Bromwich finds IHS CERA report ‘flawed’

Bureau of Ocean Energy Management, Regulation, and Enforcement Director Michael R. Bromwich has responded to a study issued by IHS CERA in July that said there was a “congestion point” in BOEMRE holding back exploration and production in the Gulf of Mexico.

Offshore staff

WASHINGTON, D.C.— Bureau of Ocean Energy Management, Regulation, and Enforcement Director Michael R. Bromwich has responded to a study issued by IHS CERA in July that said there was a “congestion point” in BOEMRE holding back exploration and production in the Gulf of Mexico. Bromwich denied the claim, saying “the study makes a number of inaccurate and misleading claims about the offshore drilling plan review and permitting process.”

The IHS CERA study title is Restarting ‘the Engine’ – Securing American Jobs, Investment, and Energy Security: The Importance to the US Economy of Restarting the Offshore Oil and Gas Exploration and Development Industry” and it was released on July 21.

Bromwich’s response letter of Aug. 2 said the study started with the “flawed premise” that the industry is stopped and needs to restart. He also said that as of July 22, BOEMRE had not seen the complete study nor had the authors made available their methodology. Bromwich called this “a departure from professional standards…and is inappropriate." The letter was made available on the Houston Chronicle website.

Further, he contended that the study had failed to take into account how the “substantial and necessary reforms in drilling safety and environmental protection” implemented by BOEMRE since Macondo have changed the regulatory process.

According to Bromwich, the study contained a number of “factual errors,” including:

• IHS CERA said that lease sales were suspended with no clear path to resumption. BOEMRE’s response was that on nine occasions since December 2010 the agency had announced plans for a lease sale in the Western Gulf of Mexico in December 2011 and a consolidated lease sale for the Central GoM in the first half of 2012. He said the study had “greater interest in trying to fit the facts within a pre-determined narrative rather than allow the facts to determine the narrative.”

• On new deepwater GoM discoveries, the report stated that none had been made in more than 12 months since the imposition of a moratorium. Bromwich said Noble Energy’s Santiago prospect and ExxonMobil’s Hadrian prospect were made by deepwater drilling operations permitted after the moratorium was lifted.

IHS CERA and BOEMRE did agree, however, that more money and resources were needed by the agency for it to process applications promptly and efficiently.

As of this writing, IHS CERA has not publicly responded to Bromwich’s letter.

08/03/2011

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