Imagine this: The US government comes to its senses, allows drilling to resume in deep water of the Outer Continental Shelf, and it happens again. Another well blows out under thousands of feet of water, killing people on the rig and spewing oil for months.
Unimaginable? Think again. A majority of Americans can imagine a recurrence of the horror they've spent the summer watching in the Gulf of Mexico. If anything, most of them probably expect it. That's the fundamental political problem the producing industry must overcome. Fast.
Without question, the administration of President Barack Obama overreacted when it halted drilling in more than 500 ft of water in the gulf and off Alaska in response to the Apr. 20 Macondo disaster. Two court rulings have said as much. Without question, the administration compounded the mistake by reinstituting the drilling hiatus with cosmetic changes designed to clear legal hurdles.
But, also without question, this administration will not allow drilling to resume until it's certain there can be no repeat of the disaster. No administration would. The political risk is intolerable. The drilling and producing industry needs to understand this bedrock reality.
Costs of the drilling disruption are huge. Deepwater rigs are leaving the gulf. Rig workers face layoffs. Service and supply companies, many of them based in coastal communities ravaged by the spill's evisceration of tourism and fishing, are losing business. US production of oil and gas is suffering—in the case of oil by 31,000 b/d in the fourth quarter of this year and by 82,000 b/d next year, according to estimates by the Energy Information Administration. Production deficits will lower incomes for producers and workers and royalties and taxes for governments while raising the need for oil from abroad. Worse, uncertainty about regulation will mean investment not made in future US oil and gas supply.
Industry groups are making all these arguments in their opposition to the drilling ban. They're making them clearly and forcefully. The problem is that these arguments aren't enough.
As awareness grows of the moratorium's costs, so, according to Interior Sec. Ken Salazar, does belief that the industry can't work safely. In his announcement of the new moratorium, he said, "I am basing my decision on evidence that grows every day of the industry's inability in the deep water to contain a catastrophic blowout, respond to an oil spill, and to operate safely."
Coming from an administration hostile to oil and gas, Salazar's words partly reflect a political agenda. But they also describe with painful accuracy the current public mood. This has to change.
Emphatically, thoroughly, and soon, the industry must answer an overarching demand for assurance that nothing like Macondo will happen again. It must speak frankly about practices and decisions that contributed to the blowout, about standards not met, and about standards met but proven deficient. It aggressively must communicate findings of the several task forces studying the accident and changes that result. And, in testimony to congressional hearings and speeches to audiences of every kind, it must begin with statements like this, from American Petroleum Institute Senior Policy Advisor Andy Radford: "Setting the bar higher on safety is the industry's number-one priority," he told the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling in a July 12 hearing in New Orleans. "That is what the accident demands." Precisely.
None of this means the industry should quit resisting the drilling moratorium on the basis of energy supply and economics. Those arguments are important and need to be made. But the industry has to assure a skeptical American public that a disaster like Macondo won't happen again. It has to put safety ahead of all other arguments it makes on behalf of deepwater drilling.
Until that happens, until politicians start hearing from voters more acceptance than they hear now of the industry's safeguards and disaster preparedness, energy and economics won't matter in discussions about deepwater drilling, of which little, far too little, will occur.