Offshore Drilling Bill Needs Environmental Safeguards
PART I :RISK IN SPEEDING UP EXPLORATIONS
The US government's Offshore Drilling Reforms Bill, a quick-fire response to the BP Gulf Oil crisis is being tabled in the US Congress next week. Is it adequate to manage the risks in oil exploration? Or is it a similar lackluster legislation like the one that President Nixon’s Government cobbled up 40 years ago after the mammoth 1969 Santa Barbara oil spill by Union Oil?
One of the reasons why such environmental disasters happen is because regulatory changes if at all made, after major calamities are often superficial and have only input from the oil industry and no participation from third party inspection agencies, external technical experts or the environmental groups. We will explore each area of failure of the two major disasters of 1969 and 2010 which are quite similar in nature, and bring forward reasons to show that regulators and legislators are too lax about environmental safeguards and need to re-look at the offshore oil prospects and lease conditions afresh.
The first issue we take up are the changes needed to ensure that their is no undue haste in completion of exploration projects. Lease periods for oil exploration should be long enough to ensure safety, so that companies do not have to rush to complete projects for profit maximization. If at all any changes have to be done, the area of lease prospects for the given time frame must be reduced so that oil companies are not stretched, as we see both the 1969 and 2010 disasters were due to undue haste.
Surprisingly the Obama administration itself is guilty of pushing projects by reducing the lease period of offshore well contracts. A few weeks before the BP oil rig explosion, the US Interior Department released lease sale 213 documents for bidding on 36 million offshore acres for oil drilling at a distance of 3 to 250 miles of the coast of Louisiana, Mississippi and Alabama. The lease would explore 6800 tracts at water depths of 10 feet to 11200 feet , and could produce 1.5 billion barrels of oil and 5.4 trillion cubic feet of gas.
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