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Panel Raps Feds, Industry For Spill

Regulation: Investigation blames lax oversight, poor industry practices for disaster

by Jeff Johnson
January 12, 2011 | APPEARED IN VOLUME 89, ISSUE 3

Credit: UPI/Roger L. Wollenberg/NEWSCOM
Reilly (left) and Graham presented the findings of their investigation of the April Gulf oil spill.
Credit: UPI/Roger L. Wollenberg/NEWSCOM
Reilly (left) and Graham presented the findings of their investigation of the April Gulf oil spill.

Last April's deadly Gulf of Mexico oil rig explosion and massive oil spill were due equally to industry mistakes and inadequate government oversight, says a 368-page report released Jan. 10 by the presidentially appointed National Commission on the BP Deepwater Horizon Oil Spill.

The seven-member panel's report blasted the oil industry and the Department of Interior (DOI), saying its investigation's "central lesson is that no less than an overhauling of both current industry practices and government oversight is now required."

The commission found significant mistakes and misjudgment by the well owner BP, the drilling rig operator Transocean, and the drilling technical consultant Halliburton, and blamed them all for the accident. The specific flaws in drilling operations and decisions will be explained in a separate soon-to-be-issued report, the commission said.

Commission cochairmen Bob Graham, a former Florida senator, and William K. Reilly, former EPA head, underscored that the accident revealed problems beyond a single rogue company and showed systemic failures of the oil and gas industry and federal regulation.           

Over the past 20 years, Graham said the oil industry has drilled deeper and riskier wells in the Gulf of Mexico, and industry and regulators were "lulled into a sense of inevitable success." This "illusion" masked the dramatic increase in risk that accompanied deep water drilling, he said, adding that after a long period of rolling the dice, 'our luck ran out.

"Government," he continued, "let it happen." Among its recommendations, the commission called for a new regulatory structure and safety agency to oversee offshore drilling and production. Although housed in the DOI, the new agency would be independent. It would be led by an administrator with science and management credentials, serving a fixed term and thus protected and "insulated from the inevitable political influences" that are sure to occur with key decisions, Graham noted.

When quizzed about recent DOI reforms, Reilly applauded them but said they were "not enough."

Reilly pointed to fundamental conflicts of interest for the department because of its dual role of collecting huge oil industry royalty payments while regulating the payer. The new agency, he said, would be insulated by a single safety focus as well as independence.

The report also called for an expanded role for scientists in overseeing offshore activities, permit decisions, and rig operations, with Graham noting that science had been "shut out" of past Gulf decisions.

Also the commission recommended a jump in funding for enforcement, oversight, and Gulf environmental restoration and called for creation of a new industry-funded organization to develop industry-wide standards of excellence.

Gulf environmental groups, fishing organizations, and citizens groups backed the report but not so for industry groups. The American Petroleum Institute, for instance, said the commission failed to recognize recent industry and government reforms and was judging the entire industry based on a single accident. Three congressional hearing were announced as the report was released.



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