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January 29, 2018
Energy Development in the Trump Administration: Changes and Their Implications
Former U.S. Department of the Interior official Tommy Beaudreau stopped by EPIC for a wide-ranging conversation.
During Tommy Beaudreau’s six and a half years serving in the U.S. Department of the Interior under President Obama, the administration made a host of changes—from new safety requirements and structural reforms after the Deepwater Horizon oil spill to a moratorium on new coal leasing to the approval of America’s first offshore wind project. Many of these changes have, or are in the process of, being rolled back by the Trump administration as they move to make it easier to drill on federal land. Just this month, Interior Secretary Ryan Zinke proposed opening up a vast amount of offshore land to oil drilling.
Beaudreau, who served as the chief of staff of Interior after becoming the first-ever director of the Bureau of Ocean Energy Management, discussed these policy changes and offered an insider’s perspective on the inner workings of Interior at an EPIC event on January 24. The conversation was moderated by Mark Templeton, director of the Abrams Environmental Law Clinic at UChicago Law School.
The discussion started from the beginning—what brought Beaudreau to Interior? When the Deepwater Horizon oil rig exploded in April 2010, Beaudreau was working at a law firm doing unrelated work.
“When the oil spill happened, I remember, probably like many of you, sort of sitting, feeling very frustrated, angry, but also unknowing of what role I could play in doing anything about it,” he said.
Beaudreau and his law partner were tapped by Obama’s Interior to execute a two-pronged response to the disaster: raise safety standards for the industry and evaluate the Minerals Management Service’s (MMS) performance as the chief watchdog for the offshore industry to make sure an accident like the Deepwater incident wouldn’t happen again. The latter led to the separation of MMS into three separate agencies, and Beaudreau was selected to lead one of them, the Bureau of Ocean Energy Management (BOEM).
Splitting MMS into three agencies was done to separate the revenue-collection division of MMS from the division responsible for enforcing safety regulations. Beaudreau said having the two together fostered a “cozy” relationship between industry and its regulators and pitted divisions of the agency with conflicting missions against each other. He also noted that the revenue division had been plagued by scandals that well pre-dated Deepwater Horizon.
Zinke has proposed re-combining the three agencies, an idea Beaudreau said even many in the industry are concerned about. Beaudreau said the decision to split MMS into three agencies was made after building a compelling case and explaining to career employees why such a major disruption was necessary.
“The question in my mind, is to consider reversing that, given its genesis and the rationale for doing it in the first place -- what is the case for recombining the offshore leasing environmental review agency with the safety authority?” he said.
“I haven’t heard industry make that case,” said Beaudreau, who is now a partner in the Washington, D.C. office of Latham & Watkins. “The last thing in the world I would do electively is something like that.”
Asked whether industry may have learned lessons from the Deepwater Horizon spill and internally improved their safety measures, making government regulations unnecessary, Beaudreau cautioned that industry could become complacent with time. Further, the big players are not the only ones governed.
“The fact is, there is a wide range of operators in the Gulf of Mexico, and I was surprised that there are ‘Mom and Pops’ out there operating platforms.”
In another Trump administration move to jumpstart domestic fossil-fuel production, the Tax Cuts and Jobs Act of 2017 opened the Arctic National Wildlife Refuge in Alaska to drilling. The move was a major victory for local interests in a decades-long battle between those interests and environmentalists that Beaudreau witnessed firsthand.
Beaudreau’s approach as a bureaucrat was informed by his roots, having grown up in Alaska. His father worked on the petroleum-rich Alaska North Slope while building the Trans-Alaska Pipeline. Beaudreau noted that the state relies on revenue from oil royalties to fund major state social programs, which leads to ongoing tension between the local and national interests.
As a native Alaskan, he said striking an appropriate balance between those competing interests was always “top of mind.”
“Those local interests really are important,” Beaudreau said. “It is a mistake and it’s irresponsible, when you’re in government, to not make the effort to understand that dynamic and understand the impacts that decision-making has on local communities. That said, you have a broader responsibility. Those are American resources, they belong to all the people, so you’re making decisions on that basis too.”
Not all Obama-era Interior rules, regulations and programs are in danger of being reversed or scrapped. Beaudreau predicted that 2018 would be an “enormous” year for offshore wind in the U.S., as Zinke’s Interior appears to be completely supportive of the leasing program, he said.
Beaudreau stayed at Interior after his Deepwater Horizon work in part to help launch the offshore wind program at BOEM.
“I’m proud of a lot of the things we got done in the Obama administration, but right at the top of the list is offshore wind, which … we were starting from scratch,” he said. “The opportunity in government is pretty rare – it’s pretty rare in life, let alone government -- to try to stand up a new industry and a new vision, virtually from scratch.”