From: Roland Goodman [mailto:Goodmanr@api.org]

Sent: Saturday, March 05, 2011 8:08 PM

Subject: Update on BOEMRE Permitting Related Issues - Summary of Outcome of Bromwich

Meeting

The following is an update to the AP I Upstream Committee regarding a meeting

with BOEMRE Director Bromwich.

Best regards,

Roland Goodman

Manager, Upstream Standards

American Petroleum Institute

1220 L Street, N.W.

Washington, D.C. 20005-4070

202-682-8571

202-962-4797 (Fax)

goodmanr@api.o rg

Upstream Committee,

On Monday February 28, 2011, the Back

‐ to

‐ Work coalition met with Director

Bromwich in an effort to address permitting issues related to environmental

assessments, containment, and the Interim Final Drilling Rule. The Back

‐ to

‐ Work

coalition is coordinated by the Gulf Economic Survival Team and has been led by Scott

Angelle, Secr etary of the Louisiana Department of Natural Resources. We have met in

person with Director Bromwich several times over the past two months and were able

to make some headway on issues related to the Interim Final Drilling Rule (the “Should

to Must” issue). Below is a summary of the outcome of the mee ting

.

1. Interim Final Drilling Safety Rule “should to must” Language –BOEMRE indicated

that they have developed revised language to the Interim Final Rule that includes the

Coalition’s suggestion to narrow the scope of the rule to drilling safety and to

eliminate the arbitrary “should to must” language

. BOEMRE will issue a Guidance

Document in the next 7

‐ 10 days that will clarify the modified scope of the IFR to

include drilling safety practices (API RP 53, RP 65 and RP 65 Part 2) and will address the

“must” issue wherein only the “shalls” of the RPs will require depar ture applications

(as opposed to all “shoulds”) while the “shoulds” will require operators to document

they have taken these standards into consideration (i.e., a checklist).



### 2

. Environmental Assessments

– The policy of EAs has changed post

‐ Macondo in that

an EA is required on each EP and DOCD. Currently, there is an EA for Shell that is

pending approval at BOEMRE headquarters. Once approved, we anticipate this EA to

be a template and provide guidance to what is expe cted on other EAs. BOEMRE

indicated today that an additional 41 wells will not require an Environmental

Assessment. This is in addition to the subset that was identified in BOEMRE’S January3 rd letter (13 Companies /16 projects) for a total of 57 wells. Companies of these 41

wells will receive letters from BOEMRE this week notifying them of this exemption.

Expanding this January 3 rd subset was a specific request of the Back to Work Coalition

as we compiled information from various companies on other wells that could

potentially be included in this subset for an EA exemption. BOEMRE identified these

41 wells because, among other things, they had an approved exploration plan, an

approved APD, and a ha d a contract in place for a rig at the time of the Macondo

incident.

3. Containment

– Secretary Salazar and Director Bromwich traveled to Houston last

Friday to view MWCC and Helix containment systems. Director Bromwich indicated

that BOEMRE is in a position to evaluate an operator’s containment plan based on one

of these two systems, supplemented by an operator’s own system/equipment, or a

combination thereof, as part of th e application process that will undergo a review on a

case by case basis.

With regard to the “should to must” issue, we intend to closely review the pending

guidance document to ensure that it sufficiently resolves this issue.