The presidential commission investigating the BP oil spill in the Gulf of Mexico has said that neither the industry nor the US government had made adequate investments in clean-up technology in the wake of the 1989 Exxon Valdez spill.
Of the five oil majors, two companies – ConocoPhillips (COPF.EX – news) and Chevron (Amsterdam: CHTEX.AS – news) – told investigators they had not allocated any money to developing clean-up technology internally, while BP had not clearly indicated whether it had or not. ExxonMobil said it had spent $3m annually and Shell (LSE: RDSB.L – news) said it had spent $5m per year, but investigators said both figures included spending on outside trade associations that were not prepared to handle a spill on the scale of the Deepwater Horizon disaster.
“Based on the minimal information, we believe it is fair to assume that industry spending on in-house response R&D has been, and is currently, minimal at best,” a draft report found.
The report also said it disagreed with industry representatives who argued that research dollars could more efficiently be spent on prevention rather than response technology. One executive told the panel that “response is only a 3-5 per cent solution”.
But the report said the technology that was used in the five-month effort to kill the Macondo well was essentially no different from that used in the aftermath of the Exxon spill.
“We simply do not know what kind of spill response solutions could result from a sizeable commitment by industry and government to response R&D,” it found.
The US government also lacked dedication to research, the report said. The four agencies that receive the vast majority of research funding have spent about $10m per year since 1992.
The investigation found that federal regulations and market forces had “disincentivised” oil companies from improving spill response technology.
One way to tackle the problem would be to revise the offshore drilling insurance regime and increase liabilities for oil companies. It also proposed a tax credit that would only apply to spill clean-up research.
A second report released on Monday noted that – according to a senior government official – BP viewed other oil companies with suspicion when asked to advise the government on the best way forward, while calls organised by Washington were “fairly disorganised”.