Trump administration aims to ease offshore rules
Environmental, safety advocates say moves aren’t worth risks.
PORT FOURCHON, LA. — A dozen miles off the coast, on a rusty, aging platform, workers in hard hats and overalls spend their days extracting oil and gas from the ocean floor before retreating at night into tiny weather-beaten steel cubes that act as dorms.
The platform, owned by a Houston-based energy company that until recently was bankrupt, has none of the grandeur — or profits — of the deep-sea structures over 100 miles offshore that are operated by international giants such as Exxon Mobil and Chevron.
But the company, Energy XXI, and other struggling operators in the shallow waters of the Gulf of Mexico are beneficiaries of the Trump administration’s efforts to increase offshore production here — in large part by upending financial, environmental and safety regulations that the companies oppose.
While attention has been focused on President Donald Trump’s disputed decision in January to reverse drilling restrictions in nearly all U.S. coastal waters, the administration has also pursued a rollback of Obama-era regulations in the Gulf. Those rules include safety measures put in place after the explosion and sinking of the Deepwater Horizon rig in 2010, a disaster that killed 11 people and resulted in the largest marine oil spill in drilling history.
Smaller oil and gas companies, many backed by Wall Street and private equity firms, say they need the relief to survive financially, and the top safety official at the Interior Department appointed
by Trump has appeared to be an enthusiastic ally.
“Help is on the way; help is on the way,” the official, Scott Angelle, said in September at a gathering in Lafayette, Louisiana, of oil and gas executives from so-called independent companies, which focus on drilling alone rather than the extended drilling-to-gasstation operations of bigger competitors.
But an analysis of federal inspection data by The New York Times found that several of the independent companies seeking the rollback, including Energy XXI, had been cited for workplace safety violations in recent years at a rate much higher than the industry average. Their offshore platforms suffer in some cases from years of poor maintenance, as well as equipment failures or metal fatigue on aging devices, records show.
In addition, there was a string of serious environmental and safety episodes in the past six months involving independent operators, including the death in February of a worker who was removing firefighting equipment from a platform about 30 miles offshore, and an oil spill in October that is considered the largest since the Deepwater Horizon episode, according to Interior Department records.
“These regulations were written with human blood,” said Lillian Espinoza-Gala, a former offshore worker who now serves as an industry safety consultant and opposes easing protections. “The only way we can honor those who lost their lives is for us to learn how to do this in the correct way.”
But Angelle has close personal and recent ties to the oil and gas industry, particularly the smaller companies seeking his intervention.
Now he is the top official at the Interior Department’s Bureau of Safety and Environmental Enforcement, a division created under President Barack Obama to toughen safety standards and enforcement in offshore drilling because of problems exposed by the Deepwater Horizon accident. Angelle spent his first months on the job, records show, traveling between Washington, Texas and his native Louisiana to meet with executives at most of the top offshore oil companies, including some repeatedly cited for safety violations.
“What appears to be going on is a redefinition of the agency’s mission,” said Michael R. Bromwich, a former federal prosecutor and inspector general at the Justice Department who became the first head of the bureau in May 2010. “This is a safety and environmental protection agency. It is not part of the agency’s mission or mandate to increase production of oil or gas. That is inappropriate.”
Angelle declined to be interviewed for this article. But in a written statement, he disputed that his agency had backed off its commitment to safety. “We must never have another Deepwater Horizon or anything close to it,” Angelle said.
An agency spokeswoman said that all Americans benefited from his efforts.
“The work we are doing in BSEE benefits the entire nation, and we are supporting the president’s objective of safely achieving energy dominance in order to contribute to national security, economic security and energy security,” said Eileen Angelico, the spokeswoman.
The agency is starting an enforcement effort that will focus inspectors on platforms with the most frequent problems, reducing paperwork requirements so they can spend more time on checking equipment.
But agency documents suggest moves he has already made could save the industry more than $1.3 billion in compliance costs during the next decade.
The Interior Department has joined the effort more broadly. Last year, the department suspended a requirement imposed on Gulf rig owners, a change that will save them hundreds of millions of dollars. The rule required owners to buy additional bonds or provide other assurance that they could cover the costs of removing rigs once they stopped producing.
The rule was meant to keep taxpayers from having to pick up the tab, but a collection of operators last year — with help from high-profile lobbyists — convinced the Trump administration that the requirement was too onerous. The change has mostly benefited independents like Energy XXI.
Separately, the administration has reduced the royalties independent companies pay when drilling on new leases on the continental shelf, the shallow area of the Gulf before the ocean floor drops more than a mile deep.
Even as safety has improved for the industry as a whole, some independent operators have lagged significantly behind, federal records show.
The most serious offenses involved Black Elk Energy Offshore Operations, which was convicted in August of eight felony violations related to a platform explosion that killed three workers and injured several others. It has since gone out of business, one of at least 19 oil and gas companies in the Gulf to go bankrupt since 2015.
Representatives from Energy XXI declined repeated requests for comment.
‘Always the workers who pay’
Oil and gas companies pushed to unravel a major safety requirement known as the well-control rule, which regulates methods used to drill new oil and gas wells — and prevent explosions.
It took six years after the Deepwater Horizon accident to enact the rule, which took effect in July 2016.
At a meeting Angelle called in September, industry officials detailed their objections while members of staff — some of whom helped write the rule — sat taking notes.
In late December, Angelle sent the White House a proposal to overhaul the well-control rule, estimating that oil companies would save $986 million in the coming decade. The proposal included many changes requested by the industry.
“Oil and natural gas operators raised concerns about certain regulatory provisions that impose undue burdens on their industry, but do not significantly enhance worker safety or environmental protection,” said the confidential draft, a copy of which was obtained by The Times.
Though the proposal is undergoing a review before the revisions are made public, the White House has made clear that it welcomes the effort. A White House spokeswoman declined to comment.
To some longtime residents and activists, the changes are not worth the possible tradeoffs in safety and environmental protections.
“It’s always the workers who pay,” said Scott Eustis of the Gulf Restoration Network, an environmental group.
The Gulf generates 97 percent of offshore oil in the United States, about 18 percent of the country’s crude oil and $2.8 billion a year in royalty and lease payments to the federal government.
In early March, the number of drilling rigs used in the Gulf was just 14, compared with 145 at the industry’s peak in 2000.
The downturn was set off by a drop in oil prices, competition from fracking and other sources and, local businesses will tell you, an overbearing regulatory reaction to Deepwater Horizon.
The primary concern voiced here is economic.
“Half the supply boats and crew boats up and down the bayou have been seized by the banks,” said Kathleen Chiasson, who once ran a truck-dispatching company that supplied the industry. “I just hope someone can do it to get it back to at least half the way it used to be.”
Some of the rule rollbacks include Obama-era regulations in the Gulf — safety measures that were put in place after the explosion and sinking of the Deepwater Horizon rig in 2010, a disaster that killed 11 people and resulted in the largest marine oil spill in drilling history.
In Port Fourchon, La., John Guidry and Capt. Sean Sandell talk on an offshore supply ship owned by Aries Marine, which repairs platforms in shallow waters.