The oil drilling industry, in over their heads

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Thursday, January 6, 2011; 7:52 PM

SOME IN THE offshore oil drilling business would have Americans believe that the Deepwater Horizon spill in April was the fault of a single, irresponsible company. In an exhaustively researched report, portions of which were released Wednesday, the presidential oil spill commission concludes that the causes of the disaster aren't so neatly explained.

"The blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again," the commission argues. "The missteps were rooted in systemic failures by industry management (extending beyond BP to contractors that serve many in the industry), and also by failures of government to provide effective regulatory oversight of offshore drilling."

Yes, critical mistakes were made by BP. But also by Halliburton, the contractor responsible for the cementing, and by Transocean, the rig owner. All three companies have extensive operations around the world. Though some players have done better than others, commission members describe an entire industry that moved over the past two decades from shallow-water drilling to far riskier deep-water operations - without the required adjustments in technology or mentality. Deep-water drills use extremely sophisticated techniques in dangerous, high-pressure conditions. For the most part, neither government inspectors nor industry managers acknowledged or prepared for the new risks. Commission leaders liken the past 20 years to the era when electric utilities moved from coal to nuclear without sufficient attention to the dangers - until an accident at Three Mile Island snapped the industry to attention, with its very survival at stake.

The drilling industry needs to take Deepwater Horizon as a similar wake-up call. The commission is due to deliver its recommendations next week. But already this much is clear from the pages and pages of technical details, which changed practically daily as Deepwater Horizon operated: No government regulatory structure alone can guarantee safety in an industry that must constantly adapt new technology to natural variations in drilling sites and unexpected natural phenomena. Oversight must improve, as the Obama administration has made clear, but also every company involved in oil drilling - not just BP - must individually and in concert with others evaluate industry standards and safety research programs. And none should assume that BP's mistakes could not occur elsewhere.


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