Lawmakers Clash over Responsibility for GOM Spill

Deepwater Horizon Gulf of Mexico Oil Spill

MOSCOW (Dow Jones Newswires), July 2, 2010

Officials who regulated offshore oil and gas drilling starting with the Bush administration on Tuesday defended their oversight of the industry during the first congressional probe of the government's actions in the period before the BP oil spill.

The House Energy and Commerce Committee hearing yielded new finger-pointing, with Democrats leveling some of their harshest questions at former Interior Secretary Gale Norton, who served in the Bush administration. But Interior Secretary Ken Salazar also took some blame from members of his own party, as Republicans noted that the BP disaster occurred on his watch.

"The Department of Interior under both President Bush and President Obama made serious mistakes," said Rep. Henry Waxman (D, Calif.) the chairman of the House Energy and Commerce Committee, at a hearing. "The cop on the beat was off duty for nearly a decade, and this gave rise to a dangerous culture of permissiveness."

The hearing is the first to focus exclusively on the role of regulators in the period leading up to the April 20 explosion of the Deepwater Horizon drilling rig. Former Interior secretaries Gale Norton and Dirk Kempthorne, who served under the Bush administration, defended their actions. Current Interior chief Salazar will testify on a second panel.

Kempthorne, who led Interior in the final years of the Bush administration, said that BP won regulatory approval to go ahead with its Macondo well under the Obama administration "after I left Interior." Kempthorne said in written testimony that "all of us"--from both the Bush and Obama administrations--noted offshore drillings favorable safety record and "never contemplated an accident of this magnitude could ever happen." His written testimony took a shot at Congress and the news media for failing to raise warnings.

"I don't ever recall concerns raised at my confirmation hearing or in my subsequent testimonies before Congress or in reports from the inspector general or from the news media that an oil spill of this magnitude could occur," Kempthorne said. "I recall being pointedly asked during congressional hearings why Interior wasn't doing more to expand offshore energy development, not less. In part, this concern was driven by then soaring $4 a gallon gasoline prices."

Waxman noted that Kempthorne oversaw the sale of a lease to BP that the company used to drill the now-broken well. Kempthorne also "oversaw the deeply flawed assessment of potential environmental impacts associated with this lease sale, an assessment that did not anticipate the possibility or impacts of a catastrophic subsea blowout," Waxman said. "As a result, BP did not have to include an oil spill response discussion, a site-specific oil spill response plan, or a blowout scenario in its exploration plan."

Norton faced criticism from Rep. Ed Markey (D, Mass.), Rep. Jay Inslee (D, Wash.), Rep. Bart Stupak (D, Mich), and Rep. Bruce Braley (D, Iowa.)

A visibly angry Markey lashed out at Norton over several policies, including one from 2003 that he said exempted most Gulf of Mexico oil companies from including blowout scenarios in their exploration plans. "Do you agree that the decision you made at that time was a mistake?" he asked repeatedly. Norton said that she didn't know the document to which Markey referred.

"There was a deregulatory ticking time bomb that was set while you were secretary that has now exploded," Markey said.

Citing news reports, Norton said in prepared testimony that "it appears that decisions made by BP in the last days and hours before the blowout were the primary cause of the blowout." She said that regulations on blowout preventers and cementing processes adopted on her watch--which Rep. Stupak criticized--were studied to "provide the scientific and engineering basis to determine whether the rules were adequately protective."

The current Interior chief, Salazar, will recite a list of his initiatives, including gaining more money for inspectors at the Interior agency formerly known as the Minerals Management Service and terminating a program that allows oil companies to pay for oil and natural gas taken from public lands with oil and gas instead of with cash. The royalty-in-kind program became embroiled in a scandal after an inspector general uncovered a cozy relationship between regulators and the oil industry.

"But there is little evidence that these reforms changed the laissez-faire approach of MMS in regulating the BP well," Waxman said. "MMS approved the drill plan and changes to the well design that we have questioned during our investigation," Waxman said.

Stupak criticized Norton, saying that regulations finalized during her tenure failed to include key protections, such as requiring failsafe devices known as blowout preventers to have backup equipment to shut off wells. Rep. Michael Burgess (R, Texas) countered that the BP disaster stemmed from failure to follow existing regulations, "not that George W. Bush prevented a second set of shear rams."

Rep. Jay Inslee (D, Wash.) asked Norton about whether she put into place any regulations that would require the use of parts known as centralizers to keep casing centralized in a well--something that oil engineers consider necessary to ensuring that pipes are successfully cemented into place.

"I don't know what centralizing casing means," Norton said.

"Obviously there has to be a look at what regulations are necessary going forward," Norton said.

Copyright (c) 2010 Dow Jones & Company, Inc.

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