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Oil spill panel blames lax oversight, poor safety standards

WASHINGTON — Lulled by success, the U.S. wasn't prepared for a catastrophe the size of the Deepwater Horizon oil spill, and it needs additional government regulation and tougher industry self-policing to improve the safety of deepwater drilling, the presidential commission investigating the Gulf of Mexico disaster found.

The commission, which issued its final report Tuesday, blamed government regulators and the oil and gas industry for failing to address the growing risks of deepwater drilling adequately over the past two decades. That complacency led to the explosion April 20 that killed 11 people and allowed an estimated 4.1 million barrels of oil to gush into the Gulf over three months, the commission found.

It strongly condemned the U.S. for lax oversight of offshore drilling at a time when the nation will continue to draw increasing amounts of its domestic oil and gas from deeper and more distant waters.

The country was "lulled into a sense of inevitable success, an illusion which masked the dramatic increase in risk which accompanied the deepwater move," said one of the commission's co-chairs, Bob Graham, a Democratic former Florida governor and senator. "On April 20th, after a long period of rolling the dice, our luck ran out."

Graham said that although the commission found "significant errors and misjudgments" by the three companies involved in the drilling rig operation — BP, Halliburton and Transocean — the disaster wasn't "the product of a single rogue company."

"We believe they unveil systemic failures within the oil and gas industry and within the regulation by the federal government of that industry," he said.

The commission also noted that 21 years after the Exxon Valdez oil spill in Alaska, the same "blunt response" technologies were used to limit the Gulf spill, including boom, dispersants and skimmers. The response technology must improve, the commission said, as should the weaknesses revealed in the local, state and federal coordination of cleanup resources.

The 380-page report calls for stricter government oversight, tougher requirements for each drilling rig based on the specifics of each case, more scientific research and better oil spill plans before drilling in deep water and other little-explored areas, such as the Arctic. The recommendations include:

_ Congress should create a safety agency in the Department of Interior to oversee offshore drilling. The industry, rather than taxpayers, should pay for the regulation.

_ At the same time, however, the president should seek “significantly increased funding” for the agencies that oversee oil spill responses, including the Coast Guard and the National Oceanic and Atmospheric Administration.

_ The oil and gas industry should establish a safety institute _ similar to those created by other high-risk industries such as the nuclear power and chemical industries _ to enforce safety standards.

_ Oil and gas companies should be required to show that they've evaluated all the risks associated with each specific well.

_ Government environmental review should be led by a scientist.

The American Petroleum Institute, the lobby group for the industry, said Tuesday that it already had started to create an industry safety program for deepwater drilling. The institute approved of parts of the report, including its call for more federal spending on drilling oversight. The industry group criticized the report, however, because it “casts doubt on an entire industry based on its study of a single incident.”

Marilyn Heiman, the director of the U.S. Arctic Program at the Pew Environment Group, said Congress and the president should heed the commission’s recommendations.

“The rules governing how we drill for oil are dangerously outdated, and oversight has been lax,” she said. “We have to have the best standards in the world.”

Interior Secretary Ken Salazar said Tuesday that the federal agency he oversees already had implemented some of the findings in the report and would use it as a blueprint "to inform future actions to strengthen safety and oversight."

Among them: a reorganization of the troubled Minerals Management Service, which has since been renamed the Bureau of Ocean Energy Management, Regulation and Enforcement, and new leadership for it.

Its director, Michael Bromwich, on Tuesday acknowledged the weaknesses within his agency, saying they were "the product of decades of neglect, lack of sufficient focus on the agency's important regulatory mission and an inexcusable shortfall in the resources available to do the job." He said the commission's recommendations were "consistent with the internal reforms that we are implementing and will continue to implement."

Environmental groups, however, said the U.S. shouldn’t be drilling in deep water or in the Arctic until the government and industry were better prepared to reduce the risks and stop environmental damage if another accident occurred.

“It should be a straightforward equation: An oil industry involved in risky, potentially disastrous operations must undergo thorough environmental review and accept better oversight,” Derb Carter, a senior attorney at the Southern Environmental Law Center, said in a statement. “Without the ability to prevent and stop another disaster, we shouldn’t be drilling in deep water.”

The commission unanimously approved the report released Tuesday. While the commissioners agreed that Congress should “significantly increase” the $75 million cap on liability for oil spills, they failed to come to a consensus on how much.

The commissioners were united in recommending that as much money as possible from the fines expected to be levied against BP and other companies involved in the gushing well be devoted to restoring the Gulf's ecosystem.

Congress will have to provide the funding and authority for much of what the commission recommended. The House of Representatives passed a bill that contained similar safety standards and an increase in liability limits in July. The measure passed 209-193 at a time when Democrats were in the majority in the House. It failed to pass in the Senate.

Both Graham and his co-chairman, former EPA Administrator William Reilly, said that many of their recommendations could be implemented without Congress.

Politics has underscored the disaster from the beginning, with partisan hearings on Capitol Hill last summer and sharp splits in Congress over whether the Obama administration's moratorium on deepwater drilling was appropriate. One early indication suggested that the commission’s proposals might not have smooth sailing in the anti-regulatory climate in the new Republican-controlled House.

Rep. Fred Upton, R-Mich., the new chairman of the House Energy and Commerce Committee, said the nonpartisan commission’s findings would be “among those considered as we work to prevent this type of disaster from ever being repeated.” He criticized the report's conclusion that the errors that led to the blowout reflected industrywide problems.

“Rather than clearly identifying the root cause of this unprecedented disaster, the commission’s report is limited to general assertions about the enforcement agencies and industry as a whole,” Upton said in a statement. He also reiterated his support for expanded drilling.

(Elizabeth Bluemink of the Anchorage Daily News contributed to this article.)


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