To ensure the safety of offshore oil and gas operations, a presidentially appointed 2010 Gulf oil- spill commission has called for a new oversight and enforcement agency at the Dept. of the Interior and offered a long list of other recommendations for government and industry. Agencies and the private sector could adopt some of the changes on their own. Other steps would require new federal legislation.

Photo: Courtesy of U.S. Coast Guard

In a comprehensive, 398-page report released on Jan. 11, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling issued 15 recommendations. Leading the list is the call for the new agency, which would be completely separate from an Interior division that would oversee U.S. government leasing of offshore tracts.

Former U.S. Sen. Bob Graham, a commission co-chairman, said the April 20 spill, which killed 11 workers, “did not have to happen. It was foreseeable and preventable.” The Florida Democrat added, “How could this happen? Part of the answer is that our government let it happen. Our regulators were consistently outmatched” and lacked the expertise.

He said there was an internal conflict in the Interior Dept.’s former Minerals Management Service (MMS) between safe operations and a desire for revenue from oil and gas operations, which “consistently led to revenue trumping safety as a priority in the department.”

After the spill, Interior Secretary Ken Salazar reorganized MMS into the new Bureau of Ocean Energy Management and Regulation and Enforcement (BOEMRE). But Graham and commission Co-Chairman William Reilly, Environmental Protection Agency chief in the George H.W. Bush Administration, said the separation does not go far enough because all BOEMRE divisions still report to the same undersecretary.

The panel’s envisioned new division would be “walled off” and its chief would be appointed to a five- or six-year term as a protection from political pressures. The Interior Dept. had not responded to calls for comment by press time.

The commission recommends the Interior Dept. adopt a risk-based management approach in which each well and rig would be assessed individually. The panel calls for a new, industry-led safety organization, similar to the Institute of Nuclear Power Operations created after the 1979 Three Mile Island accident.

Additionally, the commission says Congress should dedicate 80% of the funds from spill-related Clean Water Act penalties to long-term restoration of the Gulf of Mexico.

Graham and Reilly said the culture of safety at oil companies and the government must improve. Reilly said the U.S. has five oil-and-gas fatalities per 100 million hours worked, compared with one for the North Sea and elsewhere in Europe. He added, “I think it points to a systemwide problem.” Graham said, “If dramatic steps are not taken, I am afraid that another failure [will occur].”

Graham and Reilly said the Obama Administration has the authority to act on many of the recommendations. For steps that need congressional action—such as a hike in the liability cap—Graham believes the new, more Republican Congress, which has expressed anti-regulatory views, will see oil-spill regulations in a different light. “This is not a typical example of government regulating private enterprise,” Graham said. “This is government regulating land that it owns.”

The American Petroleum Institute and the National Ocean Industries Association said they were examining the report but said they were opposed to the commission’s conclusion that the problems were industrywide.

Halliburton, which did the final cementing job on the well, reiterated an earlier response opposing the panel’s findings, saying, “In general, the National Commission selectively omitted information we provided to them in response to their numerous inquiries.”

BP, which held the lease to the well, and Transocean, which owned the Deepwater Horizon rig, did not issue comments by press time.