UpdateUS panel says offshore oil errors systemic, more rules likely

11 January 2011 21:03  [Source: ICIS news]

(adds updates throughout)

WASHINGTON (ICIS)--The US presidential commission on the BP Gulf of Mexico oil rig disaster emphasised on Tuesday that the accident showed a systemic failure by the offshore energy sector, adding that broader rules to remedy those shortcomings likely will get approved by Congress.

In delivering the commission’s nearly 400-page report on the April 2010 accident that sank the BP Deepwater Horizon and triggered the worst-ever US Gulf oil spill, the panel’s two leaders insisted that the entire offshore industry was in large measure responsible for the accident, not just BP and subcontractors Halliburton and Transocean.

Bob Graham, former governor of Florida and an 18-year veteran of the US Senate, charged at a press conference that “on April 20 last year, after a long period of rolling the dice on offshore drilling safety, our luck ran out”.

Along with William Reilly, who was head of the US Environmental Protection Agency (EPA) under President George H W Bush in the late 1980s, Graham is co-chairman of the BP spill commission established by President Barack Obama in May last year.

“It was a significant error of management,” Graham said of the Deepwater Horizon accident. “But it was not just the fault of one company, rather it was the result of a systemic failure in the oil and gas industry.”

Reilly said that while the proximate cause of the accident was actions or inaction by BP and its subcontractors, the disaster broadly speaking was the result of “inexplicable decisions amid a cult of complacency on the part of both government and the industry”.

“The solution,” he said, “must be industry wide.”

After the commission report was issued, the American Petroleum Institute (API) said that the panel had unfairly cast doubt on an entire industry based on its study of a single incident.

Reilly noted that among data gathered by the commission and its staff was the rate of fatal accidents in US offshore drilling compared with similar operations in other countries.

“In the US, there are five fatalities among offshore drilling workers for every 100m hours of operation,” he said. “In the North Sea in the UK, the number of fatalities for every 100m hours is one.”

“We do know that this is a systemic problem,” Reilly said.

The commission report recommended a broad range of increased regulatory oversight of offshore drilling by federal, state and local agencies and citizen groups, more detailed and site-specific environmental reviews of proposed development projects, a mandate for at-ready response equipment and pre-tested spill remediation technologies, and higher fees and financial liability standards for drilling companies.

Asked whether the commission’s members believed that those much broader regulatory requirements would get approval in the new, anti-regulation Congress, Graham said that he thought the US House and Senate would be more receptive than many might think.

“I believe this issue and the BP accident have left a searing impact on the consciousness of all Americans, so much so that it will override the preferences among some in Congress for less government intrusion and regulation,” Graham said.

“This is not a matter of government regulating a private business but rather the government regulating the use of our public lands,” Graham added.

“Furthermore, we think that a substantial amount of our recommendations can be implemented by the administration without Congress,” he said.

Additional reporting by Ben DuBose in Houston

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