Before the BP Deepwater Horizon oil spill in 2010, the Minerals Management Service was tasked with regulating offshore energy industry — until the agency was dissolved due to widespread corruption. The agency held conflicting roles, responsible for both regulating the offshore energy industry and maximizing profits. Now, the Bureau of Safety and Environmental Enforcement (BSEE) is in charge of improving safety and ensuring environmental protection for offshore energy development.
A recent report from the National Academies of Sciences, Engineering and Medicine looks at BSEE’s progress over the last decade, as well as critical gaps that still exist in holding industry accountable.
Sea Change managing producer, Carlyle Calhoun, spoke with the director of BSEE, Kevin Sligh, about the improvements in making offshore drilling safer, and whether enough has been done to ensure the safety of workers and our environment.
Note: NAS is a funder of Sea Change. The following conversation has been edited for length and clarity.
Carlyle Calhoun: BSEE is an agency that was created in the aftermath of the BP disaster to replace the Mineral Management Service. Can you talk about why this was an important change and what BSEE's role is?
Kevin Sligh: So, I think that's a great question. With BSEE's role with industry, we definitely thread a needle. We definitely need cooperation, but most importantly, we regulate operations from a safety and enforcement and compliance perspective to protect the environment. We work with industry to set up regulations and standards to make sure that all of the operations on the Outer Continental Shelf are being done in the safest manner to protect the environment and also the workforce that is out there supporting activities on the Outer Continental Shelf.
CC: Could you explain how BSEE is different from the system that was broken before under the Mineral Management Service? Everyone admitted that there was an issue there.
KS: Yeah, you know, I’m not getting into the specifics of the issue. But, we’ve doubled down. We’ve made it very intentional to keep that separation as the regulator, from an ethical standpoint.
CC: You were here in the aftermath of the Deepwater Horizon oil spill. Could you tell us more about your experience and how that experience informs your work now?
KS: I did 20 years in the Coast Guard and had the opportunity to respond to the Deepwater Horizon incident. I definitely had a chance to really see where things worked well from another agency's perspective and things that could be improved. I was here in DC that fateful night 11 folks lost their lives. Then in the aftermath, I was summoned down to the Gulf of Mexico where I was assigned to be the Operations Section Chief, taking a look at all of the different work that was going on to make sure that we were properly skimming the oil, we were probably dispersing the oil, what are called “in situ burns” (which is the controlled burning of oil), to even mechanical recovery onshore. So I owned all of that from an operational standpoint. But there was one piece that I really didn't understand, and it was the actual wellhead and the amount and the flow rate that was coming out of it, and those subsea dispersants that were being used to disperse the oil as quickly as possible as it entered the water column: I had no visibility on that as the Operations Section Chief. I had no visibility on what work was being done, how it was being planned for, and how it was being executed. So I took a look at, you know, how do we better integrate those operations to make sure that the Coast Guard, the EPA and these various other Federal interagency partners have visibility on that work.
CC: The lack of communication issues were made evident after Deepwater Horizon. Do you feel that BSEE is now receiving all the information necessary to regulate and make decisions from industry? Are they sharing as much information as you would like them to share?
KS: Yes. So, we are hands-on working within the National Response Framework to make sure that our partners are looped in, should there ever be another well control event. We are building out opportunities to use the Department of Interior Strategic Advisory Group, which was the group that allowed academia to come in after Macondo (the blowout of the Macondo well led to the Deepwater Horizon disaster) to be able to make sure that the amount of oil was coming out of that well was truly represented.
CC: That is a big difference when you talk about making sure you have the information on how much oil is spilling out of the well should there be another big oil spill. And that is different from 2010 when BP had their underwater videos that no one else had access to, and BP was saying a much different number regarding how much oil was spewing from the well than from what experts were able to determine eventually, once Congress forced BP to release the videos.
A question about industry culture: There was a recent report released by the National Academy of Sciences that said, “There is little evidence that the industry is working collectively to enhance its safety culture.” Is this a concern for you?
KS: That is one of the things that was highlighted, but here's what I can say as the BSEE director. I've been here for a year and four months. And when I sit down with the industry folks at my level, with my folks at the regional level, and with the district office level, industry is looking at safety. Their job is to protect human lives and the environment. It's not just BSEEs concern. It’s one of the highest priorities for these individual owner-operators that operate on the Outer Continental Shelf. So if you're asking me specifically, are they in concert? I think they are. From my perspective, each one of the majors and mids are working toward a better safety culture every day.
CC: I’m going to push back on that because this report was completed by a lot of people who were part of the commission after Deepwater Horizon. A lot of people who've worked in oil and gas for a long time, a lot of people who know this industry, and that was their main criticism. There's not been enough done by industry to fix one of the root causes of the disaster, which was the lack of safety in the culture.
KS: Well, my talking points won't change. Like I said, we are working every day to have conversations individually with each owner-operator to make sure that they are focusing on safety. There are some things that we could do better from my perspective as these owner-operators are operating out on the OCS from a contractor perspective. And I think what I'm hearing is that they're trying to work their contracts a little bit better to make sure that they press upon their contractors that they have to follow the same regulations and standards that the owner-operators do from a safety culture and a safety perspective.
CC: Right. And that's actually an important point, because SEMS, which is your safety and environmental management system…
KS: It’s the audit system we use, correct.
CC: It’s the rules that you can enforce with leaseholders and operators. But there seems to be a big concern with this system. It's only enforceable with the leaseholders and operators, but not with the contractors who are actually now doing 80% to 85% of the work out there and usually the most hazardous work. So how are we ensuring that it's all done as safely as possible if you can only enforce those rules and regulations on a small percentage of the people actually doing really risky work?
KS: Well, I think that's a great question. We tried to take a hard look at that post-Macondo, and it wasn't received well. Have we taken another bite at it? Not at this time, but we are trying to do things within our regulatory regime to move the ball, to start thinking a little bit more about best available science. We are incrementally trying to jump across the chasm. I don't know if we'll ever get to the point where the contractors will fully have to follow those standards.
CC: And we are now drilling farther out and much deeper than we were 13 years ago, which is far riskier. So, are we really safer, and are regulations keeping up with that increased risk?
KS: You know, I really can't speak to what's in the rules that we're currently working on to hopefully get out as final rules here by the end of the year. But what I will say is that some of the work that's being done — going deeper into the Gulf of Mexico waters and further out — really just shows the level of expertise that not only industry is displaying, but also BSEE's displaying. Industry doesn't want to have another well control event either. You know, it's not just the government regulator that's trying to make sure we don't have another Macondo or Deepwater Horizon. Industry is, to be quite honest, they don't want to have anyone question their viability in the future. And they don't want their brand to be hit, such as what happened during Deepwater Horizon.
CC: That's interesting. I mean, that is kind of what is in the background of this whole conversation is, of course, climate change and the conversation about a transition. And as you're saying, these companies want to remain viable. So let's talk about the future. A recent University of Michigan-led study found that the Gulf's offshore fossil fuel production has twice the climate warming impact as official estimates, and yet we're expanding oil and gas drilling in the Gulf at a time when scientists are saying we need to phase out fossil fuel use as soon as possible. So how are climate implications being considered in what BSEE does?
KS: What are we doing to move forward from a climate change perspective? You know, everybody talks about clean energy. And we are moving into that phase where the U.S. government and industry are looking at opportunities. President (Biden) has his 30 gigawatts by 2030 perspective. So how do we get to these huge numbers by this administration's promise to the American public? Industry is moving toward what I would call “retooling its views” and looking at potentially diversifying its risk and trying to get to carbon net zero by 2050. And what I tend to do is look at it from this perspective: As we move to a different culture here within BSEE, where we traditionally have looked at oil and gas as the primary way to provide energy to the United States, we're now moving into offshore wind and carbon sequestration. What I try to impress upon my workforce is that we're diversifying our energy portfolio to make sure that we're not as dependent on domestic issues or international issues like the Ukrainian war that then drive up energy prices moving forward.
CC: You were just talking about the transition away from oil and gas production in the Gulf, that is already ongoing and will continue. So something that I know you're very aware of is how much abandoned infrastructure is already out there. There are thousands and thousands of miles of abandoned pipelines. Companies have been allowed to walk away from over 97% of decommissioned pipelines since the 1960s. And a new study identified 14,000 abandoned wells in the Gulf, which is a huge issue because of methane emissions and leaking oil. Those abandoned wells will cost us $30 billion to safely plug them. All of this polluting infrastructure, we’ve just allowed companies to walk away from, leaving it up to the taxpayers to pay to clean it all up. So as this transition continues away from oil and gas, how is BSEE going to ensure that all of this additional equipment and infrastructure is decommissioned safely and that it’s not going to be left to the public to pick up the tab for it all?
KS: We are working through our updates on Bureau's (the Bureau of Ocean Energy Management and BSEE) financial assurance rules to make sure that we can hold industry accountable to be able to do what they're supposed to do from a decommissioning standpoint, which was a lease stipulation when they obtained these leases. But it shouldn't be incumbent upon the American public to pay and foot that bill. So we're trying to get better. We’re not completely there, but we are moving in the right direction to make sure that we hold industry accountable moving forward.
Note: Kevin Sligh also told Sea Change that BSEE will be releasing a new well control rule and a new high-pressure/high temperature rule later this year. These are rules that aim to increase safety as the industry moves to deeper and more challenging environments. Sligh would not discuss details of the new rules before they are released.
