http://www.eenews.net/Greenwire/2012/04/17/3

Phil Taylor, E&E reporter
Published: Tuesday, April 17, 2012

While federal agencies and industry have made significant safety reforms after the worst oil spill in the nation’s history, Congress has failed to pass a single bill that would help prevent another catastrophe, according to a report from the former members of a presidential spill commission.

The report released this morning by the Oil Spill Commission Action — which includes the seven members of the BP oil spill commission charged with issuing recommendations in the wake of the Deepwater Horizon accident — also questions the government and industry’s ability to respond to a spill in Arctic waters, where drilling is set to commence in July.

The report slams Congress’ failure to implement a range of recommendations made in the commission’s January 2011 report. Those include ensuring dependable resources for federal agencies such as the National Oceanic and Atmospheric Administration, raising the oil spill liability cap significantly and codifying the changes to the Interior Department’s regulatory structure designed to eliminate conflicts of interest.

By contrast, the House has passed several bills to fast-track drilling that “run contrary” to steps that panel members warn are necessary to ensure safe production of oil and gas.

“Although the administration and industry have made significant progress, Congress has not,” said Bob Graham, one of the commission’s co-chairs. “Two years have passed since the explosion on the Deepwater Horizon killed 11 workers, and Congress has yet to enact one piece of legislation to make drilling safer.”

The only recommendation Congress is close to implementing is a proposal to dedicate 80 percent of the Clean Water Act penalties paid by BP to environmental restoration in the Gulf of Mexico. Even so, only the Senate has passed such a plan, and the House’s proposal is slightly different.

In addition, while Congress has approved significant funding increases for the Interior Department agencies tasked with overseeing leasing and development, lawmakers have not implemented cost-recovery measures to ensure the agencies receive sustainable funding in the future.

“Congress did approve an increase in inspection fees, but has no legislation pending to establish a more robust, dedicated funding source,” the report said.

In contrast, the report speaks highly of the Obama administration’s scope and pace of reform following the spill, lauding Interior’s new workplace safety rule, a drilling safety rule, the appointment of a chief scientist and the separation of leasing and safety functions into two separate agencies, among other steps.

But the report urged the department to follow through on the commission’s recommendation that National Environmental Policy Act reviews during planning, leasing, exploration and development be strengthened.

“They’re paying much more attention to site-specific environmental risks,” said former commission member Donald Boesch. “They’re not using categorical exclusions anymore. However, this is still a work in progress.”

The report also recommends federal agencies adequately test the capability of new containment systems to deal with large, deep and high-pressure spills. It urges Interior to issue new standards to correct deficiencies in blowout preventers, the last line of defense against a runaway well.

“The improvements have yet to be adequately tested, and the Department has not yet issued rules to correct the BOP design flaw identified as a principle reason why the Macondo well BOP failed to operate properly,” the report notes.

Industry received a lower grade than the federal government, though it exceeded the accomplishments of Congress, the report said. Its grade of C+ was due in part to three oil and gas spills off China, Brazil and in the North Sea in the past 10 months, the former commissioners said.

“I think insofar as I’m aware, every company has taken stock of where it is, [and] has upgraded its safety,” said Bill Reilly, former co-chair of the commission. The establishment of two companies to provide capping stacks in the Gulf should enable blowouts to be staunched in a few weeks, rather than the three months it took to quell the Macondo well, he said.

In addition, the newly established Center for Offshore Safety housed at the American Petroleum Institute is “well led” by Royal Dutch Shell PLC scientist Charlie Williams, Reilly said.

But while the center will help hold companies accountable, it must eventually become independent of API to gain credibility, the report said.
Arctic concerns
Today’s progress report did not judge Interior’s proposal to allow Shell to begin exploratory drilling this summer in the Beaufort and Chukchi seas, but it does note “substantial controversy” surrounding the adequacy of spill response in frigid Arctic waters as well as the government’s understanding of the region’s marine ecosystem.
“Although a great deal of Arctic research has been undertaken over the last several decades, many central unanswered questions remain about the unique and complex ecosystems, and how climate change is impacting those systems,” the report notes.

It adds that while industry has conducted experiments to use in-situ burning and mechanical recovery of oil in ice conditions both in Norwegian waters and in labs, “these techniques have not been successfully tested in the extreme weather conditions that are often present in Arctic waters nor they been evaluated in any significant way by government entities.”

Marilyn Heiman, director of the U.S. Arctic Program at Pew, said she is pleased the commission released its report but said its C grade for the Arctic should give regulators and industry pause.

“A C grade in the Arctic is just not good enough,” Heiman said. “Because of the extreme and remote conditions and the resources at stake in the Arctic Ocean, we should strive to be the world’s leader in safety and response.”

While Interior has made “great strides” on safety standards for drilling, it has not made any improvements to oil spill response and cleanup since the Gulf spill, she said.

“In addition, no Arctic-specific safety and response standards have been put in place for the extreme conditions that occur there, including sub-zero temperatures, hurricane-force winds, shifting sea ice, high seas and long periods of fog,” she said.

Special thanks to Richard Charter