Commission on BP Oil Spill Calls for Tougher Regulations

Oil Spill Commission says government and oil industry need to do more.

Jan. 11, 2011 -- A "fundamental reform" of the oil industry and government regulations is needed to ensure that another incident like the BP oil spill doesn't occur, according to the president's National Commission on the BP Deepwater Horizon Oil Spill.

In a report released today, the commission attributed the causes of the largest oil spill in U.S. history to a "culture of complacency," leading to human errors, engineering mistakes and mismanagement by BP, Halliburton and Transocean as well as a lack of stringent offshore drilling regulation.

"We believe they unveil systemic failures within the oil and gas industry and within the regulation by the federal government of that industry," former Sen. Bob Graham, D-Fla., and co-chair of the commission said. "Our government let it happen. Our regulators were consistently outmatched."

The commission recommended the creation of a safety agency within the Department of Interior that would oversee all aspects of offshore drilling and bring regulation of the industry in line with the 21st century.

Funding for this agency would come from fees attached to the leases for offshore drilling in public waters. The commission called on Congress to boost funding and training for the Department of Interior to ensure that appropriate and serious oversight is exercised.

"It is our government's responsibility that exploration and extraction occur in ways that are beneficial to the country," Graham said. "Drilling offshore is a privilege to be earned, not a right to be exercised by private corporations."

The commission also proposed the creation of a safety institute led by leaders in the oil industry to ensure best standards and practices are carried out; raising the current liability cap of $75 million for offshore drilling accidents; and the allocation of 80% of the funds collected from the BP oil spill to restoration efforts in the Gulf of Mexico.

The seven-member panel unanimously approved the 15 recommendations included in the report. Many of the recommendations will require action by Congress, but the administration may also implement some of the recommendations through executive order.

Report Generally Supported

The commissions' findings were met with support, for the most part.

"We can't undo the damage or bring back the lives we've lost, but we can learn from our mistakes. This report is the right place to start," Peter Lehner, executive director of the Natural Resources Defense Council, said in a statement.

Several lawmakers have released statements suggesting they will introduce legislation reflecting the commission's recommendations.

"Some key Republican leaders previously have said that we should wait for the results of this investigation before passing legislation to respond. The results are now in and now it is time for action," Rep. Edward Markey, D-Mass., said. "This new report will improve and bolster the long-overdue reforms needed to keep our offshore oil industry operating in a safe and responsible manner."

"The commission is clear: Not only are more spills of this magnitude entirely possible, but taxpayers and coastal communities remain financially exposed. We cannot continue to coddle oil companies by protecting them when they destroy livelihoods," Sen. Robert Menendez, D-N.J., said. "The bottom line is that what we enact must ensure that if an oil company spills, taxpayers do not pay a dime for cleanup or economic damages and coastal families are made financially whole."

The American Petroleum Institute lauded the commission's recommendation for increasing funding for a federal safety agency but criticized the commission for casting doubt on the industry as a whole based on one incident.

"This does a great disservice to the thousands of men and women who work in the industry and have the highest personal and professional commitment to safety," Erik Milito, API Upstream Director, said.

Sen. Richard Shelby, R-Ala., believes the recommendations do not adequately take into account the impact the spill had on all states along the Gulf of Mexico.

"The commission's report seems to favor funding for Louisiana to the detriment of the other four affected Gulf States. Clearly, Alabama's damage should be considered equally in restoration efforts and recovery efforts should not focus on the damage experienced by only one state," Shelby said in a statement.

"It is imperative that the administration not use this disaster simply to create further bureaucracy and red tape without improving safety and efficiency. The ultimate goal must be to restore the Gulf community, not use the spill to further political agendas."

But as Sen. Graham pointed out, the oil industry and government are responsible for ensuring another catastrophe like the BP oil spill does not happen again.

"If dramatic steps are not taken, at some point another failure will occur, and we will wonder why did the Congress, why did the administration, why did industry, why did the American people allow this to occur?"