National Press Club

Energy industry must balance safety, production, Newsmaker panel says

August 6, 2012 | By Joan Mooney | Jhmooney@verizon.net

Improvements to safety and oil production in the Gulf of Mexico remain a mixed picture two years after the massive Deepwater Horizon oil spill, panelists said at a Newsmaker event Friday on the future of energy activity in the Gulf.

Drilling in the Gulf contributes 28% of annual U.S.fossil fuel production, making it a critical part of the nation's energy infrastructure.

The U.S. energy industry still needs to balance safety and oil production, said Jennifer Dlouhy, Washington correspondent for the Houston Chronicle.

“I’ve been surprised and troubled at how quickly the memory of Macondo faded,” said Michael Bromwich, a consultant and former director of the Bureau of Safety and Environmental Enforcement at the Interior Department. “In all the discussions I hear on Capitol Hill about Deepwater Horizon, I don’t hear anything about safety.”

Permits have accelerated since the drilling moratorium lifted, but the enforcement bureau needs more funding to keep pace, Bromwich said.

Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University and author of "The Outlook for Energy Production in the Gulf of Mexico: How the Regulatory Risk Premium is Restraining Production", said the permit approval process has slowed from 50 days before the spill to 207 days now.

“It’s hard for companies to plan ahead,” Weinstein said. “We need a more transparent, predictable regulatory environment.”

Another factor slowing the approval process is the increasing sophistication of wells, which require highly skilled engineers to oversee approval, Bromwich said. The federal government needs to recruit them and Congress must approve enough money to pay them, he said.

Steve Levine, author of "The Oil and the Glory," a book on the geopolitics of oil, said the likelihood that 22,000 oil workers retiring next year will temper any rush to drill even if the entire Gulf opened to drilling.

All these issues should be addressed in an overarching energy policy, yet energy is not top of the agenda in the presidential campaign, Weinstein said.

“We don’t have a sensible energy policy in this country, and we need one," he said.