Top offshore drilling regulator stepping down

The nation’s top offshore drilling regulator is set to step down later this year, just as the federal government drafts new rules to boost the safety of coastal oil exploration.

In leaving the Interior Department’s Bureau of Safety and Environmental Enforcement, director James Watson is returning to his maritime roots. The retired Coast Guard admiral is set to take over as president and chief operating officer for the Americas division of the maritime classification society ABS.

Watson announced he was leaving in an e-mail to bureau staff Tuesday morning, saying he was leaving with a “heavy heart” for “the perfect job,” well suited to his background as a naval architect and marine safety professional.

Watson’s move marks the latest personnel shuffle at the top of the agency tasked with policing the offshore drilling industry. Created in the wake of the 2010 Gulf oil spill, the bureau has had two directors. Watson has been on the job since December 2011.

Interior Secretary Sally Jewell praised Watson for helping to “implement the most aggressive and comprehensive offshore oil and gas regulatory reforms in the nation’s history.”

During his tenure, Watson has presided over the implementation of broad new rules requiring oil and gas companies to holistically assess and mitigate risks offshore and then subject those safety programs to regular audits.

And he has continued the bureau’s aggressive stance toward penalizing offshore contractors and service firms for violations on the outer continental shelf. That strategy, adopted under Watson’s predecessor, Michael Bromwich, moved regulators beyond their traditional laser-like focus on policing just the oil and gas companies operating offshore.

Watson also pushed a new policy statement affirming that stance and asserting that the bureau would monitor the safety of companies and contractors working offshore.

Oil industry leaders and their allies on Capitol Hill have had a relatively warm relationship with Watson, in contrast to more combative interactions with some prior offshore drilling regulators.

“Director Watson took the time to understand the offshore energy industry and was always willing to meet with industry members to discuss mutual issues and concerns,” said Randall Luthi, president of the National Ocean Industries Association.

Jim Noe, executive director of the Shallow Water Energy Security Coalition and executive vice president at Hercules Offshore, said Watson adopted a “collaborative and open approach” during his tenure at the safety bureau.

“Regardless of whether we always agreed with his decisions, he always gave us a square deal,” Noe said.

Erik Milito, upstream director for the American Petroleum Institute, said the industry has worked with Watson toward “the common goals of safety and environmental protection in offshore operations.”

It is unclear how Watson’s departure might affect the timeline for looming new proposals to tighten performance standards on critical emergency equipment known as blowout preventers and production systems used offshore. Those new mandates were on track to be formally proposed later this year.

In an interview with FuelFix, Watson stressed his desire to heed input from oil and gas operators, drilling companies, equipment manufacturers and other stakeholders in writing the rules.

It also is not certain who might fill Watson’s post at the head of the safety bureau. Because Congress has not passed legislation formalizing the bureau or making the director a Senate-confirmable position, any replacement tapped by President Barack Obama could quickly assume the job.

Watson is expected to leave his BSEE post by September. At ABS, he will have responsibility for activity in North, South and Central America, as well as the Caribbean.

Before joining the safety bureau, he was the Coast Guard’s director of prevention policy for marine safety, security and stewardship. He also was the federal on-scene coordinator for the government-wide response to the 2010 Gulf oil spill as crude was still gushing out of BP’s Macondo well.

Watson praised bureau staff for working in hazardous conditions to boost the safety of offshore oil and gas development.

“I’m particularly proud of the ‘Safety at all levels, and all times’ organizational mantra we have adopted,” Watson told bureau employees. “I truly believe BSEE walks the talk for safety in the offshore oil and gas industry. The challenge of doing safety and pollution prevention is you never really know how many lives and spills you saved. You just have to believe in your mission and your proficiency at succeeding in what you set out to do.”

ABS Chairman Christopher Wiernicki said Watson’s background makes him well suited for his new role.

“The Coast Guard, BSEE and ABS have similar missions of promoting safety and protecting the environment; so Jim’s background makes him uniquely qualified for this position working alongside both the marine and offshore industries,” Wiernicki said in a statement.