• 11 hours Russia Approves Profit-Based Oil Tax For 2019
  • 15 hours French Strike Disrupts Exxon And Total’s Oil Product Shipments
  • 17 hours Kurdistan’s Oil Exports Still Below Pre-Conflict Levels
  • 19 hours Oil Production Cuts Taking A Toll On Russia’s Economy
  • 21 hours Aramco In Talks With Chinese Petrochemical Producers
  • 22 hours Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 23 hours Maduro Names Chavez’ Cousin As Citgo Boss
  • 1 day Bidding Action Heats Up In UK’s Continental Shelf
  • 1 day Keystone Pipeline Restart Still Unknown
  • 2 days UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 2 days Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 2 days Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 2 days German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 2 days Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 2 days Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 3 days Oil Prices Rise After API Reports Major Crude Draw
  • 3 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 3 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 3 days Statoil Looks To Lighter Oil To Boost Profitability
  • 3 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 3 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 3 days Whitefish Energy Suspends Work In Puerto Rico
  • 3 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 3 days Thanksgiving Gas Prices At 3-Year High
  • 4 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 4 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 4 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 4 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 4 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 4 days ConocoPhillips Sets Price Ceiling For New Projects
  • 6 days Shell Oil Trading Head Steps Down After 29 Years
  • 7 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 7 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 7 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 7 days Venezuela Officially In Default
  • 7 days Iran Prepares To Export LNG To Boost Trade Relations
  • 7 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 7 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 7 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 8 days Rosneft Announces Completion Of World’s Longest Well

U.S. Oil Industry Fears That New Regulation Could Cost $25B

U.S. Oil Industry Fears That New Regulation Could Cost $25B

The Obama administration unveiled new regulations on offshore drilling on Thursday, rules that were several years in the making.

The regulations stem from the 2010 Deepwater Horizon disaster in the Gulf of Mexico, a well blowout that resulted in the death of 11 workers and one of the worst environmental disasters in U.S. history. The regulations call for new well-control measures, limits the volume of fluids that can be injected into wells, and requires heightened well monitoring. Related: 70-90% Decline In Well Completions Raises Hope For Oil & Gas

The oil industry pushed back against the rules, arguing that they will impose billions of dollars in new costs at a time when the industry can ill-afford them. ExxonMobil, Chevron, Anadarko and other companies have lobbied against the regulations, leading regulators to soften some requirements in the final rules compared to the original proposal from last year.

The U.S. Chemical Safety Board, an independent federal agency, said in an April 13 report that all of the regulations imposed by the Obama administration in the aftermath of the 2010 blowout and oil spill “do not go far enough to ensure effective industry management and control of major hazards or prevent possible future Macondo-type incidents.” In fact, the agency notes, many of the measures that BP and Transocean had in place before the disaster would satisfy many of the rules established after 2010. Related: The Great Glut: Why LNG Markets Might Not Balance Before 2025

The new rules from BSEE, however, would require more tests of the blowout preventers, the equipment used to shut off a well as a last resort. The regulations also require drillers to balance the injection of drilling fluids with well pressure, with the intention preventing operators from pushing well pressure too high.

ExxonMobil and other companies say the rules will impose costs as high as $25 billion over the next decade, pushing many offshore projects into unprofitably territory. Wood Mackenzie says the rules could reduce Gulf of Mexico spending by 70 percent. But the Bureau of Safety and Environmental Enforcement (BSEE) says that the rules will cost just $1 billion across the industry over ten years, and in any case, the rules are crucial to avoiding another disaster.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • RussianJew on April 14 2016 said:
    Like what is happening now is not enough for oil "barons"...
  • Lee James on April 15 2016 said:
    I would like to see analysis from professional, but independent, risk analysts about deep-water oil extraction.

    The new federal rules for bringing up crude from thousands of feet below the surface, under unusually high pressure (the weight of a school bus per square-inch) is inherently risky. Will new techno-fixes and inspections contain the risk?

    Maybe we need to look for new energy from above ground, instead of below? Old-style energy for burning up is simply looking less and less viable -- despite what new industry regulation implies. Really, how much protection is in these regulations? And will industry assume full responsibility for major accidents, as part of their cost of doing business?

    Oil operators too big to fail? What cost to extract? And what cost for us to burn precious petroleum?

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News