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Another oil spill disaster likely without reforms, says commission

January 11, 2011
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The Gulf oil disaster was forseeable and preventable, and similar large-scale catastrophes are likely in the future unless serious reforms are undertaken, according to a report just released by the Oil Spill Commission entitled, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling.

The Presidentially-appointed commission blamed the disaster on errors and misjudgments by three major oil drilling companies -- BP, Halliburton, and Transocean -- as well as ineffective government regulation that failed to keep pace with technological advancements in offshore drilling.

Systemic reforms needed

"Our investigation shows that a series of specific and preventable human and engineering failures were the immediate causes of the disaster," said Commission Co- Chair William K. Reilly. "But, in fact, this disaster was almost the inevitable result of years of industry and government complacency and lack of attention to safety. This was indisputably the case with BP, Transocean, and Halliburton, as well as the government agency charged with regulating offshore drilling—the former Minerals Management Service. As drilling pushes into ever deeper and riskier waters where more of America’s oil lies, only systemic reforms of both government and industry will prevent a similar, future disaster."

Commission Co-Chair Bob Graham warned that if specific actions are not taken by Congress, the Administration and the oil industry, the probability of another failure will be "dramatically greater." He added: "The people of the Gulf who have suffered so much deserve to know what their government and the industry are going to do.""

Causes of the blowout

The commission's investigation found that the Macondo well blowout was the result of human error, engineering mistakes, and management's failure to
  • adequately evaluate risk
  • recognize and respond to early warning signals that signalled trouble, and
  • respond appropriately to the blowout once it began, among other factors.
The report also criticized the government's role in the event, noting that the oversight agency had two conflicting missions; to promote the rapid expansion of offshore leasing and drilling and to ensure its safety.

"Regulation failed to keep pace with the dramatic transformation of the offshore drilling industry and the move to deepwater drilling," according to the Commission. "Neither inspectors on the front lines nor senior Interior Department officials in charge of the Minerals Management Service (MMS) had the experience or training to oversee deepwater offshore drilling. The Department of the Interior lacked sufficient in-house expertise to enforce existing regulations, and was unable to impose more stringent safety regulations due in large part to industry resistance."

Lack of funding is also cited as a contributory factor in the government's failure to oversee the drilling industry: "Over the past twenty years, the MMS budget for leasing, environmental protection, and regulatory oversight decreased or remained relatively static while deepwater drilling in the Gulf of Mexico expanded dramatically."

Companies lied about response capabilities

Even though a massive deepwater oil spill was forseeable, the Commission said neither the federal government nor the oil industry were prepared for a deepwater well-containment effort at the time of the Macondo well blowout on April 20, 2010.

"Companies did not possess the response capabilities they claimed," according to the report. "Since the Exxon Valdez oil spill in 1989, neither industry nor the government has made significant investments in spill-response research and development, so the clean-up technology used following the Deepwater Horizon spill was largely unchanged.

Key recommendations

The report contains an extensive list of recommendations that include:
  • The creation of an independent safety agency within the Department of the Interior to oversee all aspects of offshore drilling safety
  • Making the offshore energy industry pays the costs of its regulatory oversight the way that other regulated industries, such as the telecommunications industry, pay the costs of their oversight by government.
  • Toughening the baseline of "prescriptive safety regulations" applicable to offshore drilling to address the increased challenges presented by drilling in deeper waters and less well known geologic areas, and by the changing nature of the oil and gas industry.
  • Enhancing environmental protection by creating a distinct environmental science office within Interior headed by a chief scientist with well-specified responsibilities regarding environmental review and protection.
  • Making drilling operators pay for their mistakes. "The current $75 million cap on liability for offshore facility accidents is totally inadequate and places the economic risk on the backs of the victims and the taxpayers."


A "culture of safety" needed in oil industry

The commission also stressed that the oil and gas industry must adopt a culture of safety. "Much as the aviation, chemical, and nuclear power industries have done in response to disasters, the oil and gas industry must move towards developing a notion of safety as a collective responsibility, with a focused commitment to continuous improvement and a zero failure rate."

Increased funding for the Interior, the Coast Guard and the NOAA -- key regulatory agencies that oversee oil spill response and planning -- was another recommendation. In addition, the Interior, the Coast Guard, and the Department of Energy and its national laboratories should develop in-house expertise to effectively oversee containment operations in the immediate aftermath of a well blowout and to accurately estimate flow rates following a blowout.

"These reforms are a national priority, and must be treated as such by the Administration, the Congress, and the industry," said Reilly.

"This is not the time to be timid or incremental," said Graham. "Now is the time to be bold and take decisive action to dramatically reduce the likelihood of these inherently risky activities conducted on property that belongs to the people of the United States, possibly resulting in another Deepwater Horizon disaster."

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