US drilling chief says flawed applications behind slow permits

Washington (Platts)--13Sep2011/1133 am EDT/1533 GMT

The chief US regulator for offshore drilling Tuesday dismissed complaints about slow permitting and said the oil and natural gas industry "needs to step up its game if it is genuinely interested in a more efficient process."

Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, called "flawed and incomplete applications" a significant source of permitting delays. He said the drillers need to stop turning in applications that use "cookie-cutter templates" or that lack information about subsea containment after potential blowouts.

"This is unacceptable, and we will obviously not approve an application with such blatant errors," he said. "We are not talking about simple typographical errors. We are talking about applications with completely incorrect data, or that are missing key data, or that contain completely inconsistent data."

Bromwich made the comments during a speech at the Center for Strategic and International Studies in Washington to mark the October 1 completion of a regulatory overhaul after BP's Macondo disaster.

The BOEM was doing its best to help industry clear up confusion over new standards and to get them back to work in the Gulf of Mexico, he said.

Industry groups and politicians complaining about slow permits have supported their gripes with "flawed and frequently unstated methodologies" and by creating numbers "out of thin air," Bromwich said.

"I continue to be disappointed to see politically motivated, erroneous reports and commentaries, sponsored by various industry associations and groups, criticizing the bureau for allegedly 'slow-walking' permits and plans," he said. "That is a phrase we see repeated over and over again, and it is simply not true."

In the deepwater Gulf of Mexico, the agency has approved permits for 40 unique wells requiring subsea containment. Another 12 deepwater permits are pending, and 23 applications were returned to operators needing more information.

"The simple fact is, we are reviewing and approving permits as expeditiously as we can given our current resources," Bromwich said.

CHEVRON CEO'S COMMENTS

BOEM employees have spent more than 1,350 hours of overtime reviewing plans and permits in the past six months, he added.

"In light of that, it is unfair and inappropriate to accuse this bureau of 'slow-walking' anything," he said.

Bromwich said he was pleased by Chevron CEO John Watson's comments Wednesday that BOEM was not slow-walking permits. Rather, Watson said he believes the backlog in deepwater permits is due to regulators not having enough manpower to process the increased amount of information required since enacting the tougher standards.

"I know the BOEM has taken criticism," Watson said. "They are working very hard to process" the permits. "The bar has been raised. We need to fund that agency."

Bromwich called it the first time the head of a major oil and gas company defended his agency on the permitting pace.

"It was about time that we heard an oil company executive say publicly what many had been saying privately to us for many months," he said. "We understand that operators would like the permitting process to move more quickly. But that's very different from suggesting that there have been concerted efforts to slow things down."

--Meghan Gordon, meghan_gordon@platts.com

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