What's In A Moratorium?

http://www.nytimes.com/2010/05/24/us/24moratorium.html?emc=eta1

We were surprised to find this morning that we did not understand the meaning of "moratorium" as it relates to regulatory agencies. We are joined by members of Congress who appear to be equally confused.

In the days since President Obama announced a moratorium on permits for drilling new offshore oil wells and a halt to a controversial type of environmental waiver that was given to the Deepwater Horizon rig, at least 7 new permits for various types of drilling and 5 environmental waivers have been granted.

Department of the Interior officials said in a statement that the "moratorium" was meant only to halt permits for the drilling of new wells. It was not meant to stop permits for new work on existing drilling projects like the Deepwater Horizon. SERIOUSLY!

So, our interpretation of this latest incompetence is: if you have a rig currently being run as incompetently as Deepwater was, you're fine to get new drilling permits or environmental waivers. What a concept! Here's a thought: if BP is applying don't grant it. While we might be off on the name and the size, we believe that the largest deepwater platform in the Gulf of Mexico is BP's "Thunder Horse". Do we think it's possible that the same process safety issues that occurred on Deepwater could be present there? It's the same management!

Since the explosion, federal regulators have been harshly criticized for giving BP's Deepwater and hundreds of other drilling projects waivers from full environmental review and for failing to provide rigorous oversight to these projects. In testifying before Congress on May 18th, Interior Secretary Salazar and officials from his agency said they recognize the problems with the waivers and they intended to rein them in. Salazar also said that he was limited by a statutory requirement that he said obligated his agency to process drilling requests within 30 days after they have been submitted. So what.

At least six of the drilling projects that have been given waivers in the past four weeks are for waters that are deeper - and therefore more difficult and dangerous - than where Deepwater was operating. While that rig, which was drilling at a depth just shy of 5,000 feet, was classified as a deep-water operation, many of the wells in the six projects are classified as "ultra deep" water, including four new wells at over 9,100 feet.

Under the well known government bureaucratic category of "one hand not knowing what the other is doing", the Occupational Health and Safety Administration (OSHA) has classified some of the types of drilling that have been allowed to continue as being hazardous as new well drilling.

Given all of this, we would suggest that BP's operations in the Gulf of Mexico be taken over by the US Government and that no new drilling of any kind be done at any BP site unless deemed necessary for process safety reasons. Now that the oil is reaching the shores of Louisiana, perhaps BP can finance an all out effort to build sand berms and whatever else the governor of that state thinks he needs. BP needs to concentrate on something simple enough to help people and leave the complexities of management and process safety to people who know what they are doing. Oh, and while the US Government has experts, it would be helpful if they talked to each other, prioritized and came to Congress with a sophisticated evaluation of the situation and an action plan.

Here's an example: you don't get to continue drilling in the Gulf of Mexico until you install an "acoustic switch" at every well site. This is simple and hard to misinterpret. The acoustic switch is required in Brazil and Norway and the Norwegian government has indicated that it works.

In the meantime, we will continue to struggle with what "moratorium" means.