Technological marvels have a way of becoming suddenly nightmarish. Take nuclear power plants, for instance. Extraordinary testimonials to engineering prowess, they also carry extraordinary risks, as the recent catastrophe in Japan attests.
Things are no different in the oil and gas industry. For years, the Deepwater Horizon drilling rig in the Gulf of Mexico was hailed as a technological wonder. Owned and operated by Transocean, the world’s largest offshore drilling company, it had been used in September 2009 to drill the deepest offshore well in history at a vertical depth of over 35,000 feet, in over 4,000 feet of water.
And then, in one fell blast, it was anything but wonderful. On April 20, 2010, the rig exploded as it was being used to drill a well for the multinational British Petroleum (BP), killing 11 crewmen, creating a fireball that was visible 35 miles away, and leaving oil spewing into the Gulf at a rate of over 50,000 barrels a day.
How do you seal a gushing oil well that’s beneath almost a mile of water? The answer came quickly: not easily. By the time the Deepwater Horizon well had been sealed three months later, five million barrels of oil had seeped into the Gulf of Mexico, giving BP and its subcontractors the dubious honor of having co-created the largest offshore oil spill in United States history.
On May 22 of last year, President Obama established the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, with the explicit mandate to “examine the relevant facts and circumstances concerning the root causes of the Deepwater Horizon oil disaster and [to] develop options for guarding against, and mitigating the impact of, oil spills associated with offshore drilling.”
About seven months later, in January 2011, the Commission published its report.
Frances Beinecke, president of National Resources Defense Council, one of the country’s largest and most powerful environmental groups, was one of the Commission’s seven members. We caught up with her recently to discuss the Commission’s findings. On April 7, Beinecke will give the annaul Ned Ames Honorary Lecture at the Cary Institute in Millbrook at 7pm. The title of her talk is “Lessons Learned (or Not) from the BP Oil Spill.” www.ecostudies.org
. Over the years commissions have earned a reputation as a way for governments to pretend they’re actually doing something. Was that the case here? How happy are you with the findings?
I’m genuinely proud of the work we did. We had a strong, diverse team. This was the shortest turnaround time of any presidential commission in history. We delivered the report this past January, on time, and under budget.
Our mandate was to investigate what occurred and to recommend ways to avoid having it happen in the future. We looked as deeply as we could into what occurred.
There were practical limitations. For instance, we didn’t have access to the Deepwater Horizon blowout preventer, which wasn’t pulled from the Gulf until September. We were also working on a short timeline. Despite these constraints, I believe our analysis was comprehensive and accurate.
What were your key findings?
The blowout at Deepwater Horizon was not the result of a single human error. It came about due to a whole host of decisions by a series of different players, including BP and their contractors Halliburton and Transocean. The disaster wasn’t a fluke. It resulted from a systemic problem in the oil and gas industry. We found a shocking lack of standards on the part of the oil and gas industry with regard to safety and risk assessment, along with a corresponding lack of vigilance.
The risk we identified isn’t limited to US waters or the Gulf of Mexico. BP will be going offshore in the Arctic and off the coasts of Russia and India. Halliburton and Transocean are employed by companies operating all over the world. This is a global problem. What explains the lack of vigilance?
Complacency has a lot to do with it. The last huge oil spill was 20 years ago—the Exxon Valdez spill in Alaska. What happens is that there’s high vigilance for three to five years, then complacency takes over. President Obama has used the phrase “shock and trance.” It fairly describes the pattern here—a surge of effort followed by inattention.
Ongoing vigilance is critically important. We tried to shape our recommendations so that this kind of shock-and-trance complacency won’t ever happen again. What were your key recommendations?
We made recommendations in three areas: administrative remedies under existing authority, changes that require Congressional action, and changes on the part of industry.
Many of our administrative recommendations have already been implemented. For instance, the Minerals Management Service in the Department of Interior [DoI] has historically been responsible for both collecting revenues from offshore leasing and for conducting regulatory oversight. There’s a conflict of interest here. Secretary of the Interior Salazar has separated out these functions.
Recommendations that require Congressional action including granting more authority to departments and agencies like DoI and the National Oceanic and Atmospheric Administration, increasing the $75 million liability cap on oil and gas companies, and redirecting 80 percent of Clean Water Act civil and criminal penalties to long-term restoration of the Gulf of Mexico. Not surprisingly, Congress hasn’t acted yet.
As for our recommendations for industry, we looked at what other high-risk industries do. The nuclear and chemical industries created an independent safety institute. They hold themselves accountable internally. The oil and gas industry hasn’t done this yet. An independent safety institute can make a huge difference, especially when combined with more governmental oversight.
The Department of Interior currently doesn’t have enough resources to do an adequate job of regulation. The budget of the Minerals and Mining Service is $200 million. That’s only twice the size of my organization, the NRDC, yet it’s managing the program—oil and gas leases—that generates more income for the federal government than anything else besides taxes!
We need to increase DoI’s regulatory capacity. One way to do this would be to have Congress authorize more money. Alternatively—and this is one of our recommendations—the oil and gas industry could pay for government’s cost of regulation. This is already the case with the nuclear energy and communication industries. Their fees underwrite the Nuclear Regulatory Commission and Federal Communications Commission, respectively. What’s the industry response been like?
It hasn’t been dismissive of the recommendations, and while this may not sound like much, it’s a positive development. They usually come out loaded for bear. The truth is, they’re vulnerable right now. There are five million barrels of oil in the Gulf.
The American Petroleum Institute [API] is seriously considering our recommendation that they set up an independent safety institute. We’ve recommended that it be separate from API. They’re considering this, too, but at this point they’re less receptive to having it be separate from API than they are to the general concept of having a safety institute.
As a practical matter, the oil and gas industry should be the strongest proponents of getting these reforms in place. The industry has been screaming bloody murder because they haven’t been able to get new leases since the Deepwater Horizon accident. The industry keeps saying it wants to “get back to work.” They could expedite this by championing our recommendations so new leasing permits can be processed. Are there any villains in this drama?
Three companies—BP, Halliburton, and Transocean—were participants in the Deepwater Horizon accident. The tragedy happened on their watch.
But there’s another level to this. Why are we drilling at 10,000 feet? Because of our addiction to oil. Until we shift that, ecosystems everywhere will be at risk. In this sense, we’re all complicit. What are the odds of a disaster like Deepwater Horizon happening again?
With greater governmental oversight and greater industry accountability, you can reduce risk, but you can never reduce it to zero.
Our focus needs to be not only on minimizing the risk of a spill, but also on minimizing the impact if one does occur. In the case of Deepwater Horizon, the industry was totally unprepared to contain the leak once it occurred. A total new regulatory approach is being put into place. Now, for a company to obtain a lease, it must demonstrate that it has the technical and operational capacity to contain a spill. If the NRDC had been hired to do the review, would the recommendations have come out differently?
Our missions are different, so the recommendations would have come out differently. Our focus is on environmental protection. The Commission’s mandate was to find out what happened and make sure it won’t happen again.
That said, I’m proud of the environmental recommendations the Commission made. We also placed a strong emphasis on the need to have science play a larger role in underpinning the decision process. To what extent did climate change play a role in your deliberations?
We weren’t specifically charged with addressing climate change. It was on our minds, though. If you look at a city like New Orleans and then at the projected numbers for sea-level rise, you have to think: This city will disappear.
Climate change is the context this all plays out in. We need an energy pathway that reduces energy missions 80 percent by 2050. We’re nowhere close to it. It’s the evening. You’re home ranting to your husband about your latest frustration or disappointment. What are you most likely to be ranting about?
Most likely, our overall energy direction. We can figure out how to make offshore drilling safer, but even if we do that, we need an energy pathway that transforms the consumption patterns of people in the United States and around the world. We need real leadership to get there and we just don’t have it. What silver linings, if any, do you see?
The Gulf is an amazing place. Both environmentally and culturally, it’s an extraordinarily rich and productive environment. Our highest seafood take comes from the Gulf. Twenty-three percent of domestic oil production comes from the Gulf. All the resources of the Midwest come down the Mississippi. Hopefully, the Deepwater Horizon disaster brought the value of the Gulf to the attention of lots of people.
It’s amazingly resilient, too. When you go down there, what you see is incredible. After hurricanes and oil spills, people bounce back, over and over again. And the ecosystem recovers, too. Despite the ongoing litany of abuses that occurs, it remains a phenomenally productive ecosystem. It gives you hope that Mother Nature can survive our abuses.
If the funds can be made available to skillfully manage the Gulf’s resources, its extraordinary value can be maintained. In closing, are there any other points you’d like to make?
The Gulf of Mexico is a public resource. The marine environment doesn’t belong to industry, it belongs to us. The oil beneath the water doesn’t belong to industry, it belongs to us. We, not they, have the right to set the rules of the road.
The only reason industry is out there is to provide a public benefit. If they’re not serving the public, they don’t have a right to be there. Carl Frankel has been writing about sustainability-related issues for over two decades.