By Steven Mufson
Washington Post Staff Writer
Thursday, September 30, 2010; AA01
On April 20, as lethal amounts of oil and gas crept into the drill pipe of BP's Macondo well in the Gulf of Mexico, the attention of the energy and environmental world was elsewhere.
The Jefferies investment firm issued a report that recommended buying shares of Halliburton, whose cement job was buckling under the sea floor. Environmental groups were getting ready to celebrate the 40th anniversary of Earth Day. The Obama administration and its Senate allies were planning to unveil a climate proposal alongside corporate leaders, including a top executive from BP.
Then came the Big Spill.
For four months, the geology of the public agenda shifted. The climate proposal was never rolled out. Earth Day's anniversary was the day oil from the Macondo well started gushing into the Gulf of Mexico. President Obama's March push to open areas to offshore drilling gave way to a six-month moratorium on new deep-water exploration wells.
Now that the well is officially dead, what is its legacy? Will the massive spill -- the biggest offshore spill in U.S. history -- make a drop of difference in the long run? Will it change long-term trends in offshore oil drilling, U.S. energy policy or the way consumers use energy?
"For the companies, the regulators and the gulf residents, the spill has had a profound impact on their operations and ways of life. For the broader national population and the political debate, it has had a surprisingly small impact," said Jason Grumet, executive director of the National Commission on Energy Policy, a part of the nonprofit Bipartisan Policy Center. "It is the modesty of the impact on the national energy debate that is in many ways most surprising."
For a time, it seemed that the spill might galvanize lawmakers and consumers. But consumers respond to gasoline prices, which have been unusually stable for the past few months. In the Senate, ironically, a climate compromise unraveled, in part because expanded offshore drilling could no longer be used to woo undecided members. The Senate probably won't even pass a narrow oil spill measure, which has been bogged down in disputes over such issues as liability limits for offshore drilling.
Moreover, Obama is expected to lift his drilling moratorium soon, yielding both to pressure from Gulf Coast lawmakers worried about jobs and to the reality that offshore drilling is needed to meet U.S. oil demands. Chernobyl helped end nuclear plant construction in Europe, but deep-water offshore drilling will continue because that's where the oil is. Now, as the National Oceanic and Atmospheric Administration declares that much of the spill has been devoured by microbes and dissipated, the political impact of the spill could dissipate further.
"As soon as the well was contained, we bounced back to American exceptionalism," said Grumet. It was as though, he said, the nation cried, "We did it!"
"Is it the Twitter consciousness where every 15 seconds we have a new thought?" Grumet wonders. "Is it that the recession has made so many people worried about themselves? Or is it that the impacts were so localized that once the newspapers stopped talking about it, it went away?"
But many experts said that, within the industry, the spill has had lasting consequences, apart from any direct environmental damage.
"I think the spill is a game changer," said William Reilly, co-chairman of the president's oil spill commission tasked with examining policy for offshore drilling in light of what went wrong with the Macondo well. "The industry has never been more alert to safety."
He said companies with relatively good safety reputations, such as Exxon Mobil and Shell, have not only scrutinized their own practices but are also pushing for improvements at firms they see as laggards. Moreover, four big companies -- Exxon, Shell, ConocoPhillips and Chevron -- have pledged to spend $1 billion on a Gulf of Mexico spill response force, complete with prefabricated equipment and full-time response teams.
"I don't think any of us looks at this and says this is an acceptable response," Shell Oil President Marvin Odum said of the Macondo accident during the summer.
Reilly also points to regulatory changes in progress, including an increase in the number of federal government inspectors. Many policy makers are looking to the nuclear industry for models to ensure that safety can be maintained in a highly technical area.
But the fundamentals of energy use, policy and exploration remain as unmoved as the rock formations at the bottom of the gulf -- despite what Agora Financial energy analyst Byron King has called the offshore oil industry's Chernobyl.
Most unchanged of all: U.S. motorists. Oil companies go to sea to keep us moving around on land. More than half of U.S. oil use -- and about one in eight crude oil barrels worldwide -- goes to fuel our cars and trucks. In part because of the slightly improved economy, consumers used about half a percent more gasoline this summer than they did last year.
"In terms of an effect of the oil spill on consumption, it is hard to see a direct link," said Howard Gruenspecht, deputy director of the federal Energy Information Administration.
Many energy experts support higher taxes on oil products, such as gasoline, to cut U.S. consumption. With the country relying on imports for 60 percent of its needs, national security experts want lower consumption, too.
But with the no-tax tea party making political inroads and the sluggish economy, there is even less thirst than usual among lawmakers for gasoline tax increases.
The spill "probably seeds that desire to get onto cleaner fuels, but we haven't seen a political impulse in these hard economic times to do anything costly to achieve that goal," said Phil Sharp, a former congressman and president of Resources for the Future, a Washington think tank.
Josh Dorner, former Sierra Club spokesman now at the Center for American Progress, said the spill was "another in a long series of wake-up calls about needing to get on a more sustainable path about the way we use energy." But, he added, "it comes at a time when people are increasingly anxious about the economy and any number of things. So I think at some point there's a litle bit of an overload of bad news."
The industry knows that and has voted with its feet -- or rigs. Few oil executives expect any fundamental change in plans for drilling exploration wells in the Gulf of Mexico; as a result, all but two of the 33 deep-water exploration rigs in the gulf have stayed there awaiting the end of the moratorium. The gulf is where 19 percent of U.S. proven crude oil reserves lie, and it is where the best prospects are.
"Things will be slower, more deliberate; financing is going to be tighter," said Agora's King. "To the extent people are going to keep doing deep-water drilling -- and they are, because that's where the oil is -- we're still going to drill it, but you're going to see renewed emphasis on safety."