* Maximum fine is $35,000 a day even if worker dies
* Interior Dept to issue new offshore safety rule
* Report on whether to lift drilling ban ready by Oct. 31
By Tom Doggett
WASHINGTON, Sept 8 The fines U.S. Interior
Department inspectors can impose for unsafe offshore drilling
practices are not tough enough to discourage oil and gas
companies from wrongdoing, a government panel said on
Civil penalties are currently capped at $35,000 per
violation per day, which is dwarfed by what energy companies
pay to explore and produce energy resources. In addition, it
may take up to a year to levy the fine because of the time
district government offices and other bureaucratic layers have
to review such penalties.
"The current level of civil penalty fines and incentives, as
well as the processing time afforded, do not make them an
effective deterrent to violations of Outer Continental Shelf
regulations," said an Interior Department offshore safety
oversight board that issued its findings to Interior Secretary
BP was paying about $500,000 a day to lease the Deepwater
Horizon drilling rig that exploded in April, killing 11 workers
and causing the biggest offshore oil spill in U.S. history.
In an environment where many companies pay between $500,000
and $1 million daily to run an offshore facility a potential
fine of no more than $35,000, even in the case of a worker's
death, is not an effective tool to enforce safety regulations,
the panel said.
For all of last year, the Interior Department collected a
total of $919,000 in civil penalties for offshore drilling
violations, which is equal to the cost of shutting down a large
drilling facility for just one day.
Higher penalties was one of more than 50 recommendations
Salazar said he would consider to improve how offshore drilling
Separately, Salazar said he expects the department's agency
that oversees offshore drilling to present him with a report by
Oct. 31 as scheduled on whether the government's temporary
moratorium on deep water drilling should be lifted earlier. The
drilling ban is set to expire at the end of November.
Salazar said all of the recommendations for improving
offshore drilling safety do not have to be implemented before
the moratorium is lifted.
The department is scheduled to issue by the end of this
month a final rule requiring additional safety steps for
offshore drilling and will for the first time require the oil
and gas industry to establish comprehensive safety and
environmental management systems.
(Reporting by Tom Doggett;editing by Sofina Mirza-Reid)