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Gulf environmental group’s lawsuit claims waivers for offshore oil drillers are unsafe, illegal

Eddie Burkhalter

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An environmental advocacy group on Thursday filed a lawsuit against the Trump administration claiming the government is allowing offshore oil drillers to skip critical safety tests put in place to prevent another event like the deadly Deepwater Horizon disaster. 

The Washington D.C.-based nonprofit legal advocacy group Democracy Forward filed a civil suit in the U.S. District Court for the District of Columbia against the U.S. Department of the Interior, the department’s secretary, David Bernhardt, the Bureau of Safety and Environmental Enforcement (BSEE) and director, Scott Angelle. The lawsuit was filed on behalf of Healthy Gulf, a Louisiana nonprofit environmental group that advocates for the protection of the Gulf of Mexico. 

The suit alleges that Angelle “secretly and unlawfully” amended rules put in place after BP’s Deepwater Horizon disaster that allow oil companies to skip critical safety tests of “blowout preventers” through the use of waivers, which don’t receive public scrutiny and are handled out-of-sight at a rate of “at least one per day.” 

On April 20, 2010, the Deepwater Horizon offshore oil rig exploded, killing 11 workers and ultimately dumping more than 3.2 million barrels of oil into the gulf, killing marine life and fouling coastlines along Florida, Alabama, Mississippi and Louisiana. 

The rig’s blowout preventer, a safety device designed to stop the unintended release of natural gas and oil, had last been inspected in 2005, and had been damaged in a previously unreported incident. Inspectors say the preventer failed to properly engage which resulted in the explosion. Other problems with the rig also contributed to the disaster, safety review’s discovered. 

“By returning the regulation of blowout preventers to the pre-Deepwater Horizon status quo, Defendants have substantially increased the chances of a catastrophic oil spill in United States coastal waters and, in turn, the chances of irreparable damage to the natural resources upon which Plaintiff’s members rely,” the complaint states. 

The Obama administration instituted what’s called the Well Control Rule in April 2016, that put into place dozens of requirements meant to safeguard against another blowout disaster, through rules for “the design, installation, and testing of the blowout preventers…” according to the complaint. 

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Offshore drilling companies opposed major portions of those rules, however,  and in May 2017, Trump’s administration nullified several of the Obama-era safety measures. Still, oil companies are requesting, and being given, waivers that allow them to operate without meeting some of the new safety rules. 

The lawsuit alleges that the Department of the Interior has used the Well Control Rule’s provisions for “case-by-case, ad hoc exceptions from its requirements in order to grant hundreds (and likely thousands) of waivers to offshore operators seeking to avoid the Rule’s blowout preventer requirements, particularly those requirements relating to the testing of blowout preventers, which are designed to ensure that blowout preventer systems will work properly in the event of an emergency.” 

Emails obtained by Politico through a Freedom of Information Act request show that the Trump administration sought to circumvent those safety rules through the use of waivers, according to the news outlet on Tuesday.   

“While we have discussed the possibility of promulgating a rule that further delays the implementation of the dates of the yet to be effective dates of several provisions of the [Well Control Rule] we are revisiting the entire [rule], please advise the possibility of avoiding that by considering evaluation of departure request of the proposed April 2018 rule,” BSEE Director Scott Angelle wrote in a September 2017, email, according to Politico.  

Politico’s article also stated that staff urged Angelle to put those directives into writing, but that it’s unclear if the Bureau of Safety and Environmental Enforcement has done so. 

According to Politico’s Ben Lefebvre, more than a third of the 1,679 waivers granted during the first 20 months after the new rules went into effect allowed companies to forgo regulations that required tests of blowout preventers. 

Cynthia Sarthou, director of Healthy Gulf, told APR on Thursday that prior to the BP disaster, the BSEE was lax in its regulation of offshore drilling, largely following the industry’s lead on safety measures. 

“We saw the results on our lives and our livelihoods of what an oil disaster really looks like in the Gulf of Mexico,” Sarthou said. “And that if you’re going to pursue this industry in the Gulf of Mexico you need to be held to account for compliance with safety regulations that protect workers, and protect the environment, which in turn, protects our economy.”

According to the Center for Biological Diversity the Deepwater Horizon disaster “likely harmed or killed about 82,000 birds of 102 species; about 6,165 sea turtles; as many as 25,900 marine mammals; and a vast (but unknown) number of fish.” 

The BP disaster was an environmental one, to be sure, but it was also an economic disaster for the many people who relied on the Gulf to make their living, Sarthou said. After years of litigation, BP will pay $65 billion toward the cleanup, but thousands of people lost their jobs. 

The BP disaster cost the Gulf of Mexico’s fishing industry between $94.7 million and $1.6 billion and between 740 and 9,315 people lost their jobs, according to the U.S. Bureau of Ocean Energy Management.  

Sarthou said it’s also not clear if companies are being scrutinized for past safety violations, or would be able to afford to pay for a disaster like BP’s, before being given waivers, because the agency hasn’t made clear the process it’s using and it’s not naming the companies. 

In an emailed statement to APR on Friday, U.S. Department of Interior (DOI) spokesperson Nick Goodwin wrote, “The lawsuit grossly misrepresents the facts and issues false accusations that challenge a nonexistent ‘Waiver Rule.’ Contrary to these fabricated allegations, BSEE has not waived requirements nor granted exemptions to the regulations regarding either the 2016 or the 2019 Well Control Rule.”

That blanket denial from the DOI to APR seemed to run counter to previous in-depth reporting by Politico and even statements from Republican lawmakers who expressed support for the agency’s loosening of regulations.

Rep. Kevin Hern, R-Okla., told Politico in March that worries from Democrats over the waiver issuances were “misguided” and that “BSEE having to provide nearly 1,700 waivers to the well control rule is clear evidence the rule imposes unrealistic requirements and that waivers are necessary to remedy the issues the rules cause.”

Responding to APR’s followup questions to Goodwin to reconcile his earlier statement, that the BSEE has issued no waivers, Goodwin forwarded to APR a letter written to the chairman of the Committee on Natural Resources by Lars Herbst, regional director of the BSEE’s Gulf of Mexico Bureau on March 6, 2019.

In the letter Herbst states that previous press coverage of the matter contained “inaccuracies” and wrote that the BSEE had issued no “waivers” but instead had approved the use of “alternate procedures or equipment (sometimes informally referred to as “alternate compliance”)” which is allowed by federal regulations. He also wrote that the engineering review process for granting such “alternate compliances” hadn’t changed from the previous administration. 

Asked to clarify what appeared to be a purposefully misleading statement and a mincing of words between “waiver” and “alternate compliance” Goodwin replied to APR that he “couldn’t disagree more. The letter clearly explains the coverage has been misleading on this, and the statement speaks for itself in response to the lawsuit.”

Goodwin also pointed to a section of the preamble to the final Well Control Rule that states the BSEE can grant the use of “alternate procedures or equipment” if a company “provide sufficient justification” and “provide a level of safety and environmental protection that equals or surpasses current requirements.” 

Further into that same preamble, however, it states that the BSEE doesn’t set specific requirements for justifying the need for “alternate compliances” and doesn’t require companies to demonstrate it can achieve the same level of safety and environmental protection.  (APR  bolded wording for emphasis)

“With respect to requests for departures from operating requirements, BSEE does not specify the type of justification required because doing so could unnecessarily limit the submission of supporting documentation that could be pertinent under the various circumstances that might arise. Moreover, even though existing § 250.409 and proposed § 250.702 do not expressly require an operator seeking a departure to demonstrate that the operator can still achieve the same level of safety and environmental protection required by the rules, BSEE expects that any request for departure will include appropriate measures to ensure safety and environmental protection.”

Charisma Troiano, spokeswoman for Democracy Forward, in a statement to APR Friday regarding DOI’s responses wrote that “DOI is trying to talk its way out of documented proof that a political appointee looked for ways to delay blowout preventer requirements, and against that backdrop the agency approved hundreds of waivers to these safety rules when asked by the offshore drilling industry.”

The oil industry promptly pushed back against the new regulations when they took effect, saying the cost to implement the changes was too high and they wouldn’t make offshore drilling any safer.  

“At a time when the entire oil and natural gas industry is facing a historic downturn regarding prices, the last thing we need is new regulations that further stifle development,” Louisiana Oil and Gas Association spokesman Ragan Dickens told the Baton Rouge Business Report in 2016.

The BSEE itself at the time cited the agency’s own economic study that found the changes would save those companies money, according to the Business Report.  

“The estimated overall cost of the rule (outside those costs that are part of the economic baseline) over 10 years will be exceeded by the time-savings benefits to the industry resulting from the revisions to the former requirements for [blowout preventer] pressure testing frequency for workovers and decommissionings,” reads the BSEE’s final rule. “In addition, the final rule will also produce benefits to society, both quantifiable and unquantifiable, by reducing the probability of well control incidents involving oil spills.”

If those companies are truly worried about their bottom lines, Sarthou said they should consider the cost of not following the rules. 

“There are many companies in the Gulf that do not have a net worth of $60 billion,” Sarthou said. Another disaster by a company without BP’s deep pockets could leave that cleanup bill to taxpayers, she said. 

“It’s something that affected millions of people, and It could still affect millions of people,” Sarthou said of the BP disaster and the possibility of future disasters. 

The offshore oil drillers are drilling deeper and deeper, she said, and the safety issues increase the further down they go. 

“So you would think it would be even more important that they be held to rigorous standards as they go into deeper waters,” she said. 

Drilling companies have tapped out the shallower reserves in the Gulf of Mexico and are heading into deeper waters, where operating is more difficult and more expensive, according to The Times-Picayune. 

In 2021, Chevron plans for the delivery a new “ultra deep water” and “ultra high pressure” oil rig in the Gulf through a contract with Transocean, the same company that built the Deepwater Horizon rig. 

Chevron has other ultra deep water projects around the world, but the company’s new rig in the Gulf would be the first “ultra-high pressure” oil rig in the world to go online, according to the Wood Mackenzie. Such rigs would operate at pressures up to 20,000 psi. 

In June 2018, another ultra deep water oil project by BP off of Nova Scotia leaked 36,000 gallons of synthetic drilling mud. The Canada Nova Scotia Offshore Petroleum Board found the accident was the result of  “mechanical failure.”

Eddie Burkhalter is a reporter at the Alabama Political Reporter. You can email him at [email protected] or reach him via Twitter.

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New unemployment claims held steady in June, state says

Micah Danney

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The number of Alabamians filing for unemployment insurance held more or less steady over the course of June, with 18,340 new claims added during the last week of the month, according to the Alabama Department of Labor.

There were 19,950 new claims in the first week of June and 18,367 in the second week, then a slight jump to 18,671 in the third week. 

The month’s total of 75,328 new claims comes after Gov. Kay Ivey relaxed some restrictions meant to slow the spread of COVID-19 and allowed more businesses to open. The numbers vary by industry and county, but generally represent some stabilization, according to department spokesperson Tara Hutchison.

“They remain significantly down from a high in excess of 100,000 in April, which is good news. I don’t know if we can really expect anything one way or another in this unprecedented situation, but the decline from early in the pandemic is of course welcome news,” Hutchison said.

About 60 percent of last week’s new claims were attributed to COVID-19. 

The state’s unemployment rate dropped from 13.8 percent in April to 9.9 percent in May. That compares to a rate of 3 percent in May 2019.

Jefferson County had the highest share of new claims last week at 2,626, followed by Mobile and Montgomery counties at 1,900 and 1,400, respectively.

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The worst-hit industries that are categorized were administrative and support services, food service and bars, transportation equipment manufacturing, general merchandise stores, nursing and residential care facilities and educational services. 

As of May, counties with the lowest unemployment rates are Clay County at 5.6 percent, Geneva County at 6.3 percent and Shelby County at 6.5 percent. 

Counties with the highest unemployment rates are Wilcox County at 19.3 percent, Lowndes County at 18.3 percent and Greene County at 16.4 percent.

Major cities with the lowest unemployment rates are Vestavia Hills at 5.2 percent, Homewood at 5.4 percent and Madison at 6.2 percent.  

Major cities with the highest unemployment rates are Prichard at 18.6 percent, Selma at 17.1 percent and Gadsden at 15.7 percent.

Wage and salary employment increased in May by 42,500, according to the department.

Average weekly earnings increased to a record high in May, rising to $905.25 per week, representing an increase of $66.43 over the year.

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Economy

Secretaries of State share joint statement on importance of USMCA launch

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Following the completion of the necessary measures to comply with commitments under the United States-Mexico-Canada Agreement (USMCA), the Agreement officially enters into force today, July 1, 2020.

As Secretaries of State who oversee the business filings process in the respective states of Alabama, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Ohio, Texas, and Wyoming, Secretaries John H. Merrill (Alabama), Paul D. Pate (Iowa), Michael G. Adams (Kentucky), Kyle Ardoin (Louisiana), Michael Watson (Mississippi), John R. Ashcroft (Missouri), Bob Evnen (Nebraska), Frank LaRose (Ohio), Ruth Hughs (Texas), and Edward A. Buchanan (Wyoming) recognize and appreciate firsthand the positive impact the USMCA will have on entrepreneurs across the country.

“Alabama’s international engagement fuels job growth and increases exports. The success of Alabama businesses depends on the participation and competitiveness of our global counterparts. Alabama totaled $6.6 billion in exports to Canada and Mexico in 2018, supporting families and businesses across the state” noted Alabama Secretary of State John H. Merrill. “I was delighted to join President Donald J. Trump in January of this year as he signed this mutually beneficial agreement, and I look forward to its future success.”

“The USMCA is a great opportunity for Iowa’s farmers, businesses and families. The launch of this agreement comes at a vital time for our country and will provide a much needed boost to our economy. Canada and Mexico bought $6.5 billion worth of goods from Iowa in 2018 and this deal ensures our partnerships with these neighbors will continue,” stated Iowa Secretary of State Paul Pate.

“The USMCA entering into force is a great deal and a win for American and Louisiana workers. The USMCA will help support and grow our economy, boost small businesses, help our farmers, manufacturers, and workers, and ensure more Louisiana-made products can be sent internationally. Trade is important to Louisiana’s economy and this deal will help boost both,” stated Louisiana Secretary of State Kyle Ardoin.

“During a time when the future of our economy seems nebulous, the USCMA creates a portal for modern opportunities and prosperous partnerships,” said Mississippi Secretary of State Michael Watson. “The enhanced agreement will undoubtedly revive businesses and help boost innovation in our state. I applaud President Trump’s leadership and dedication to ensuring a fair playing field for Mississippi farmers, ranchers, and entrepreneurs.”

“Missouri is grateful for this historic agreement, which will help Missouri agriculture and businesses grow with more jobs and increasing exports.  As our economy recovers, getting businesses and people back to work, this will help ensure success for large and small businesses who compete and form partnerships with our neighbors.  We stand ready to assist our entrepreneurs and businesses,” replied Missouri Secretary of State John R. Ashcroft.

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Nebraska Secretary of State Bob Evnen noted, “The USMCA provides expanded opportunities for Nebraska’s livestock industry, and our ag commodity and specialty crop producers. The USMCA builds on the successes and corrects the problems of NAFTA, and gives us expanded opportunities for Nebraska’s ag trade with our friends in Mexico and Canada. This excellent agreement now serves as a template for other international free trade agreements, so we have cause for optimism on many fronts.”

“Today is a day Ohio’s farmers and entrepreneurs have been waiting for,” said Ohio Secretary of State Frank LaRose. “As our nation’s economy continues to recover, the USMCA is a much needed boost as they compete on the global stage. Thanks to the leadership of President Trump, Senator Portman and bipartisan leaders from across our nation, Ohio is poised for our next giant leap, and my office looks forward to helping make it happen.”

“Last year alone, trade between Texas and its two largest trade partners—Mexico and Canada—totaled more than $200 billion. This exchange supports the more than 950,000 Texas jobs that are tied directly to trade with Mexico and Canada,” said Texas Secretary of State Ruth Hughs. “The implementation of the USMCA provides tremendous benefit to all parties involved in the trade deal and will help to ensure years of mutual economic benefit and prosperity for all. We look forward to further strengthening our relationship with our trade partners as we enter a new era of innovation and success.”

“The USMCA trade deal has high standards and rebalances North American trade to provide a stronger market for Wyoming’s and our Nation’s goods. This is a great day for our country, as businesses will better be able to participate in cross-border trade. USMCA ensures fair business practices by our neighbors and now the advantage will be back in the hands of the American worker,” stated Wyoming Secretary of State Edward Buchanan.

This historic trade agreement will result in freer markets, fairer trade, and strong economic growth across North America, creating new opportunities for American workers, farmers, ranchers, and business owners.

 

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Economy

Ivey announces SiO2’s $163 million expansion in Auburn

Brandon Moseley

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Alabama Gov. Kay Ivey announced Wednesday that SiO2 Materials Science plans to invest $163 million in an expansion at its Auburn facility.

The announcement came just after securing a major contract to supply the federal government with vials to support the COVID-19 vaccine effort if and when an effective vaccine is developed. The project will create 220 jobs.

“It is exciting to know that SiO2 will be directly involved in providing a product essential to addressing the COVID-19 crisis, which will impact not only Alabamians but the entire country,” Ivey said. “This is a testament to the ingenuity of this great company and its growing Alabama workforce.”

Economic developer Nicole Jones told the Alabama Political Reporter, “Vials produced by SiO2 Materials Science may be the critical component needed to ensure safety in the vaccine distribution process. The breakthrough technology developed by the Auburn-based company provides a glimmer of hope amidst challenging times and showcases how Alabamians are working diligently to craft solutions that will assist our nation and the world in the fight against COVID-19. In addition, the 220 new, high-skilled jobs housed in Auburn Technology Park West will bring economic benefits to Lee County as well as the entire state of Alabama.”

The expansion will allow SiO2 to increase its production capacity so that it can meet the expected demand for vials and syringes when a coronavirus vaccine is finally approved for mass use.

In June, SiO2 announced an $143 million contract with federal government agencies for a production scale-up of the company’s state-of-the-art packaging platform for storing novel coronavirus (SARS-CoV-2) vaccines and therapeutics.

Bobby Abrams is the CEO of SiO2.

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“The pandemic presents an enormous challenge for all people,” Abrams said. “We are extremely grateful for Senator Shelby’s steadfast support and assistance, and we’re honored to collaborate with our government so a COVID-19 vaccine can be safely and quickly distributed. The State of Alabama and the City of Auburn for many years have been very supportive of SiO2 Materials Science during its research, development, commercialization, and now scale-up phases of the company.”

Over the last 10 years, SiO2 has developed its patented vial platform, which combines a plastic container with a microscopic, pure glass coating on the inside that is ideal for biological drugs and vaccines. The product, developed in Auburn with help from experts from four major U.S. research institutions, combines the benefits of both glass and plastic without drawbacks.

“There are problems with plastic, and there are problems with glass, and we resolve all of them,” Abrams said.

SiO2 will expand its existing facility at 2250 Riley Street and will invest in a new molding facility at 2425 Innovation Drive, both located in the Auburn Technology Park West.

Construction is already under way to expand the facility on Innovation Drive. The completed approximately 70,000-square-foot facility will increase the production capacity of SiO2’s injection molding operation.

“We’re proud to have some of the world’s leading scientists and product developers working in our community,” Auburn Mayor Ron Anders said. “With the presence of these companies and Auburn University’s outstanding medical and engineering programs, we believe we’ll see significant growth in the biotech industry right here in Auburn. On top of that, the well-paying jobs created through this project will result in significant economic opportunities for our local businesses.”

Greg Canfield, the secretary of the Alabama Department of Commerce, said that SiO2’s expansion project in Auburn will help ensure that the nation’s health authorities have an ample supply of vials and syringes to administer a vaccine for COVID-19 as soon as it is developed.

“Having a steady supply of SiO2’s innovative vials will represent a key strategic advantage for federal agencies wanting to act rapidly once a vaccine is available to counter the coronavirus,” Canfield said.

Robert S. Langer is a professor at the David H. Koch Institute at MIT and a company adviser.

A key element of SiO2’s product is enhanced safety for healthcare providers and for patients, who are at a lower risk of adverse side effects. A combination of plastic and a microscopic layer of glass also means vials and syringes won’t break, shatter or crack. SiO2 ships its products worldwide.

“Many drug development and drug formulation innovations can be limited due to variables associated with traditional glass vials and syringes,” Langer said. “The SiO2 vials and syringes eliminate these variables and allow drug development partners to bring their innovations to life.”

SiO2 is a privately-owned company based in Auburn, where it has around 200 employees. The Retirement Systems of Alabama provided early financial support for the company.

517,464 people have already died from the COVID-19 global pandemic, including 130,602 Americans.

 

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Economy

ADOL announces extended benefits program to begin

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The Alabama Department of Labor announced today that the state will begin offering Extended Benefits (EB) for those who qualify and have exhausted previous benefits.

This is a separate program from the Pandemic Emergency Unemployment Compensation (PEUC) program that was enacted under the CARES Act.

The EB program is a federal program that is triggered when a state’s insured unemployment rate exceeds 5.9 percent. Alabama’s weekly insured unemployment rate* of 6.11 percent triggered the state onto a 13-week EB period beginning the week of May 31. It is usually available during times of adverse economic conditions. The last time Alabama offered the EB program was during the Great Recession of 2008.

While EB is available for UP TO 13 weeks, not all claimants will be eligible to receive all weeks.  Alabamians can begin claiming these benefits on July 5, 2020.

Claimants must first exhaust all regular UC and PEUC benefits before they will be eligible for EB benefits.  Claimants must not be eligible for unemployment compensation benefits in another state or Canada, must have no disqualifications, have qualifying wages, and must have at least one week in the benefit year that begins in an EB eligibility period. Specific eligibility criteria can be found at: https://wdr.doleta.gov/directives/attach/UIPL/UIPL_24-20.pdf.

Individuals are only entitled to benefits if they are no longer working through no fault of their own and they MUST be able and available for work.  The EB program has more stringent work search requirements and requires claimants to engage in a “systematic and sustained” effort to obtain work during each week and to provide evidence of efforts.  Due to the pandemic, the submission of required work search contacts has been TEMPORARILY waived due to Covid-19 restrictions. However, claimants should continue to look for work where possible, and maintain a record of their efforts on a weekly basis.  This waiver may end at any time.  Once this waiver ends, claimants will be required to provide a minimum of three (3) work search contacts each week during the weekly certification process. 

ADOL will notify those eligible for EB benefits via the UI Claims Tracker and by mail. Claimants will not have to apply for these benefits, but should continue to file weekly certifications.

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