regulatory system for deepwater drilling from reliance on mainly prescriptive regulations to performance-based regulations that specify safety goals to be achieved by the regulated organizations, as discussed below. The chapter also provides recommendations for enhancing the regulatory reform that is now under way. The recommendations were developed to address needs identified during presentations to the committee, in previously published reports (such as Presidential Commission 2011), and the committee’s evaluation of regulatory systems for offshore drilling in the Gulf of Mexico and other locations (e.g., the North Sea).

REGULATION OF U.S. OFFSHORE DRILLING BEFORE THE MACONDO WELL BLOWOUT

MMS had relied on a primarily prescriptive approach for regulation of offshore drilling. Under that approach, specific requirements for equipment and operations were developed, and then compliance with the regulations was monitored through auditing. Prescriptive regulations are often developed through a multiyear process in response to events or observed trends. As a result, the regulations invariably are neither timely nor complete and lag behind the development of new technologies.3

Over the past few decades, exploration and production companies within the oil and gas industry developed advanced technology that led to a marked increase in deepwater drilling in the Gulf of Mexico. During that period, the predominantly prescriptive regulatory system for deepwater drilling used by MMS did not keep up with these technological advances. It became more problematic because its level of funding and technical staffing remained static or decreased as industry’s offshore drilling activity increased. Furthermore, the distribution of those limited resources among MMS regions was not aligned with the relative amounts of offshore industrial activity in the regions. The Pacific region, with about one MMS inspector for every five offshore facilities, was more fully staffed and equipped than were the Gulf of Mexico regions, which employed about one inspector for every 54 facilities (DOI 2010b).

As discussed previously in this report, the Macondo well blowout was precipitated by multiple flawed decisions involving the operator, drilling contractor, and service companies as they moved toward temporary abandonment of the well despite indications of increasing hazard. The net effect of these decisions made by the rig personnel was to reduce the available margins of safety that take into account complexities of the hydrocarbon reservoirs and well geology discovered through drilling and the subsequent changes in the execution of the well plan. Critical aspects of drilling operations were left to industry to de-

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3A general discussion of federal regulation of offshore drilling in the United States with a focus on regulatory oversight of deepwater drilling in the Gulf of Mexico is provided by Presidential Commission (2011).



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