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Wednesday, 12 May 2010 08:47

House Oil Spill Hearings Find That Oil is Cheap Because R&D Dollars are Spent on Drilling, Not Safety or Clean-Up Technology

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BUZZFLASH NEWS ANALYSIS
by Meg White

When she heard about the boom chemicals being used to disperse oil from the sunken rig in the Gulf of Mexico, the thoughts of Rep. Lois Capps (D-CA) were far away. She was thinking about her hometown Santa Barbara in the late 1960s when Union Oil's Platform A had a destructive blowout.

Clean-up efforts at the time utilized the same kinds of oil dispersant, or boom materials, as BP is using in the Gulf today. However, recent studies have found that such clean-up efforts can be more destructive than simply leaving the oil to its own devices.

Her question for BP CEO Lamar McKay at a hearing today in the House Energy Committee's Subcommittee on Oversight and Investigations was if oil exploration has advanced leaps and bounds since the 1960s, "Why was there not equivalent technology developed to clean up after a spill?"

The same type of question would be asked many times throughout the hearing Wednesday, to no avail. While there was some discussion of the implications on the perceived safety of offshore drilling in the Senate hearing on the oil spill Tuesday, the House was more focused on the implications than senators.

The House hearing today included a panel of companies that included BP, Transocean Ltd, Halliburton and Cameron -- all companies with varying degrees of possible responsibility for the disaster that is spewing some 5,000 barrels of oil into the Gulf of Mexico each day.

Under criticism over their inability to stop the rig from leaking, BP's defense has largely been that techniques that have failed (and the ones that are about to be tried) have never been employed at 5,000 feet of water.

This excuse prompted Rep. Betty Sutton (D-OH) to question whether the economic inputs into the technology required to extract oil from deep in the ocean have been matched when it comes to investing in safety.

"The necessary investment to develop safety measures... were not adequately advanced," she said in her opening statement. "Safety must come first and investment in it must match" investment in extraction.

Reports have been circulating ever since the spill happened about how government regulators have been convinced by industry that certain safety inputs are too expensive to make a requirement. Yet, the mounting cost of the spill illustrates the flimsiness of that argument.

The safety instruments that the industry has been trumpeting as foolproof have been exposed as anything but in recent weeks.

"BP and Transocean were relying on the [blowout prevention] device as if it was the ultimate fail-safe," said Rep. Peter Welch (D-VT). "If BP had a report that it commissioned... and it contained 260 failure modes [of blowout prevention devices], under what construction of the English language is a device with 260 failure modes a fail-safe device?"

The industry's false sense of security, which allowed oil companies to overestimate their abilities to handle spills, was also under scrutiny today.

Rep. Edward Markey (D-MA) criticized a certification from BP prior to the disaster that asserted the company could deal with a spill leaking up to 250,000 barrels of oil a day. The Deepwater Horizon rig is spilling an estimated 5,000 barrels a day, which Markey noted is but 2 percent of the "worst-case scenario" that BP had promised the government that they could handle.

"Mr. McKay, you'd better rethink your certification," said Markey. "There are rigs all over the gulf that are ticking time bombs."

"I can only conclude that you don't have the resources to respond," Markey continued, noting that BP is encountering boom shortages and that their latest plans include utilizing nylons and hair to soak up the oil. "The American people expect your companies to have a technological [response on par with] the Apollo project, not Project Runway."

Though the safety of deepwater offshore drilling was questioned, lawmakers stopped short of calling for an end to the process.

The disaster did earn one -- perhaps temporary -- convert to the anti-deep-water offshore drilling team. Rep. Charlie Melancon (D-LA) opened his line of questioning by admitting that he has been a long-time supporter of oil and gas, and thanked his colleagues for having thus far "refrained from saying 'I told you so.'" He said he still supported shallow water drilling, but added that he cannot "with a good heart encourage the continuation of deepwater until I know that all safety precautions are there."

Ranking Member Joe Barton (R-TX) noted that while he's an "ally" of Outer Continental Shelf (OCS) drilling, "We have to reassess the entire OCS drilling program."

Even the owner of the sunken oil rig agreed that there is good reason to suspend drilling in the wake of this accident.

"A pause -- similar to what Secretary Salazar has asked for -- I think a pause is prudent," said Transocean CEO Steve Newman.

Of course there were certainly a fair amount of conservatives lining up to defend President Obama's recent proposal to expand offshore drilling.

"While some might want to stop drilling offshore entirely, this would be a mistake," said Rep. John Sullivan (R-OK). "We should not use this tragedy as an excuse to roll back the gains we have made."

The CEOs at the hearing emphasized the unique nature of the disaster to mitigate the sense of danger portrayed by the spill.

"We've never dealt with a blowout in the Gulf of Mexico of this magnitude before," said Transocean Ltd. CEO Steve Newman.

"This is an unprecedented event we've got to figure out," McKay added.

"I just don't know how we can believe anything that we hear from the oil industry," said Rep. Eliot Engel (D-NY) in response to that assertion from McKay. He noted that in the aftermath of the Exxon Valdez disaster that many the industry made similar claims. "I'm not convinced and frankly I'm very, very angry."

When asked about whether offshore drilling in very deep ocean water should be abandoned as a safety measure, McKay said, "I have confidence that the deepwater and the ultra-deepwater drilling can be developed" in a safe matter, especially as a result of what the investigation may uncover.

When McKay mentioned the "ideas" that they've been developing as a result of the spill, Capps interrupted him and countered, "You never had any before it happened."

"Did you develop technologies to deal with this?" she asked as a follow up.

"No individual technologies, no," McKay responded.

"I rest my case."

BUZZFLASH NEWS ANALYSIS