Busy Week Of Oil Investigations

Three congressional committees this week took up the BP Gulf of Mexico oil rig explosion that occurred on the evening of April 20. The blast killed 11 workers and has resulted in an unabated daily flow of at least 200,000 gal of heavy oil. More hearings are expected this week in what is likely to be a string of oversight panels and a volatile energy policy debate triggered by the huge oil spill.

At three hearings, Senate and House of Representatives members probed top officials of the three companies that ran the exploratory deep-water drilling operation: BP, Transocean, and Halliburton. Most glaring, at a hearing of the House Energy & Commerce subcommittee on oversight, members presented preliminary results of a staff examination that found operation and maintenance failures of the blowout preventer, a 450-ton device that sits on the ocean floor at the top of the wellhead. It is intended to be a last-ditch fail-safe mechanism to block an uncontrolled surge of gas and oil using a system of automatic valves, shears, and pistons to seal the well pipe.

“Our investigation is at its early stages,” subcommittee Chairman Rep. Bart Stupak (D-Mich.) noted, “but already we have uncovered at least four significant problems with the blowout preventer.”

Representatives of the three companies—Lamar McKay, president of BP America; Steven L. Newman, president of Transocean, which ran the Deepwater Horizon drilling rig; and Tim Probert, chief health, safety, and environment officer of Halliburton, which supported drilling operations—expressed condolences to the dead workers’ families and to the fishermen and others who depend on the Gulf’s beauty and bounty for their enjoyment and livelihoods. But they offered few insights into how the accident occurred, and mostly they blamed one another.

Halliburton and Transocean stressed that they were contractors to BP—the main operator—and as such, BP must bear final responsibility. Transocean’s Newman added that Halliburton also may have been responsible for the root cause of the explosion because it had just applied the first of two layers of cement to temporarily seal the exploratory well when it blew.

On the other hand, BP’s McKay pointed to Transocean’s role as the driller and its responsibility for the blowout preventer, which failed.

Concerning liability, McKay acknowledged that under U.S. law BP is responsible and will be held liable. He said the company will pay all “legitimate” claims, which are expected to be in the tens of billions of dollars.

Sen. Lisa Murkowski (R), a drilling supporter from oil-rich Alaska, chided the three for blaming one another and said, “I would suggest to all three of you that we are all in this together because this incident will have impact on the energy policy for this country, and if we can’t continue to operate and convince people that we can perform safely then not only will BP not be out there but the Transoceans won’t be out there to drill and the Halliburtons won’t be there to do the cementing. So we had better figure out how to make this happen.”

Also this week, Department of the Interior Secretary Ken Salazar announced an overhaul of Interior’s Minerals Management Service, which oversees offshore oil and gas drilling. MMS, Salazar said, would be split into two parts: one to issue drilling permits and collect oil industry royalties, which reached $13 billion last year, and the other to enforce offshore oil drilling and production safety regulations.

Ending the conflict of interest between enforcement and royalty collection was just a “first step,” Salazar said, and eventually, regulation of offshore drilling may be shifted to a separate part of the Interior Department.

In the meantime, in a New Orleans’ suburb, the Coast Guard and MMS held their first public hearings in their investigation of the accident and its causes. At the same time, Salazar announced that the National Academy of Engineering will be enlisted to conduct an independent study of the root causes of the accident.