API's Gerard: working with regulators on new spill rules, but they're out

    
American Petroleum Institute President Jack Gerard said on Platts EnergyWeek Sunday that his organization was working closely with regulators on newrules governing offshore oil drilling, just as the Department of the Interiorwas announcing the outline of those rules. In remarks taped Friday and broadcast Sunday, Gerard said the API wasworking to ensure that the new rules do not lead to "the bar (being) raised sohigh." If they are too restrictive, Gerard said, oil producing companies maymove their operations elsewhere, in response to a question by host BillLoveless about whether the US is such an attractive place to conduct drillingthat it could withstand some tighter regulations. In the interview, Gerard said that the new rules were to be released bythe Bureau of Ocean Energy Management during the week of October 10. But theywere published in the Federal Register October 8, the same date Girard tapedhis interview with Platts Energy Week. Among the highlights of the new rules,regulators will require negative pressure tests on wells for the first timeand imposing new requirements for cementing and well control procedures. Officials have said that compliance with the new regulations would benecessary for companies to resume operations once the moratorium expires onNovember 30 or is lifted early. "We're working closely with them to find that key balance, withoutdiscouraging energy development," Gerard said. According to Gerard, five deepwater rigs have moved outside the Gulf ofMexico as a result of the moratorium imposed after the BP Macondo blowout andspill. However, other estimates have put the figure at less than that. But "these investments are a very significant potential loss of thousandsof jobs," Gerard said. Gerard said the possibility of Congress acting on new oil spilllegislation in a lame duck session after election day would depend on theoutcome of the offyear vote. "The partisan divide is so large that it is goingto be very difficult to get anything done in a lame duck session," Gerardsaid. The full interview with Girard can be seen at http://bit.ly/cxvXUZ --John Kingston, john_kingston@platts.com