Obama drilling chief: 'Time-out' might be needed as industry takes on more risk

The Interior Department’s offshore drilling safety chief said more review is needed to gauge whether industry technology is keeping pace as companies push into increasingly risky climates, suggesting a “time-out” could be needed in the future.

James Watson’s comments arrive as oil companies are drilling in ever-deeper waters and more remote regions, including the Arctic, in search of new finds. Watson noted that existing technology and management systems are continually being used in “higher and higher risk areas.”

“So I think there is a role for someone outside of the business to actually be able to say ‘time-out,’ we are now stretched about as far as we might want to be stretched with the technology that has been in place for 10, 20 years or whatever,” said Watson, head of Interior’s Bureau of Safety and Environmental Enforcement.

“I think that at some point there is an important role that the government needs to play in saying well, wait a minute, let’s just see where we are, and before we stretch that technology another step, is there some work that needs to be done in the applied research area to create a better system of something that is designed specifically for the conditions that we now operate in,” he said at a drilling event hosted by the Center for Strategic and International Studies.

Watson, whom The Hill profiled here, said he is “intrigued” by an environmentalist’s suggestion at the same event for a periodic outside review of the industry’s technological and management capacity.

Elgie Holstein of the Environmental Defense Fund (EDF) suggested a “periodic technology and managerial review” of the industry carried out by an outside organization such as the National Academy of Sciences or the National Academy of Public Administration.

He suggested such reviews could be conducted when the Interior Department is crafting its five-year offshore leasing plans. The current plan runs from 2012-2017 and includes, in the later years, lease sales for Arctic waters off Alaska’s coast.

“It is a concept that goes hand in hand with the recognition that offshore oil drilling over time is going to become nothing but more complex, the environments will become more challenging, the equipment will be more complex to operate, the managerial challenges of coordinating everybody on the rig and off the rig will become that much greater,” Holstein, EDF’s senior director of strategic planning, told reporters after the event.

Discussion of broad, future reviews of the industry’s technology come as companies are already drilling in deep, high-pressure waters in the Gulf of Mexico, and beginning the early stages of Arctic exploration.

Watson’s agency recently gave Royal Dutch Shell permission to conduct preliminary drilling off Alaska’s northern coast, but the company did not win approval to drill into oil-bearing subsea zones and has abandoned that effort for this year.

Interior has beefed up drilling and rig safety regulations and overhauled oversight in the wake of the 2010 BP oil spill.

At Tuesday’s event, Watson and industry officials — including Charlie Williams, who leads the industry’s Center for Offshore Safety — discussed their ongoing work to boost safety practices.

But with companies pushing into more and more extreme and remote environments and higher pressures, Watson said an additional way to see if technology is keeping pace might be needed.

“In an industry that is constantly exploring and pressing its technology forward, I think you also need another mechanism, and I don’t know what it is. I don’t think we have got it quite yet,” he said.