US oil regulator 'gave in to BP' over rig safety

Firm allowed to drill without devising plan to cope with blow-out

David Usborne,Us Editor
Friday 07 May 2010 00:00 BST

As crude oil continued to pour out of control into the Gulf of Mexico yesterday, questions were being asked over the relationship between BP and regulators in Washington amid allegations that the company was allowed to drill the deepwater well without filing plans for how it would cope with a blow-out like the one now in hand.

"My understanding is that everything was in its proper place," the US Interior Secretary, Ken Salazar, said during a tour of booming operations on the Gulf Coast. But an investigation by the Associated Press and other media outlets seemed to show that, after lobbying by BP, the Minerals Management Service (MMS) within the Interior Department relaxed the rules so that the company could dodge filing a proper blow-out contingency plan.

The CEO of BP, Tony Hayward, attempted meanwhile partly to pass the buck for the disaster to Transocean, the company that owned the Deepwater Horizon rig that blew up on 20 April, triggering the leak and killing 11 workers. He told the BBC: "I think I have said all along that the company will be judged not on the basis of an accident that, you know, frankly was not our accident."

As officials confirmed the first landfall of oil on an uninhabited island beach, Mr Hayward – who can expect to be grilled harshly at hearings in Washington starting next week along with other BP executives – pointed to the failure of the "blow-out prevent" at the drill hole. "That is a piece of equipment owned and operated by Transocean, maintained by Transocean; they are absolutely accountable for its safety and reliability, and they report to the regulatory authority for its safety," he said.

A cofferdam which may contain the worst of the leaks by trapping the oil and feeding it to a ship above arrived at the source at sunrise and engineers were preparing to begin lowering it to the ocean floor yesterday.

The rules on what plans must be filed by exploration companies before drilling a well were relaxed in early 2008 by the Bush administration. Thereafter there was reportedly some confusion over whether the BP well qualified to be exempted, but that appears to be precisely what happened.

If so, lawmakers in Washington are likely to target the Interior Department for falling down on its responsibilities and becoming too cozy with the oil giants. "I'm of the opinion that boosterism breeds complacency and complacency breeds disaster," said Congressman Edward Markey. "That, in my opinion, is what happened."

Members of Congress will be looking to tighten the rules on the industry in the wake of this disaster. "I suspect you're going to see an entirely different regime once people have a chance to sit back and take a look at how do we anticipate and clean up these potential environmental consequences," noted Senator Judd Gregg of New Hampshire.

A Washington Post investigation concluded that in April 2009 the MMS granted BP a "categorical exclusion" from requirements under the National Environmental Policy Act to file papers on what it would do in the event of a blow-out at the new well. It reported that BP had lobbied for the exclusion just 11 days prior. Moreover in its own assessments, the MMS concluded that a blow-out at a deepwater well in the Gulf would be unlikely to generate spills bad enough for oil to threaten coastal ecosystems.

That no blow-out plan was filed prompted fury from experts like Robert Wiygul, an environmental lawyer. "This is kind of an outrageous omission, because you're drilling in extremely deep waters, where by definition you're looking for very large reservoirs to justify the cost." He added: "If the MMS was allowing companies to drill in this ultra-deep situation without a blow-out scenario, then it seems clear they weren't doing the job they were tasked with."

The cost of the catastrophe for BP is expected to reach billions of dollars, but Mr Hayward said the company will "bounce back". "We're responding to a tragic accident, and as I said we'll be judged by our response," he offered. "The scale of it... the quality of it, and ultimately the effectiveness of it."

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