Spill commission co-chairmen testify before Senate, House panels

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Jan. 28 -- Leaders of two congressional committees said they looked forward to discussing the findings of US President Barack Obama’s offshore oil spill commission as its co-chairmen testified in back-to-back hearings on Jan. 26. House Democrats simultaneously reintroduced a revamped bill that they said reflected the commission’s recommendations.

“While there may be disagreement about where and how to do it, no one can doubt the need to continue to produce domestic oil and gas. However, much of our remaining reserves are offshore, and in deep water, and far below the ocean floor,” Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) said as he opened the panel’s morning hearing.

“The Deepwater Horizon tragedy has taught us that such development involves a highly complex interplay of technologies and human decisions that sometimes must be made quickly on the basis of uncertain and evolving information. State-of-the-art safety systems with sufficient margin for error and clear lines of communication, responsibility and authority are essential,” he said.

Lisa Murkowski (R-Alas.), the committee’s ranking minority member, noted that four other reports have been completed or are being prepared about the Apr. 20, 2010, Macondo well accident and subsequent massive crude oil spill into the Gulf of Mexico. They include a joint investigation by the US Departments of the Interior and Homeland Security; the National Academy of Engineering study, which is scheduled to be released in mid-March; a 30-day report from DOI’s Safety Oversight Board; and an internal report by BP PLC, the well’s operator, which was released this past fall.

“More specifically, we have to decisively recognize the risks and the rewards of offshore energy exploration,” Murkowski said. “There is simply no better way to take measure of those risks and rewards than by visiting the Gulf of Mexico and witnessing the balance between the many users of the ocean, and their respect for one another. In my experience, the fishing, tourism, and energy industries are perfectly capable of coexisting—just as they did for many decades before last year’s incident.”

‘Unsustainable addiction’
Committee member Maria Cantwell (D-Wash.) said she was pleased that the spill commission’s final recommendations included two main goals of legislation she previously introduced: third-party audits and certification for offshore oil and gas operations, and improving outdated oil spill cleanup technologies. “With the commission’s report and recommendations, we can get to work trying to prevent a similar tragedy from ever happening again,” she said. “This includes giving regulators the tools and resources they need to do their jobs effectively, although ultimately we need to wean America off our unsustainable addiction to fossil fuels.”

Later, House Natural Resources Committee Chairman Doc Hastings (R-Wash.) opened the hearing on that side of the Capitol with an observation that the commission’s report provided additional insight into the accident and spill which will be a factor into congressional discussions. “However, even with the commission’s report, we still don’t know precisely what caused the explosion or why the blowout preventer failed to work,” he said, adding that he hoped future reports from the US Coast Guard and Bureau of Ocean Energy Management, Regulation, and Enforcement’s joint investigation and the US Chemical Safety Board might provide some answers.

“The oil spill was a terrible tragedy, but it should not be used as an excuse to further reduce America’s access to our energy resources,” Hastings said. “Some in Congress view this spill as an opportunity to shut down offshore drilling. That is not a solution; that is giving up…. Republicans want to make offshore drilling the safest in the world. We believe in the need to make smart, effective reforms that are centered on improving safety, putting people back to work, and allowing responsible drilling to move forward. The right response to this spill is to focus on making drilling safe, not making it impossible.”

In their joint opening statement before both committees, the commission’s co-chairmen—former Florida Gov. and US Sen. Bob Graham and former US Environmental Protection Agency Administrator William K. Reilly—said the accident and spill’s central lesson was that a complete overhaul of both current industry practices and US government oversight of offshore oil and gas operations is required. Necessary transformative changes will require unbending commitments by industry and government to displace a culture of complacency, they maintained.

“Drilling in deepwater, however, does not have to be abandoned. It can be done safely,” they continued. “That is one of the central messages of the commission’s final report. [Its] recommendations are intended to do for the offshore oil and gas industry what new policies and practices have done for other high-risk industries after their disasters. The commission believes that the potential for such a transformation to ensure productive, safe, and responsible offshore drilling is significant, and provides reason for optimism even in the wake of a disaster.”

Beyond the US
The accident and spill’s significance affects more than US offshore oil and gas exploration, Graham and Reilly said. Cuba and Mexico also have expressed interest in deepwater drilling, they pointed out. It is in the best interests of the US for the three countries to agree on a common, rigorous set of standards; a system for regulatory oversight; and operator adherence to an effective safety culture, along with protocols to cooperate on a spill containment and response strategy, they said.

Graham and Reilly also noted that the Chukchi and Beaufort seas off Alaska’s north coast rank behind only the gulf in estimated offshore resources, but finding and producing these potentially important supplies will require the utmost care. They said that the commission recommended that DOI ensure that containment and response plans proposed by producers are adequate for each development stage and that underlying financial and technical capabilities have been demonstrated in the Arctic. It also suggested that the USCG and producers operating offshore in the Arctic carefully delineate their responsibilities and deploy their capabilities in case of a spill, and that the USCG get funding to establish better capabilities in the Arctic.

“While I support increased funding for research, I do not accept it as an excuse to cancel existing leases in the Arctic or to put off future lease sales indefinitely,” Murkowski said following the Senate Energy and Natural Resources Committee’s hearing. “The companies involved in exploration off Alaska’s northern coast are committed to the highest safety standards and have gone above and beyond to demonstrate their ability to respond to any situation.

“The commission’s report clearly states that the need for ongoing research in the Arctic should not be used as an excuse to permanently delay exploration,” she said. “Oil and gas will continue to be a vital part of our nation’s energy supply for decades to come and it is my honest belief that as much of that energy as possible should be safely produced here at home for the good of our economy, our security, and our environment.”

Ranking minority members from four other House committees in addition to Natural Resources introduced legislation which they said incorporated not only the spill commission’s recommendations but also proposals from bills they introduced last year. They included Edward J. Markey (D-Mass.) of Natural Resources, Henry A. Waxman (D-Calif.) of Energy and Commerce, Nick J. Rahall (D-W.Va.) of Transportation and Infrastructure, George Miller (D-Calif.) of Education and the Workforce, and Eddie Bernice Johnson (D-Tex.) of Science, Space, and Technology.

They said that provisions of their legislation include creating dedicated funding for agencies charged with regulating offshore oil and gas; establishing unlimited liability for companies in the event of a spill as a deterrent against risky practices; adding experts from the USCG and National Oceanic and Atmospheric Administration to the process of deciding where drilling could occur; creating dedicated funding for oil spill research and development; and requiring new standards for blowout preventers, well design, and cementing practices.

Contact Nick Snow at nicks@pennwell.com.

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