Countries push risk-based rules on oil drilling

WASHINGTON Fri Apr 15, 2011 12:13am BST

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WASHINGTON (Reuters) - Case-by-case regulation of offshore oil drilling is better than the one-size-fits-all approach favored by the United States, energy officials at an international oil spill conference said on Thursday.

Countries such as Britain and Norway have adopted regulatory regimes that ask companies to outline their plans to deal with the unique risks associated with each well they drill. Those governments then approve and enforce such plans.

That so-called "safety case" system differs from the U.S. style of drilling oversight, which focuses more on setting standards that companies must meet when drilling every well.

"If you use prescriptive regulations, companies become complacent," Jan de Jong, inspector-general of mines for the Netherlands, said on the sidelines of the conference sponsored by the U.S. Interior Department, held as the first anniversary of the largest offshore oil spill in U.S. history looms.

"They think: 'If I stick to regulations, then that's fine'," he told Reuters.

"We want them to identify every risk that people are exposed to or the environment is exposed to and think them all through."

Still, he said he did not think U.S. regulations were the cause of the BP oil spill.

Held six days before the anniversary of the BP drilling disaster that ravaged the Gulf of Mexico coast, the conference gathered officials from 11 countries and the European Union to consider lessons learned from the accident and to share best practices for offshore drilling.

Interior Secretary Ken Salazar and the delegates of the other countries at the conference had agreed to create a working group that could eventually lead to the development of international guidelines for safety in offshore drilling.

An explosion on the Deepwater Horizon rig last year killed 11 workers and ruptured BP's underwater Macondo well, unleashing nearly 5 million barrels of oil into the Gulf.

The Obama administration has since imposed a raft of safety measures and moved forward with rules that would take a more risk-based approach to worker safety on rigs, but Salazar warned against focusing too much on the style of regulation.

"I think sometimes there's a false choice between safety case and prescriptive rules," Salazar said.

He said most regimes would end up with a mix of regulations that fall in either category.

Martin Hoffman, deputy secretary of the department of resources and energy for Australia, said risk-based regimes still required countries to develop a general consensus about adequate safety standards.

"The safety case only works if there is a view around what is good oilfield practice, that has to be defined within real specific details," Hoffman said. Australia, which uses the safety case system, suffered from a major oil spill in its Montara field in 2009.

(Editing by Dale Hudson)