Offshore-Drilling Safety Gets an F

After BP’s Macondo well gushed millions of gallons of oil into the Gulf of Mexico in April 2010, a presidential panel made dozens of recommendations for how industry and the federal government could prevent an environmental disaster of that scale—the worst in U.S. history—from happening again. In the almost five years since the accident, the National Academy of Engineering, the U.S. Chemical Safety and Hazard Investigation Board, and others also chimed in with their own sets of suggestions.

Offshore drilling has grown steadily since the Gulf spill, and earlier this year President Obama proposed opening up far more ocean in the Atlantic and Arctic to oil exploration. So, all those safety recommendations for the industry must be in place by now, right? Like offshore drilling itself, that assumption isn’t so safe. Here’s our report card of the government’s progress.

Recommendation: Improve blowout preventer regulations
Status: Incomplete
A faulty blowout preventer caused oil and gas to spew out of the Macondo well for 87 days, turning what could have been a minor spill into the worst environmental disaster in U.S. history. A blowout preventer has a couple of mechanisms to cut off the uncontrolled flow of oil and gas. The first line of defense is to block off the drill pipe using steel and rubber valves. If that fails, a massive set of blades slices through the pipe and closes the space. Both strategies failed in the Deepwater Horizon spill. The valves permitted too much oil to flow into the pipe, which increased pressure and bent the pipe out of shape. The blades could not then shear cleanly through the kinked pipe, and oil and gas continued to flow through to the drilling rig, causing it to blow up.

Investigators concluded that the blowout preventer contained “a litany of flaws” and warned that many devices still in operation have similar design problems. The president’s panel recommended in 2011 that the Department of the Interior require stronger blowout preventers that will operate effectively even if the drill pipe has moved from its original position. The National Academy of Engineering demanded better testing processes as well.

Manufacturers are now designing improved blowout preventers, and there are rumors that the long-awaited blowout preventer regulations will arrive this spring. But, as of now, it’s five years and counting without new rules.

Recommendation: Increase government inspectors
Status: Halting progress
At the time of the BP disaster, there was one inspector for every 54 drilling facilities in the Gulf of Mexico region. The inspectors worked solo to increase their coverage, even though most believed they needed a partner for a thorough examination. A majority of inspectors surveyed in 2010 said they did not believe they had sufficient training to monitor offshore drilling rigs. Many said they relied on industry representatives—the people they were supposed to be monitoring—to explain how the rigs worked. To remedy this problem, the president’s panel recommended increased funding to the key regulatory agencies and improved salaries that would put rig inspectors on the same compensation level as the people who inspect nuclear reactors.

The number of inspections in the Gulf has increased by 15 percent since the spill. Funding to the Bureau of Safety and Environmental Enforcement—the Interior Department’s primary regulator of offshore drilling—has gone up, which could help raise the number and quality of inspectors. But that agency is only one piece of the regulatory puzzle. Money to the National Oceanic and Atmospheric Administration and other regulators has remained relatively flat. The president’s panel also recommended that Congress require the oil and gas industry to pay into a fund to cover regulatory work, but it has yet to happen.

Recommendation: Create a fund for spill research
Status: Waiting for Congress
The Deepwater Horizon didn’t make the front page of the New York Times on its first day, because few people recognized just how bad it would get. Confusion reigned. A Coast Guard official told reporters, “We do not see a major spill emanating from this incident.” There were reports that the blowout preventer had sealed the well. It wasn’t clear who was in charge of the firefighting operation. BP’s press conferences became an exercise in absurdist theater, as the company tossed out an ever-changing set of strategies to stem the flow of oil.

Recognizing the chaos that followed the initial explosion, the president’s panel suggested a mandatory fund for oil spill response research. It wanted money for the fund to be allocated outside the ordinary appropriations process, so it couldn’t be reallocated as memories of the spill faded. Congress’ memory has apparently faded. We’re still waiting for it to act on that recommendation, and it now looks extremely unlikely.

Recommendation: Create an independent agency to oversee offshore drilling
Status: Waiting for Congress (sensing a pattern?)
The Minerals Management Service, an agency within the Department of the Interior, was responsible for virtually every aspect of offshore drilling at the time of the spill. It had the awkward—though, perhaps, lucrative—position of collecting money from drillers while regulating their activities. Shortly after the accident, the service was split to create the Bureau of Safety and Environmental Enforcement, which focused entirely on inspections and monitoring. The split was a good step, but the president’s panel wanted to make the bureau entirely independent with the authority to issue safety rules and environmental protection requirements.

Unfortunately, only Congress can make the bureau a fully independent agency with a full slate of regulatory and enforcement powers. Five years after the spill, and more than four years since the administration created the bureau, Congress hasn’t acted. (Acting is not this Congress’s strong suit.)

Recommendation: Increase the liability cap
Status: Waiting for Congress
The Oil Pollution Act of 1990 caps liability for damages resulting from an oil spill at $75 million. There are exceptions to the rule—the cost of removing the oil from the water is not included in the limit, for example, and the cap does not apply in cases of gross negligence, such as BP’s. Even taking those exceptions into account, though, the cap is obviously too low. The president’s panel noted that the damages from the Deepwater Horizon spill were “orders of magnitude greater” than $75 million. The costs have already run into the tens of billions, and the Gulf is still recovering.

Congress has so far failed to raise or abolish the cap. Opponents of increased liability say that a major spill would bankrupt smaller offshore operators, and lifting the cap could drive independent companies out of the industry. While those may be legitimate concerns, the liability limit affects plenty of other people who deserve our attention just as much—like those who live and work around the Gulf of Mexico, and the taxpayers across the nation who get stuck covering damages that the spiller doesn’t pay.

Of the dozens of recommendations the president’s panel made in 2011, this is likely the easiest to implement. Since it’s in the hands of Congress, though, it hasn’t gotten done.