Oil Spill Commission report could shape industry’s future


When President Barack Obama established the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling on May 22, 2010, the worst oil disaster in American history had just entered its second month.

Oil was gushing into the Gulf from a hole in the sea floor, with no end in sight. Americans were transfixed and horrified by the biggest story of 2010. Congress, firmly in the hands of Democrats and eager to expose the culpability of an oil industry many viewed as reckless and rapacious, launched a frenzy of hearings, as many as five in a single day.

More than seven months later, the commission will present its final findings Tuesday about the disaster – its causes and lessons – in a very different environment.

The well was long ago sealed. The story has receded from the front pages. Oil prices have replaced oiled pelicans as a source of public concern. The parade of congressional hearings is over, and Republicans, with a far more benign view of the oil industry and a more jaundiced view of regulation, have wrested control of the House. Spending new money on just about anything – including a beefed-up regulatory agency – will be difficult.

Just as it was early on, the BP spill is once again primarily a concern of folks in the Gulf states and especially Louisiana, where the industry and the political establishment want nothing more than to get back to business as usual: drilling, baby, drilling.

And so, the real question Tuesday is not what the commission will report, which by this time is mostly known, but how it will be received. In six months of intensive work, the commission has done an exhaustive and serious job, but has public attention drifted and the political climate shifted in ways that will leave its report to founder?

“Outside the Gulf region, the public has moved on,” said Jack Pitney, a political scientist at California’s Claremont McKenna College. “The administration took a big political hit from the disaster and it not eager to wallow in oily waters.”

Amid the new political terrain in Washington, it is hard to imagine either the White House or Congress placing the recommendations of the Oil Spill Commission front and center. Even with Democrats in control, the 111th Congress couldn’t rouse itself to give the commission the subpoena power it sought or the Interior Department the additional money it needs to beef up the inspection regime that everyone seemed to agree had proved woefully inadequate in the lead-up to disaster.

‘The reliable source’

And yet, even absent some dramatic initiatives emerging from the commission’s report, some believe that its work – and the searing impact of the spill on the American mind – will play a critical role in defining the future of the offshore industry.

“It’s going to be the reliable source on the worst environmental disaster in U.S. history,” said Rice University historian Douglas Brinkley, who said the commission’s report will be the bible for scholars, litigants and policy-makers for years to come. “This is the gold standard of what happened, and it could have a profound effect on a lot of Obama administration policies.”

It’s clear that the disaster, regardless of how the commission’s report is received, has already pushed the administration to be more cautious, putting the industry in a holding pattern and curtailing the once-bold talk of expansion.

For example, said Brinkley, who has a new book coming out this month on the Alaskan wilderness, the report could effectively scotch new drilling there. “If it really looks like the offshore industry doesn’t know how to deal with an industrial accident and is clueless about how to kill a gusher, then it would be the end of Shell’s attempts to drill off the Arctic Coast,” said Brinkley.

Road map for the future

“I think most Americans are going to remember April 20,” the day of the Deepwater Horizon explosion, said Bob Deans, co-author with Peter Lehner, executive director of the Natural Resources Defense Council, of “In Deep Water,” the first of several books published on the disaster. And, he said, for those Americans who never want to see it repeated, “this report is going to give them a road map.”

“It seems spot on,” said Antonia Juhasz, the San Francisco-based author of “The Tyranny of Oil,” who also is writing a book on the disaster. She believes the Obama administration was only too eager to get the spill out of the headlines – declaring in early August that most of the oil was “all gone from the Gulf, when it wasn’t.” She hopes the report will catalyze public pressure to end deepwater drilling as long as industry cannot be trusted to adequately manage it, and government to adequately regulate it.

Meanwhile, the industry is already dismissing the findings as overbroad and overwrought. Jack Gerard, president and CEO of the American Petroleum Institute, said last week that most Americans agreed with the industry view that the BP disaster was an “isolated incident.”

After the commission last week released its chapter on its investigation into the cause of the blowout, Don Briggs, president of the Louisiana Oil and Gas Association, recited aloud the commission’s central thesis: “The root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur.” Briggs, added dryly, “Well, we’ve only drilled 2,500 deepwater wells in the Gulf without this happening before.”

“I’m not saying that no reform is needed,” Briggs said, “because there are some things that industry can do that will help in the future to prevent such an incident. However I don’t believe the industry is doing a poor job in working and keeping safety in mind for the environment and for their employees in the Gulf of Mexico because that’s been number one for the industry for decades now.”

Shut down

In the end, Briggs said, the commission’s work is a monumental waste of money, noting that the Obama administration has already effectively shut down the industry, first with a moratorium on deepwater drilling, and then with a new regulatory regime that has yet to issue a new deepwater permit.

“That’s what we are,” Briggs said. “Shut down.”

Bob Bea, the University of California at Berkeley engineer who leads the Deepwater Horizon Study Group, which has conducted its own inquiry, is sympathetic with both the industry, with whom he has worked, and the commission, many of whose conclusions he shares.

Bea said Deepwater Horizon laid bare the far greater risk involved in drilling in very deep waters. But, he said, those 50,000 barrels a day of oil that came spewing out of the Macondo well, day after endless day, were telltale evidence of an unimaginably rich and irresistible “golden zone of hydrocarbons” that BP and other oil companies are just now tapping into in the Gulf.

What must happen next, he said, is a slow, methodical process to make the changes – like those called for by the commission – that will enable the oil companies to pursue that ultra-deep oil within acceptable levels of risk, while not shutting down the industry in the meantime. And, Bea said, he detects a “head of steam” behind those efforts in both industry and government.

“This is not going to go away,” he said.

Brian Black, a professor of history and environmental studies at Penn State Altoona, also views the spill and the study as a turning point in taming the oil industry.

“I hope that when I teach about this event in 10 years, I will cite the commission and then trace how our energy transition picked up steam from 2010 forward, and Big Oil was brought under more regulation and monitoring than ever before,” Black said. “The problem is that being in the eye of such change often makes its overall trajectory hard to discern.”

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
Cooper Law Firm

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