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Federal regulators haven't kept up with oil drilling expansion

When the Deepwater Horizon rig exploded and oil started gushing into the Gulf of Mexico, neither the oil companies nor their watchdogs in the Interior Department were ready.

May 08, 2010|By Jim Tankersley, Tribune Washington Bureau, and Julie Cart, Los Angeles Times

Reporting from Washington and Gulfport, Miss. — While oil and gas companies have pushed the frontiers of offshore drilling into deeper, more dangerous waters over the last decade, their government watchdogs stayed behind in the shallows, clinging to long-standing practices and failing to plan for new hazards, according to scores of federal documents and interviews with government officials and outside auditors.

So when the Deepwater Horizon barge, leased by BP, exploded April 20 and 5,000 barrels of oil started flowing daily into the Gulf of Mexico, neither the oil companies nor their regulators in the Interior Department were ready.

There was no written protocol, no history of drills to simulate a disaster anywhere close to this size. Interior analysts had calculated that the chances of any spill exceeding 1,000 barrels were 3% to 5%. There are no records to suggest anyone had seriously considered the possibility of such a nightmare coming true.

Computer analyses projected only a 7% chance that in a month's time a spill in the area where the BP leak began could drift into the marshes and bayous of St. Bernard Parish, La. Oil from the spill began washing up in the parish Thursday, 16 days after fires erupted on the Deepwater Horizon and sent it to the bottom of the gulf, leaving 11 workers missing and presumed dead.

As a result, officials found themselves inventing untested plans as the BP spill worsened. Company officials are putting their hopes on a temporary fix, a concrete-and-steel containment box that was lowered over the main leak Friday. The box is designed to funnel the oil flow via pipes into a ship. But it ran afoul that same night when it became clogged with gas and water crystals that look like slush.

It could take days to remedy that problem — and officials can't guarantee success. And even then, it won't permanently stop the flow of oil from BP's well head. Plan B, drilling a relief well, could take three months.

Officials who oversee offshore drilling defend their risk assessment models and oversight practices, noting that it's been 30 years since there has been a major offshore blowout anywhere in the world.

But documents and interviews suggest the Minerals Management Service, the branch of the Interior Department that oversees oil and gas drilling on federal land and offshore, has fallen behind in several of its fundamental regulatory duties, including enforcing environmental and safety rules, assessing the risks of energy exploration and calculating how much money the federal government is owed in oil and gas royalties.

At the same time, the management service has taken pains to help the energy industry move ahead with cutting-edge technologies to drain fossil fuels from increasingly remote locations. Its confidence in the industry appears entrenched, according to audit findings and interviews.

For example, MMS safety inspections have consisted mainly of helicopter visits to offshore rigs to parse the company's results of self-administered tests. MMS officials say their risk modelers essentially trust that new industry drilling techniques will be as safe as the simpler techniques of the last several decades.

Safety regulators have exempted many new technologies from formal procedures to create rules, instead collaborating with industry groups to make certain those technologies comply with regulations crafted for less-challenging drilling techniques, under a process called "alternative compliance."

The Government Accountability Office, the nonpartisan research arm of Congress, has criticized the environmental and technological expertise of the agency in a series of reports. In March, a GAO report found that MMS suppressed its own scientists' concerns over proposed Arctic drilling — a prospect far riskier than Gulf of Mexico exploration because of its remote locale and treacherous ice-filled seas. The office also found that the agency possessed no formal handbook for conducting legally required environmental reviews of drilling projects.

The service also lagged in one of its most fundamental tasks — ensuring oil companies accurately report oil flows used to calculate royalties, the GAO found. MMS had not updated some of its measurement standards in two decades, had fallen behind current technologies, and failed to meet inspection and calibration goals aimed at maintaining accurate measurements.

"What MMS struggles with is striking that balance between developing the resource and ensuring the environmental considerations are thought out," Mark Gaffigan, a director in the GAO's natural resources division, said in an interview. "The question is whether they've really thought everything through and are taking a look at all the changing technologies…particularly as you get into higher degrees of difficulty" such as deepwater drilling.

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