Q & A: Chairs of BP oil-spill panel discuss drilling moratorium, response efforts

By Mary Pat Flaherty
Monday, August 9, 2010; A11

On Aug. 25, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling will meet in Washington. The seven members of the bipartisan panel appointed by the president held their inaugural session in New Orleans in July to investigate the April 20 BP blowout. The commission must deliver a written report to President Obama by January on the root causes of the disaster, ways to guard against deep-water spills and improvements in spill response.

As it faces that deadline, the commission and its staff of about 20 still await congressional action to give it subpoena power and to fully fund its work -- a request for $12 million was stripped from an appropriations bill before the August recess. The panel also was drawn into the debate over the federal moratorium on deep-water drilling.

In New Orleans, the members heard heartfelt pleas from gulf-area residents about lost wages, spoiled beaches and threats to their way of life, capped by a fisherman who captivated the hotel meeting room when he played guitar and sang about the effects he felt. The Washington session will focus on the role of the Interior Department's Minerals Management Service, the now-renamed agency that inspected drilling rigs and approved company spill response plans.

Below are excerpts from a conversation with the commission's co-chairmen, Bob Graham and William K. Reilly. Graham is a former senator and Florida governor. Reilly headed the Environmental Protection Agency during the 1989 Exxon Valdez oil tanker spill.

QGive me some of the impressions you have after your first session. What surprises?

Graham: The diversity of the impacts of this spill has impressed me. We spent a day in the panhandle of Florida between Panama City and Pensacola, and a lot of it was spent with fishermen who had a whole series of very specific concerns. . . . The federal waters had been closed for much of the normal fishing period and [they] asked would there be an extension at the end of the period and, if so, how would the limitation on volume of catch be handled. That was illustrative of the specificity of implications of this event.

Reilly: The biggest surprise to me was the virtual unanimity of opposition to the moratorium. I had a private meeting with about a dozen fishermen in Mississippi, and if there was any group that I had expected might have sympathy for the moratorium and has a lot to risk and already has lost considerably from a spill, I would have thought it was that group. They absolutely did not support it. The shutdown of the rigs and loss of employment and income on the part of people who work on the rigs and service them in one way or another . . . it simply has had an effect that was stunning.

Does that put you in mind that you need to say something about the moratorium? , h Have you been struggling with that?

Graham: Bill and I did make some comments in New Orleans, and as we begin to put together our report one of the chapters will no doubt have a title such as "Response" and look at how did the various public and private entities respond. . . . I think we would be making comments under that section as to: How effective was the moratorium? How well was the moratorium administered and managed? What were the consequences . . . on the side of safety, encouraging enhanced response as contrasted to the economic aspects?

Reilly: I don't understand why it would take six months to vet 33 [deep-water] rigs [under the moratorium] for safety, environmental compliance, regulatory integrity. It's never been made clear to me, and the testimony we received in New Orleans was not convincing on that. The commission has sent a letter to the Bipartisan Policy Center requesting it to organize a group of experts . . . to essentially frame the questions that should be asked relative to what is necessary to resume prudently drilling in deep water in the gulf, and we expect to have those questions in the next few weeks and refer them to the Interior Department and ask, "Which of these questions have you not yet answered and what are you doing to answer them?"

Where do things stand on your appropriation waiting for Congress? Are you still running off that interim $4 million from DOE (Department of Energy)?

Graham: Yes. . . . And thus far we have been able to meet our payroll and other obligations.

Reilly: There is no more [money allocated] now, but there is an understanding we have with the White House that they will ensure another source of funding to make sure we won't run out of money, which otherwise we would do in September.

From the oil industry's standpoint, are they asking to come in to talk to you?

Reilly: Some of the people are asking . . . and some are surprisingly forthcoming, partly because they are so mad at BP.

Questioning BP, is that on the table?

Reilly: Oh yes.

How do you think of your roles going forward, and how would you measure in your own mind a successful outcome?

Graham: One analogy might be to members of a jury. . . . We take very seriously the role of being driven by fact and science. . . . We are going to learn a lot about the specific mechanisms that failed . . . but if that's all we do I think then we would have missed our larger responsibility, which is to answer what were the cultural factors in the industry and in the relationship between industry and regulators that set the stage for this.

Reilly: My expectation and hope is that we will do three things. We will prescribe the paths to reforms of cultures both in the Interior Department . . . and also in the companies. . . . Everything I've read suggests we had a dysfunctional regulator and a company that, can we say, was highly challenged by processes of safety. We would prescribe an appropriate policy for safety and the environment in particularly sensitive places. . . . Had something like this happened under the ice, Lord knows it would have been worse. And third, I would hope we could heighten the resources and interest to heighten the response. . . . What I see is a primitive response industry. . . . To me, it differs very little from what I saw 20 years ago. . . .

The industry has transformed itself into a technological behemoth, and the government regulator is a 98-pound weakling.

Graham: In other areas, as technology rapidly expands, issues of safety and response expand on a parallel tracking. . . . The technical ability to drill deeper and deeper was not paralleled with the same intensity for the safety of that deeper drilling. . . . The question is: Why was there that disconnect?

So, why was that? I confess having a "duh" moment over that.

Reilly: After the Oil Pollution Act passed [in 1990] a lot of people patted themselves on the back about tankers having double hulls and positioning equipment in ports and no one has put money into research and to upgrade it. . . . You would have had to have government leadership and pressure to address it. We just didn't have it.

Graham (who also sits on a federal panel exploring the financial crisis): [The economic meltdown] is eerily similar. . . . In both instances, the people who were driving the system were the people who were financially benefiting by that, and the people who were responsible for ensuring safety and appropriate standards for the activity were not similarly motivated, and they fell further and further behind . . . and there was no mechanism in Congress to continuously challenge and reexamine what they had done in the context of the latest technology and ask if this still is sufficient.

Reilly: In subprime and in the blowout in Deepwater there was also something close to a consensus, a mindset, that the disaster couldn't happen.

Can you guarantee the public you will have someone playing the guitar at every commission hearing? Laughter.

Graham: Can we move from musical instrument to musical instrument? Accordion, banjo.

Reilly: That guy was so good and such a nice diversion from the mood of the meeting. If you have anybody in mind to enliven the hearings, let us know.