On July 12th, U.S. Secretary of the Interior Ken Salazar issued a “Decision memorandum regarding the suspension of certain offshore permitting and drilling activities on the Outer Continental Shelf.”

His memorandum is 22 pages long, with an additional 7 pages of supplementary information.

Sec. Salazar’s language is clear and direct, and he begins by pointing out that he has a responsibility to act when a threat is observed, and he presently sees “a clear threat” (p. 2). His duty in this regard is not constrained by any requirement to balance the harm which may occur by the Secretary’s actions to mitigate a threat. But Salazar points outs, “Even if I had to engage in a balancing of the economic effects… I would conclude that a temporary suspension of drilling operations is warranted…. [T]he economic impact of a suspension… is outweighed by [the] economic impact of another catastrophic event” (p. 16).

Salazar cites several reasons for choosing Nov. 30 as the end-date for the moratorium which I will not repeat here (see pgs. 20-21). But the single over-riding determiner of both the end-date and the need for the suspension itself may be summed up in one word: uncertainty.

The Secretary points out that “… deepwater drilling is a relatively young and still-evolving enterprise (having only begun in earnest in the late 1990s)…” (p. 3). He also points out that given the commonalities across the offshore industry, “… we simply don’t know if the BP situation is unique” (p. 4). In this regard he might have added an additional reason: the lax procedures of the Minerals Management Service leave everyone wondering how many short-cuts have been allowed to slip through over the years.

Meanwhile, Salazar is quite certain about many things:

  • “BP – and the rest of industry, which has been cooperating with BP in its efforts to contain the ongoing spill – had not prepared to contain a blowout in the deepwater environment. In Congressional testimony, industry executives have admitted that the industry is unprepared to stop deepwater oil well blowouts effectively, and that many of the containment methods… have been improvised and were untested.” (p. 4).
  • “… [C]onditions undertaken in the deepwater environment carry heightened risks” (p. 5).
  • “The control system for subsea BOPs is much more complex than the control system for a surface BOP, and subsea BOPs require regular testing…. Subsea BOPs are less accessible… they are difficult to repair while attached to the wellhead… in a nutshell, the ability to contain a deepwater spill… does not exist” (p. 8).
  • “[T]he lack of knowledge about the root cause [of the Deepwater Horizon blowout] in and of itself poses a present and unacceptable risk to the extent that we have no guarantee that operators would not be engaging in the very same activity that led to the BP oil spill” (p. 8).
  • “It is clear that the apparent performance problem with the Deepwater Horizon’s BOP is not an isolated incident. Performance problems have also been identified in recent weeks with the BOPs on the relief wells that BP is drilling… It is unlikely that these problems are unique to BP” (p. 9).
  • “[D]eepwater wells can… have flow potentials that can be 5 to 10 times higher than shallow water wells…. Accordingly, operators’ worst-discharge scenarios typically anticipate larger releases from deepwater wells” (p. 9).
  • “In general, deepwater wells have more casing/liner strings, leaving less annular space between the casing and hole diameter. This makes cementing the hole more difficult” (p. 10).
  • “Complications associated with responding to a deepwater blowout include inaccessibility of the well, methane hydrate formation at lower sea-floor temperatures, longer times to move ROVs and equipment… and the need to work with larger and less available support equipment due to the greater water pressure” (p. 10).
  • “[E]xisting oversight mechanisms… are not, by themselves, adequate to prevent a catastrophic blowout and major spill” (p. 12).

In short, Sec. Salazar’s memorandum is a highly readable and well-reasoned document, and well worth the time required to consider it in its entirety:
Secretary Salazar’s July 12th Decision Memorandum

Salazar’s concerns are applicable not only to deepwater drilling in the U.S. Outer Continental Shelf, but to deep-water drilling world-wide. On July 7th the energy commissioner for the European Union said that the EU should consider a moratorium on “frontier operations” where there are “extreme parameters and conditions: ”Energy Commissioner Oettinger called for the same prudent approach which has been requested by Salazar, saying, “Given the current circumstances, any responsible government would at present practically freeze new permits…..”

Oettinger proposes deepwater drilling moratorium