Friday, February 24, 2012

Preventing a Deepwater Horizon redux

Posted on Thursday, 02.23.12
Preventing a Deepwater Horizon redux
Cuba's first deepwater oil rig, Scarabeo 9, began drilling last month 70
miles south of Key West. Cuban officials believe the rig may tap as much
as 20 billion barrels of oil. (U.S. officials estimate a quarter to half
that amount.) If Cuba's estimates bear out, this would bring the
country's oil reserves to roughly equal those of the United States. The
Spanish oil company Repsol, as well as other international companies
with offshore leases from Havana, will drill at depths up to 6,000 feet,
as the Cuban government pursues an era of energy independence.
It is vital to the environmental and economic interests of the United
States that Cuba get this right.
The Cuban government is overseeing drilling deeper than BP's Deepwater
Horizon well and almost as close to U.S. shores, but without access to
most of the resources, technology, equipment and expertise essential to
prevent and, if needed, to respond to spills. We are deeply familiar
with the two largest oil spills in U.S. history, from the Exxon Valdez
in 1989 and following the BP Deepwater Horizon explosion in 2010. In
each case, containing and remediating the spill required the
mobilization of vast resources from the federal government, the private
sector and local communities.
The Deepwater Horizon spill, 5,000 feet below the ocean's surface,
occurred under the watch of experienced U.S. regulators, at a well
drilled by one of the world's largest, most experienced oil companies on
one of the world's most sophisticated drilling rigs. The response effort
involved more than 5,000 vessels and is estimated by BP to have cost $42
billion. The International Association of Drilling Contractors estimates
that Cuba has access to less than 5 percent of the resources used in
combating the Deepwater Horizon disaster.
It is fortunate that a company with a good track record is the first to
drill off the Cuba coast. Repsol regularly communicates with U.S.
regulators, providing them access to Scarabeo 9 when it was moored in
Trinidad on its way to Cuba. But Repsol is also hampered by this
country's embargo on business with Cuba.
The blowout preventer on Scarabeo, for example, was built in the United
States — it constitutes the rig's maximum 10 percent U.S. content
permitted by law. But the company that made it will not commission or
maintain it, nor will it supply replacement parts because it does not
have a license to operate in Cuba. One hopes that Cuban engineers are as
ingenious at jury-rigging a blowout preventer as they are with their old
American cars.
Cuban regulators are preparing themselves for the challenge ahead. They
have sought guidance from Norwegian counterparts on the implementation
of a regulatory regime known as the safety case, where risks are
rigorously identified and factored into drilling protocols, and they
have sent engineers to Brazil to learn about the deepwater oil industry.
They also studied in detail the findings of the Deepwater Horizon
commission and its companion technical report, and they have prepared
action responses to each of the report's key recommendations, as we
learned on a September visit with these officials.
But these regulators are severely hampered by the embargo. They cannot
engage in dialogue or share expertise with their U.S. counterparts.
Their engineers can be trained by international companies but cannot
attend training in the United States or be certified by any U.S.
organization. The Cuban government and Repsol have stated their
intention to comply with U.S. rules to the best of their abilities, even
though the Cuban government can have no direct contact with our
regulators to learn more about those rules.
The U.S. government can, and should, make available the resources that
the organizations involved with Scarabeo need to do their job well. It
should also be prepared, should something go wrong, to protect the
waters and beaches of Florida and the southeast United States from a
potential disaster. In the event of an emergency, the U.S. government
would likely do this. But the help might well come too late.
The private sector needs considerable time to ready an effective
response. Engineers need to understand the rig, well characteristics and
marine environment. Companies need to prepare detailed contingency plans
and to allocate appropriate equipment. The only capping stack licensed
for use in Cuba in the event of a blowout on the ocean floor, for
instance, is in Scotland, a week's trip away, and it has no licensed
vessel or crew. Certain resources may not be available if summoned at
the last minute.
The Commerce and Treasury departments have issued some licenses to
spill-response providers and are reviewing others. As welcome as that
is, it is not sufficient. The application process and the threat of very
significant fines deter many companies from even considering the
prospect. The private sector needs a clear signal from the executive
branch in order to move forward.
Precedents exist for communication between the U.S. and Cuban
governments on common interests. The Coast Guard kept Havana apprised of
developments with the Deepwater Horizon spill, at a time when some
feared the gushing oil could foul Cuban waters. Cuban and U.S. officials
have shared information on drug interdiction, immigration and weather,
and the United States exports grain and medical supplies to Cuba. All of
this has taken place without an official change in policy since the
embargo was imposed in 1962. The Obama administration has the authority
— now, without a change in law or regulation — to provide a general
license to all qualified U.S. companies that express an interest in
helping prevent and respond to a Cuban oil spill.
This is a charged issue, one that many officials might want to avoid in
an election year. Some have proposed further restricting access to U.S.
technology for companies working with Cuba in the hopes that this might
prevent the Cubans from accessing their oil. It is, however, time to
face reality. Providing Repsol and Cuban regulators with access to
resources for spill prevention and response will not further the
development of Cuba's oil and gas industry. That's already under way.
What it will do is help protect Key West. It is profoundly in the
interest of the United States that we get this right.
William K. Reilly was a co-chairman of the National Commission on the BP
Deepwater Horizon Oil Spill and Offshore Drilling and, under President
George H.W. Bush, administrator of the Environmental Protection Agency.
Megan Reilly Cayten is an energy expert with extensive experience in
Latin America and Asia.
Special to The Washington Post

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