[THS] Forget Offshore Drilling Until We Get Some Answers

[The Harder Stuff in news and commentary]

http://www.tnr.com/blog/william-galston/forget-offshore-drilling-until-we-get-some-answers?utm_source=TNR+Daily&utm_campaign=3a126c5c04-TNR_Daily_050410&utm_medium=email

THE NEW REPUBLIC

William Galston
Forget Offshore Drilling Until We Get Some Answers


While it may take months to stop the BP oil spill in the Gulf of Mexico, it’s not too soon
to begin asking some questions about why it happened and what can be done to
minimize the chance that something like this will happen again. Thanks to The Wall
Street Journal’s terrific reporting last week, there are two important things we already
know.

First, an oil-drilling procedure called cementing—which is supposed to prevent oil and
natural gas from escaping by filling gaps between the outside of the well pipe and
the inside of the hole bored into the ocean floor—has been identified as a leading
cause of well blowouts. Indeed, a 2007 study by the Minerals Management Service
(or MMS, the division of the Interior Department responsible for offshore drilling)
found that this procedure was implicated in 18 out of 39 blowouts in the Gulf of
Mexico over the 14 years it studied—more than any other factor. Cementing, which
was handled by Halliburton, had just been completed prior to the recent explosion.
The Journal notes that Halliburton was also the cementer on a well that suffered a
big blowout last August in the Timor Sea off Australia. While BP’s management has
been responsive to press inquiries and relatively forthcoming as to its responsibility,
Halliburton has refused to answer any questions—an all-too-familiar stance on its
part.

Second, the oil well now spewing large quantities of crude oil into the Gulf of Mexico
lacked a remote-control acoustic shutoff switch used by rigs in Norway and Brazil as
the last line of defense against underwater spills. There’s a story behind that. As the
Journal reports, after a spill in 2000, the MMS issued a safety notice saying that such
a back-up device is “an essential component of a deepwater drilling system.” The
industry pushed back in 2001, citing alleged doubts about the capacity of this type of
system to provide a reliable emergency backup. By 2003, government regulators
decided that the matter needed more study after commissioning a report that offered
another, more honest reason: “acoustic systems are not recommended because they
tend to be very costly.” I guess that depends on what they’re compared to. The
system costs about $500,000 per rig. BP is spending at least $5 million per day
battling the spill, the well destroyed by the explosion is valued at $560 million, and
estimated damages to fishing, tourism, and the environment already run into the
billions.

There’s something else we know, something that suggests an explanation for this
sequence of events. After the Bush administration took office, the MMS became a
cesspool of corruption and conflicts of interest. In September 2008, Earl Devaney,
Interior’s Inspector General, delivered a report to Secretary Dirk Kempthorne that has
to be read to be believed. One section, headlined “A Culture of Ethical Failure,”
documented the belief among numerous MMS staff that they were “exempt from the
rules that govern all other employees of the Federal Government.” They adopted a
“private sector approach to essentially everything they did.” This included “opting
themselves out of the Ethics in Government Act.” On at least 135 occasions, they
accepted gifts and gratuities from oil and gas companies with whom they worked.
One of the employees even had a lucrative consulting arrangement with a firm doing
business with the government. And in a laconic sentence that speaks volumes, the IG
reported: “When confronted by our investigators, none of the employees involved
displayed remorse.”

So here’s my question: what is responsible for MMS’s change of heart between 2000
and 2003 on the crucial issue of requiring a remote control switch for offshore rigs?
What we do know is that unfettered oil drilling was to Dick Cheney’s domestic
concerns what the invasion of Iraq was to his foreign policy—a core objective,
implacably pursued regardless of the risks. Is there a connection between his
infamous secret energy task force and the corrupt mindset that came to dominate a
key program within MMS? Would $500,000 per rig have been regarded as an
unacceptably expensive insurance policy if a drill-baby-drill administration hadn’t
placed its thumb so heavily on the scale?

It’s possible that my dark suspicions are baseless, and there’s no connection between
the Bush-Cheney administration’s energy policy and the sad events of the past two
weeks. But I’m just one guy with a keyboard reading documents and asking
questions. I hope that some entity—public or private—with the needed staff and
resources will do what’s necessary to get to the bottom of these questions. Before we
even consider going forward with any more offshore drilling, we need some answers.