Editorial: A New, and Necessary, Moratorium/A Disaster Congress Voted For

Editorial: A New, and Necessary, Moratorium
Copyright by The New York Times
Published: July 13, 2010
http://www.nytimes.com/2010/07/14/opinion/14wed1.html?th&emc=th


Despite legal challenges from industry, complaints from local politicians and bad rulings from unsympathetic judges, the Obama administration has rightly chosen to reaffirm its decision in May to suspend deep-water drilling activities in the Gulf of Mexico. On Monday, Interior Secretary Ken Salazar issued a second moratorium to replace an earlier ban that was tossed out in federal court. It is as strong as the first ban and, if anything, more tightly argued.

Whether the new ban can withstand legal challenges remains to be seen. The important point is that the administration has reaffirmed one of the basic lessons of this mess: that industry claims cannot be accepted at face value. BP was tragically unprepared to deal with this spill; indeed, a new and tighter cap that everyone hopes will stop the leak altogether is only now being installed, 13 weeks after the blowout. Until the industry shows it can drill safely in deep waters, and respond swiftly and surely to an accident, it should not be allowed to go forward with that kind of operation.

Drilling, in short, cannot be resumed on faith alone. Mr. Salazar said he would invite input from industry and the public, and was open to modifying the order. But first, he said, industry must “raise the bar on its practices and answer fundamental questions about deep-water safety, blowout prevention and containment, and oil spill response.”

The original May 27 moratorium banned new deep-water drilling in the gulf and suspended existing operations at 33 exploratory deep-water wells for a period of six months. The new moratorium applies the same restrictions for the same time period, ending Nov. 30, unless the administration decides otherwise.

The biggest difference involved the way in which Mr. Salazar cast his argument. The original moratorium focused mainly on depth, proscribing any drilling at depths exceeding 500 feet. The district court judge who overturned the ban, Martin Feldman, in effect said that focusing only on depth was too narrow to be persuasive.

Mr. Salazar chose this time to emphasize uncertain technologies. The new ban covers all floating rigs, like the BP rig, using subsurface blowout preventers, as well as floating rigs that use blowout preventers on board the rig itself. This pretty much covers every deep-water rig with the capacity to drill in the gulf.

There were howls from the usual quarters — from industry, predictably, and from Mary Landrieu, the Democratic senator from Louisiana, who said the new moratorium would cost “thousands of hard-working Louisianians” their jobs.

One must sympathize with the battered residents of Ms. Landrieu’s home state. But one cannot ignore the fact that most of the gulf’s 3,000 producing platforms and shallow-water drilling rigs are still in business, or that President Obama has earmarked $100 million specifically for relief of unemployed oil workers.

The main thing that cannot be overlooked is that it would be folly to resume drilling until everything has been done to make drilling as safe as it can be and to ensure a rapid response when systems fail.




A Disaster Congress Voted For
By DAVID S. ABRAHAM
Copyright by The New York Times
Published: July 13, 2010
http://www.nytimes.com/2010/07/14/opinion/14abraham.html?th&emc=th


CONGRESS has proven adept at placing blame for the gulf oil spill — depending on whom you listen to on Capitol Hill, BP bears the bulk of the responsibility, or the Interior Department and its increasingly inadequate regulations, or both.

There’s no question that each of these deserves blame. But there’s also no question that the responsibility for developing safe offshore operations extends much further, to Congress itself.

For more than a decade, legislators have allowed themselves to be lulled by industry assurances that drilling in deep water posed little danger. One could say that Congress, just like the companies it has attacked, was obsessed with oil.

Before the spill, Congress had not debated regulatory safety on wells in the gulf since the 1990s, and when it did, lawmakers focused on how to drill for more oil — which, after all, meant more jobs and more federal revenue for pet projects.

In a 1995 attempt to encourage more exploration, Congress agreed to reduce the cut of the proceeds the government could collect on oil and gas drilling in deep waters. Ten years later, despite higher oil prices and declarations from President George W. Bush that more incentives were not needed, a Republican-led Congress reduced royalties yet again.

And in a sign of how money had influenced and distorted the debate, throughout the last decade the Louisiana Congressional delegation, for a time including the state’s current governor, Bobby Jindal, backed expanded offshore drilling so that Congress could use proceeds to pay for coastal damage caused by oil-and-gas operations. In 2006 the delegation supported legislation giving a share of federal royalties to states that allowed drilling in federal waters off their coasts, essentially using national revenue to encourage more exploration.

At the same time that Congress called for new drilling incentives, it also gutted oversight. From 2002 to 2008, legislators approved budgets reducing regulatory staffing levels by more than 15 percent — despite more complex deep-water operations and Interior Department concerns, voiced in 2000, that industry’s extensive use of contractors and inexperienced offshore workers posed new risks in deep water.

It’s not as if Congress didn’t know the risks. Its own research arm, which issues frequent spill-response readiness assessments, has repeatedly cited a 2004 Coast Guard study finding that its “oil spill response personnel did not appear to have even a basic knowledge of the equipment required to support salvage or spill clean-up operations.” Nevertheless, lawmakers failed to act aggressively to ensure adequate oversight.

To be fair, Congress wasn’t alone. The same criticism could be leveled at many environmental groups, which were far more interested in maintaining the exploration moratoriums in federal waters than in the safety of ongoing offshore activity. This focus on stopping new drilling — instead of on keeping the water clean — helped give Interior the space to cater to oil companies. As a result, regulatory proposals often received fewer than 10 public comments, mostly from industry, resulting in rules more favorable to it.

It’s also true that the previous administration deserves a good share of the blame for its myopic focus on production. The 2001 President’s National Energy Policy directed agencies to increase oil supplies and to remove regulations that were often seen as “excessive and redundant.”

Meanwhile, the Interior Department became an industry cheerleader. The attention on output was so great that the department’s head of offshore drilling boasted about how he “oversaw a 50 percent rise in oil production,” a misguided accomplishment for a regulator.

Nor is the Obama White House off the hook: despite requesting a few extra regulators, the current administration also failed to address underlying organizational dysfunction.

The only upside of the spill is that Congress is finally focused on drilling safety. Congress should pass legislation to direct all future royalties to the Treasury, thereby reducing the incentives for legislators to use new proceeds as a piggy bank.

Second, any legislative action that would lead to an increase in oil and gas production should also mandate an increase in regulatory oversight.

There’s also the issue of whether to allow new wells. Environmental groups have seized on the spill to continue their push to ban offshore drilling. Although doing so would reduce the potential for spills in the United States, it would effectively send offshore drilling operations to countries with far weaker environmental standards and require shipping more oil, increasing the likelihood of spills globally.

Instead, a more nuanced approach is needed. A good first step would be for environmental groups to hire experts with the relevant private-sector experience to comment on regulatory changes to ensure that they are in the best public interest.

The fact that accidents and spills are an unfortunate part of industry activity doesn’t let BP and the Interior Department avoid blame. But Congress should recognize its own role in undermining offshore safety and encouraging risky drilling — then act to make sure disasters like the gulf spill don’t happen again.

David S. Abraham, who oversaw offshore programs at the White House Office of Management and Budget from 2003 to 2005, is an incoming international affairs fellow at the Council on Foreign Relations.