Gulf Commission Says Systemic Changes Needed in Offshore Drilling
Posted January 11, 2011
The Deepwater Horizon exploded nine months ago, killing 11 men and sending approximately 170 million gallons of oil into one of America’s most productive fishing grounds.
Today, the National Oil Spill Commission rendered its official verdict of what caused that horrific disaster: a dangerous combination of failed industry management and failed government oversight.
The commission’s report offers a good analysis of what led to these failures and sound recommendations for how we can prevent them in the future. The oil industry, the administration, and Congress should move swiftly to implement these recommendations.
The report relates in detail the many mistakes and bad decisions that BP, Halliburton, and Transocean made before the blowout. But it also concludes that the entire oil and gas industry lacks a sufficient culture of safety and risk assessment.
Likewise, the report found that the Minerals Management Service (since renamed) relied too heavily on the industry to police itself, but it also confirms that the entire structure and funding of government oversight for offshore drilling are woefully inadequate.
We are not talking here about one rogue company or one weak agency. We’re talking about a systemic failure to put safety first.
The commission report outlines how America can do a better job of protecting our workers, coastal communities, and marine riches. It starts with requiring the industry to meet higher safety standards and strengthening the government’s ability to set and enforce offshore drilling rules.
Oil companies are already arguing that there’s no serious problem and trying to scare Americans into thinking that tougher safety standards will cost us money at the pump. And some lawmakers are saying that public health and environmental safeguards are too troublesome for business.
But the BP oil disaster makes it vividly clear what happens when the government says to companies: Go ahead. We trust you to keep safety in mind while you pursue your own profits.
The commission report concluded that “whether purposeful or not, many of the decisions that BP, Halliburton, and Transocean made that increased the risk of the Macondo blowout clearly saved those companies significant time (and money).”
But it wasn’t just these three companies that cavalierly assumed that nothing could go wrong and appeared to put profits before safety. Over the past three years, the industry generated $289 billion in profits. It spent $39 billion of that on developing new wells, but it only invested about $20 million per year on researching safety improvements, accident prevention, and spill response—that’s one-tenth of one percent of industry profits.
It’s not surprising that businesses focus on their own interests. But it becomes problematic when no one represents the public’s interest. As individual citizens, we have little ability or capacity to say how BP should ensure the safety of its drilling operations. We need government agencies to speak for us.
Yet over the past three decades, government has not had the resources or the authority to provide meaningful oversight of increasingly complex deepwater drilling operations. In the Gulf, this meant that the oil industry got to call too many of the shots, and the American people—who actually own the fossil fuel deposits and marine resources there—were not sufficiently protected.
This has to change. In the wake of the BP oil disaster—and the real estate and banking meltdowns—Americans realize we need a line of defense between our families and those companies that think only of their profit margins and assume they will make no mistakes. A strong federal agency, backed by Congress, can protect our interests when the BPs of the world do not.
The commission report includes strong recommendations for how to do this. NRDC especially welcomes the call to establish an independent safety and environment office insulated from political pressure, and the proposal to expand the role of the National Oceanic and Atmospheric Administration to ensure decisions about offshore drilling are based on sound science. Indeed, we think NOAA, as the primary agency with the duty to understand and protect the oceans, should have an even larger role than the commission suggests.
We also welcome the commission’s call to raise liability caps, although we recommend removing caps entirely so that polluters, not the taxpayers or the victims, have to pick up the full tab of the damaging results from catastrophic spills.
Now the question is: who will put the commission’s recommendations into action? The Interior Department has begun to implement needed reforms, but the commission has recommended vital additional steps to ensure that safety and environmental protection guide federal activities.
Congress, meanwhile, has done nothing to safeguard Americans from another oil spill. The House passed a good offshore drilling bill last summer, and Senate committees approved helpful legislation, but in the end, the Senate failed to act. This paralysis has to end. Only Congress has the power to make certain changes—like removing the liability cap—and only Congress can enact laws that clearly set the basic ground rules to guide oil and gas drilling for years to come.
Finally, Congress and the administration must join forces to help cut America’s oil use. Right now, our oil dependence forces us to take risks we ought to be able to avoid. We have the technology to reduce our oil use by at least 50 percent in the next few decades. The sober assessments in the commission report—and the terrible consequences of the BP disaster—should inspire us to put that technology to use while pushing for further innovation.