Editorial: Volatile deepwater context

June 1, 2010
The offshore oil and gas industry must look past facile headlines generated by US President Barack Obama's June 8 television interview with MSNBC's Matt Lauer and heed deeper political sentiments on painful display there.

The offshore oil and gas industry must look past facile headlines generated by US President Barack Obama's June 8 television interview with MSNBC's Matt Lauer and heed deeper political sentiments on painful display there. Heated by the Gulf of Mexico oil spill from the Apr. 20 Macondo blowout, those sentiments provide volatile context for future deepwater regulation.

Tough talk riveted news reports about the interview and provided an unfortunate distraction from substantial messages. Second-guessed from all directions about his response to the disaster, the president probably just wanted to show his sword remains sharp when he used widely quoted and remarkably nonpresidential language to describe where he might apply the figurative foot of persuasion. The hard-pressing Lauer had put the words into his mouth. Saying he was relaying the concern of critics, the newsman asserted, "This is not the time for cool, calm, and collected. This is the time to spend more time in the gulf and—I never thought I'd say this to a president, but, kick some butt."

'Want him out?'

Also attracting attention was Obama's statement that he would have sacked BP Chief Executive Tony Hayward for suggesting the spill's environmental effects might be modest and for wishing out loud that he had his life back. Lauer had asked why the president wasn't talking with Hayward. "Here we've got the CEO of a company that's responsible for the worst environmental disaster in US history," Lauer said. "I'm just curious why you wouldn't pick up the phone and in some ways give him a piece of your mind." Then he introduced a recitation of Hayward's verbal indiscretions by saying, "To solve the problem you've got to have a reliable partner," before asking, "Would you want him out?" Obama could hardly say no.

In fact, Lauer seemed so eager to contrive villainy that Obama deserves credit for wedging into the record any comments at all genuinely relevant to policy. It's those observations that deserve the producing industry's attention.

The important sequence began with Lauer challenging federal oversight of operations in water depths at which spill response has been, until now, untested. It's a question large on the collective mind of America. Obama's response should make offshore professionals wince.

"We obviously cannot take the word of oil companies when they say they've got a bunch of redundancy and back-up plans when something like this happens and it turns out they have no idea what they're doing," he said. Later he added, "What we don't have right now is an assurance that in these incredible depths—a mile down and then they're drilling another 3 miles down to get the oil—that we can actually handle a crisis like this."

Fateful questions flare from these remarks. Do oil companies really not know what they're doing in deep water? Put another way, does BP represent the whole industry drilling for and producing hydrocarbons in deep water? Did the company do everything right and still encounter problems with no ready solutions? Or did BP make mistakes other operators would have avoided and lack crisis remedies others possess?

More remains to be learned about what happened aboard and below the Transocean Deepwater Horizon on Apr. 20. It's not certain that the accident resulted chiefly from the "human error" and "corner-cutting in terms of safety" that Obama suggested might be part of the final report.

Not just BP

But Obama ascribed deceit and ineptitude to "oil companies"—to the industry in general, not just to BP. To him, and no doubt to most Americans, questions about the future of deepwater work apply to the whole industry and not just BP.

The industry will have to provide the assurance now missing. Companies will have to show preemptively that they can work safely in deep water and keep accidents from becoming catastrophic. If that comes to mean showing that BP erred where other operators never would, so be it. Absent such assurance, access by operators to deepwater oil and gas resources off the US will be restricted at best—and should be.

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