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DISASTER MANAGEMENT
US senators scold oil spill firms over finger-pointing

Overhaul in store for US oil oversight agency: official
Washington (AFP) May 11, 2010 - The Obama administration said Tuesday it would overhaul the US Minerals Management Service, which critics say has become too cozy with the offshore oil industry it regulates. In the wake of the oil disaster in the Gulf of Mexico, Interior Secretary Ken Salazar said the move would root out an untenable internal conflict, as the agency tries to enforce safety and environmental standards while managing the huge US oil leasing operation. The MMS reaps in billions of dollars each year, garnering more revenue for the US government than any other federal agency except the income tax-collecting Internal Revenue Service, but Salazar said safety must be paramount.

"The job of ensuring energy companies are following the law and protecting the safety of their workers and the environment is a big one, and should be independent from other missions of the agency," said Salazar. "We will responsibly and thoughtfully move to establish independence and separation for this critical mission so that the American people know they have a strong and independent organization holding energy companies accountable and in compliance with the law of the land." The overhaul was prompted by the oil rig disaster in the Gulf of Mexico, where the Deepwater Horizon platform sank after a massive fire, and where an enormous oil spill threatens both the ecology and economy of the region. Salazar said he had enlisted the National Academy of Engineering to provide and independent assessment of how and why the disaster occurred.

"The tragedy aboard the Deepwater Horizon and the massive spill for which BP is responsible has made the importance and urgency of our reform agenda even clearer," said Salazar. "We have been, and will continue to be, aggressive in our response to BP's spill, but we must also aggressively expand the activities, resources, and independence of federal inspectors so they can ensure that offshore oil and gas operations are following the law, protecting their workers, and guarding against the type of disaster that happened on the Deepwater Horizon," he said. Congressional hearings also were underway on Tuesday were to examine the April 20 drilling rig accident, when the Deepwater Horizon offshore oil rig exploded, caught fire and sank sparking an environmental disaster as millions of gallons of oil gushed into the ecologically fragile Gulf.

Among those who testified at two Senate oversight hearings Tuesday were top executives of BP, which owned the well, Transocean Ltd, which owned the rig, and Halliburton, a contractor on the rig. The reforms announced by Salazar announced are the first of several possible changes at the troubled MMS following the disaster, and comes as the Interior Department undertakes a 30-day safety review to improve management and oversight of the US outer continental shelf. He also announced that no applications for permits to drill will go forward until the Interior Department conducts a 30-day safety review of the applicants. Salazar also said the Obama administration would ask Congress for an additional 29 million dollars to enhance MMS's enforcement abilities and would seek 20 million dollars for increased oil platform inspections and engineering studies.
by Staff Writers
Washington (AFP) May 11, 2010
Frustrated US senators on Tuesday scolded top officials from the three oil giants most closely tied to a massive Gulf of Mexico oil spill as the executives blamed each other for the catastrophe.

"I hear one message. And the message is, don't blame me. Well, shifting this blame does not get us very far," Republican Senator John Barrasso said as the Senate sought answers to what triggered the environmental disaster.

Three weeks after the April 20 blast that killed 11 workers and sank the Deepwater Horizon offshore drilling platform, leaving its uncontrolled well to gush millions of gallons of oil into the Gulf, the executives had no answers.

BP America chief Lamar McKay, whose firm leased the rig, cited "anomalous pressure test readings" before the explosion and pointed to the failure of a key piece of safety equipment maintained by the platform operated, Transocean.

"Why did Transocean's blowout preventer, the key failsafe mechanism, fail to shut in the well and release the rig?" McKay testified in the room where lawmakers investigated the oceanliner Titanic's sinking a century earlier.

Transocean chief Steven Newman said a "blowout" -- an uncontrolled surge or oil or gas up the well -- could have blown debris into the blowout preventers meant to be a rig's last line of defense against such a crisis.

But Newman pointed the finger at Halliburton, saying the oil services company was responsible for the well's cement casing, a temporary cement plug in the top of the well, all meant to serve as barriers to a blowout.

"There was a sudden catastrophic failure of the cement, the casing, or both. Without a failure of one of those elements, the explosion could not have occurred," Newman told the Senate Energy and Natural Resources Committee.

Halliburton's chief health, safety, and environment officer, Tim Probert, said BP was ultimately responsible for all of the work done on the rig and that his firm had met BP's instructions and industry practice.

And Probert said Halliburton had never set the final cement plug because the catastrophe occurred as Transocean was doing work on the well.

"I would suggest to all three of you that we are all in this together," Senator Lisa Murkowski, the panel's top Republican, told the executives, warning of a public backlash against offshore drilling.

"Then not only will BP not be out there, but the Transoceans won't be there to drill the rigs and the Halliburtons won't be there to provide for the cementing," she cautioned.

At an afternoon hearing of the Senate Environment and Public Works Committee, Democratic Senator Amy Klobuchar told the same executives that they resembled a group of children who have knocked their baseball through a neighbor's window and were refusing to take the blame.

Moments before the morning session began, two groups of demonstrators took aim at BP, some with black teardrops painted on their faces in quiet protest, another calling out "BP kills wildlife, BP kills people, BP kills the planet."

And moments after it ended, some of them chanted "hey, hey, Lamar McKay, how many fish did you kill today?"

Democratic Senator Jeff Bingaman, chairman of the energy committee, blamed "a cascade of failures" he assigned to technical and human flaws for the crisis, which he likened to the Titanic and the space shuttle Challenger explosion.

"If this is like other catastrophic failures of technological systems in modern history -- whether it was the sinking of the Titanic, Three Mile Island, or the loss of the Challenger -- we will likely discover that there was a cascade of failures: Technical, human, and regulatory," he said.

F. E. Beck, a professor of petroleum engineering, said it appeared barriers designed to control a "kick" -- when explosive natural gas enters the wellbore -- had failed, ultimately causing a "blowout" when gas flowed uncontrollably to the surface and ignited.

Beck played down concerns that the deepwater well might have tested the outer limits of the oil industry's abilities, saying it was "a very difficult well" but "not the most difficult well the industry has drilled by any means."

Elmer Danenberger, a former government regulator of offshore drilling, agreed with one senator that the disaster resulted from "a failure of systems."

McKay said his firm had a team of 40 staff investigating the disaster and promised BP would "pay all legitimate claims" for economic damages, including above a legal ceiling of 75 million dollars.

"Liability, blame, fault, put it over here," BP America chief Lamar McKay told a key Senate panel holding the first hearing into the Deepwater Horizon disaster, gesturing as though pushing something to one side.

"We are the responsible party," he said, declining to comment on a push by some lawmakers to raise the cap to 10 billion dollars.

The undersea well has been spewing an estimated 210,000 gallons per day into the Gulf of Mexico.



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