerous
Safety and Environmental Enforcement (BSEE) operators, additional costs are likely to see indus-
instead of third parties. Operators would also try pushback.™

Week 37 15•September•2022 www. NEWSBASE .com P7