ST Conference ReviewNOIA 2014 Annual Meeting
(Bottom row from left) Bodley Thornton, vice president marketing and contracts, Noble; Paul Danos, executive vice president, Danos; Annette Prewitt, director of performance improvement, Noble; Bob Newhouse, vice president of learning and development, Noble, who accepted the Safety Practice award on behalf of the company; and Quentin Kent, U.S. Coast Guard. (Top row from left) J. Scott Abercrombie, strategy executive—construction and fabrication, Danos; Hank Danos, president & CEO, Danos; Issac Dantin, safety manager, Danos; David W. Williams, chairman and CEO, Noble; Bud Danenberger, industry consultant; and Bernardo Kleiner, Transportation Research Board. Danos received the Culture of Safety award. Both awards were presented by Amos Bussmann, president of Compass Publications, sponsor of the awards.
The National Ocean Industries Association (NOIA) held its 2014 Annual Meeting from April 9 to 11 at the Mandarin Oriental in Washington, D.C., with 240 in attendance.
Presenters and attendees discussed the implications of the upcoming 2014 Congressional midterm elections, the economy, offshore regulatory policy, offshore security and safety, offshore technology, offshore renewable energy and seismic testing in the Atlantic.
During the meeting, Danos (Larose, Louisiana) and Noble Corp. (Houston, Texas) were awarded 2014 Safety in Seas Awards, which are sponsored by Compass Publications Inc., the publisher of Sea Technology magazine.
NOIA Fly-In. A successful series of meetings on Capitol Hill took place in conjunction with NOIA’s 2014 Annual Meeting. Several NOIA members met with various members of Congress in the House and Senate and shared the offshore energy industry’s federal policy priorities, emphasizing the value of the industry in terms of U.S. economic prosperity and energy security. Meetings were held with Rep. Richard Hudson (R-N.C.), Rep. Scott Rigell (R-Va.), Rep. Mark Sanford (R-S.C.), Rep. Cedric Richmond (D-La.), Rep. Bobby Scott (D-Va.), Rep. James Clyburn (D-S.C.), Sen. James Risch (R-Idaho), Sen. John Barrasso (R-Wyo.), and Sen. Mark Warner (D-Va.). NOIA members also met with BOEM Director and Acting Assistant Secretary for Land and Minerals Management Tommy Beaudreau at the Department of the Interior.
Welcome Reception. Several members of Congress interacted with NOIA members at the meeting’s welcome reception, including Senator David Vitter (R-La.), Congressman and U.S. Senate candidate Cory Gardner (R-Colo.), Congressman and U.S. Senate candidate Bill Cassidy (R-La.), Rep. Steve Scalise (R-La.), and Rep. Cynthia Lummis (R-Wyo.).
Congressional Panel. Four current members of the U.S. House of Representatives, Scalise, Rep. John Barrow (D-Ga.), Rep. Jeff Duncan (R-S.C.), and Rep. Steve Southerland (R-Fla.), provided an informative and animated, discussion of energy policy, federal budgetary issues and the general political landscape in Washington. The panel discussion covered a host of serious issues, but was filled with entertaining stories and colorful analogies.
Sen. Tim Scott. Sen. Tim Scott (R-S.C.), an up-and-coming GOP member of the Senate, provided the inspirational story of his upbringing and how he went from a single-parent household and very humble beginnings to his current role in the United States Senate. A true optimist, he provided a hopeful discussion about the future direction of our country and his work to bring diverse groups of people together. He is a key champion for Atlantic offshore energy development and discussed his legislation, called the SEA Jobs Act, which would open up the Atlantic for energy development and also invest in veterans’ training programs and provide funding for geological and geophysical education. Among other items of discussion were oil and natural gas export opportunities and geopolitical considerations for American energy security.
Karen A. Harbert, President and CEO of the U.S. Chamber of Commerce’s Institute for 21st Century Energy. Harbert issued a stern warning about the ongoing war on fossil fuels. Harbert asked whether we have the “open for business” sign out in this country, or are we just sitting back and letting the attacks on traditional energy continue? She noted that activists have taken the fight against natural gas to the local level with 375 separate legislative actions on the table or passed across 20 states. This is a challenge for the future of American energy security, especially as coal is being taken off the grid here in America, she said. America has a jobs problem, with a need for 20 million jobs over the next 20 years, and Harbert views the 4 million jobs provided by tapping natural gas as a great down payment on meeting this need.
Marci Rossell, Financial Journalist and Former Chief Economist for CNBC. Rossell presented compelling commentary on economic conditions thus far in 2014 compared to 2013. She explained that although the year 2014 began with a few negatives, it has also shown strong momentum. “It’s been a year of volatility,” she stated, citing the severe and prolonged winter season that affected the normal spending habits of the public. “Extreme weather conditions can disrupt the best laid plans,” she said. Rossell concluded that immigration reform, the increase of tax revenues, income inequality and government spending are all issues that must be addressed by the nation’s leaders in order to stabilize and improve the economy.
Eric Bolling, FOX News. A host of Fox’s “The Five” spoke to NOIA members about the political landscape over the next two years. Bolling took an in-depth look at the GOP field of presidential contenders since former Secretary of State Hillary Clinton is a foregone conclusion for the Democratic Party, in his opinion. Bolling sees the GOP field of 2016 contenders as already narrowed down to Sen. Rand Paul of Kentucky, Sen. Ted Cruz of Texas and possibly former Florida Governor Jeb Bush. Bolling envisions a party shift from traditional conservative to a much more libertarian approach, with social issues taking a backseat to the economy. Ultimately, Bolling opined that the best candidate moving forward will be Paul, building off his father’s unsuccessful presidential campaigns of 2008 and 2012.
Offshore Issues: A Look Ahead
Experts on a regulatory panel provided insight into a variety of key offshore issues likely to surface in 2014 and beyond.
Offshore Hydraulic Fracturing. Most in the oil and gas business have seen the attention hydraulic fracturing has drawn onshore. Recently, some groups in California raised concern about hydraulic fracturing being used to extend the life of offshore wells. Jamie Pollard, vice president, global sand management services with Schlumberger (Houston) provided a technical overview of how and when hydraulic fracturing is used offshore and how it differs from most of the current onshore use. He contrasted the amount of use onshore (17,000 wells per year) to the offshore numbers (less than 100 wells per year) and talked about the types of rocks in which fracturing is used. He pointed out that fracturing is part of an integrated approach from pore to shore, which allows industry to maximize hydrocarbon recovery.
BSEE Direct Regulation of Contractors. Industry and federal regulators have for years relied upon the paradigm where the operator has the contractual relationship with the federal government. Enforcement of regulations and lease terms have been strictly between the regulator and the operator, but since Macondo, the Bureau of Safety and Envrionmental Enforcement (BSEE) has indicated that it has the authority to directly regulate contractors and has shown willingness to do so through the issuance of Incidents and trends of Non-compliance or INCs. David Bernhardt, shareholder in the law firm of Brownstein Hyatt Farber Schreck, provided NOIA members an update on the latest developments in this area. He indicated that in 2011 there were two INCs issued to contractors, zero in 2012, and seven in 2013. In addition, the Congressional Budget Office was informed by the federal regulator that it expects to collect one-half of the civil penalty revenue in 2014 from INCs issued to contractors.
Endangered Species Act Offshore. Those familiar with onshore energy development are very aware of the implications of the Endangered Species Act (ESA), but ramifications of its increased use offshore are relatively new. Wayne D’Angelo, special counsel in the Washington, D.C., office of Kelley Drye & Warren LLP, provided a primer on ESA and the implications of listing decisions, including consultation requirements and critical habitat designation. He also discussed the movement of “sue and settle” from onshore to offshore. He concluded with a brief listing of the more than 50 species that are currently threatened or endangered, which must be considered in nearly every phase of offshore energy development.
BSEE Voluntary Confidential Near-Miss Reporting System. An overview of the relatively new program designed to encourage the reporting of near-miss incidents was given by Andre King, project lead, voluntary confidential near-miss reporting system, BSEE. A near miss is a sequence of events and/or conditions that could have resulted in loss but was prevented only by a fortuitous break in the chain of events and/or conditions. The potential loss could be human injury, environmental damage or negative business impact. The self-reporting program involves detailing the near-miss incident to the Bureau of Transportation Statistics (BTS), not BSEE. BTS will collect the incident data and simultaneously provide it in aggregate form in a published report to all offshore stakeholders, including BSEE. The information should prove useful in alerting offshore energy industry personnel of incidents of which to be aware and avoid repeating. Outreach workshops have or will be held in California, New Orleans and Houston.
Government Affairs Committee. This committee sponsored Guillermo García Alcocer, director general for exploration and extraction of hydrocarbons at the Mexican Ministry of Energy. Alcocer recapped the historical constitutional changes occurring in Mexico that now allow for private investment in Mexican oil and gas development. He also outlined future regulatory actions planned to implement a new regime reflective of these changes, while stressing Mexico will closely follow established international protocols, including those of BOEM and BSEE.
PAC Advisory Committee. The NOIAPAC Advisory Committee hosted Congressman Greg Walden of Oregon, chairman of the National Republican Congressional Committee (NRCC). The NRCC is the campaign arm of the House GOP and is charged with electing new, and protecting current, House Republicans. Walden provided insight on the current political landscape and key House races. While the Senate is not under his purview, he provided an outlook for competitive Senate seats, including those in North Carolina, Louisiana, Alaska, West Virginia, and a few others that could result in a change in the party balance in the Senate.
Health Safety, Security and Environment Committee (HSSE). The HSSE Committee sponsored a unique and well-received panel presentation by the FBI on the growing security threats to the oil and gas industry. Shawn VanSlyke and Michael Parmigiani of the FBI’s D.C. office spoke about violent crime threat and the FBI’s Crisis Negotiation Program. Leslie Kopper of the FBI’s Denver Field Office presented on national security concerns in the oil and gas industry. Steve Lupo of the FBI’s Houston office addressed current trends in intellectual property.
Public Affairs and Education Committee (PAEC). The PAEC heard from Thomas Campbell, a partner of Pillsbury Winthrop Shaw Pittman LLP, and Richard Levick, president and CEO of LEVICK, on how to lead a company through a potentially devastating event. Campbell and Levick know better than anyone the realities of the Macondo incident and the public affairs ramifications for oil and gas companies, having worked for a 10 percent leaseholder of the failed well. They warn that in today’s 24/7 new cycle, companies must learn to interact before a crisis and engage 24 hours a day once a crisis hits. The interconnected individual driving the conversation online today is looking for responsibility and change on an immediate level. If companies aren’t prepared ahead of time, they will be lost once the crisis hits without the ability to mold the conversation when things get worse.
Geological and Geophysical (G&G) Committee. The G&G Committee hosted Adm. Brian Salerno, director of BSEE. Salerno provided a regulatory update, indicating that the blowout preventer and Arctic rules should be finalized in the next few months. Salerno said the agency continues to clarify “best available technology” through an ongoing discussion with industry. He also noted the need for continued work towards safety culture, sayings he sees “pockets of safety” but no industry-wide safety culture yet. In the second half of the session, BOEM’s Gary Goeke highlighted the latest developments in the preparation of the Atlantic PEIS for seismic surveying. This PEIS was released on February 24, and the final review period is slated to end on May 7, after which the official record of decision will be issued and the permitting can begin. Finally, Karen St. John and Walt Rosenbusch of IAGC offered a summary of the work still ahead and the policy implications for seismic activity.
Technology Policy Committee (TPC). Joe Levine, chief of the Emerging Technologies Office at the BSEE, offered an overview of the BSEE Research Program. He also covered how the NOIA membership, through organizing technology-sharing workshops, might best help educate BSEE staff on emerging technologies, such as high-pressure/high-temperature drilling and corrosion issues.
Offshore Renewables Committee (ORC). The ORC hosted John G. Cossa of Beveridge and Diamond, who presented on the state and future of offshore renewable energy leasing and development. The former lead counsel for offshore renewables at BOEM, Cossa gave a thorough regulatory and leasing update. He predicted that the immediate business opportunities for NOIA members seeking to work in the renewable energy space will focus on research and survey work, with some potential for siting work. He also noted that the trend for offshore renewables moving forward will be toward smaller projects.
Safety in Seas Awards Presentation
Noble Corp. was the recipient of the 2014 Safety in Seas—Safety Practice Award, and Danos was presented with the 2014 Safety in Seas—Culture of Safety Award. The awards were presented by C. Amos Bussmann, president of Compass Publications, which has sponsored the NOIA Safety in Seas Awards since 1978.
Noble was recognized for innovative safety leadership in offshore drilling and its commitment to employee training and development. Bob Newhouse, vice president of learning and development, accepted the Safety Practice Award on behalf of Noble.
Danos was recognized for their passionate belief that all their workers deserve to be given the tools, knowledge and support that allow them to return safely home at the end of every work day. Danos has the distinction of being the first recipient of the newly created Culture of Safety Award. Hank Danos, president and CEO; Paul Danos, executive vice president; and Issac Dantin, safety manager, accepted the award on behalf of Danos.
The winners of the 2014 Safety-in-Seas Awards were selected by a blue-ribbon panel of judges: Quentin Kent of the U.S. Coast Guard, Bernardo Kleiner of the Transportation Research Board, Bob Middleton of BSEE, and Bud Danenberger, an industry consultant.
Noble and Danos will present their winning programs at the 2014 NOIA Fall Meeting in Naples, Florida, in November.