Oil Spill Commission Update: Nov. 9, 2010

National Commission on the BP Deepwater Horizon Oil Spill & Offshore Drilling

Co-Chairman, Hon. William K. Reilly’s Opening Statement from Nov. 9 Hearing

Presentations and examinations yesterday uncovered a suite of bad decisions: failed cement tests, premature removal of muds underbalancing the well, a negative pressure test that failed but was adjudged a success, apparent inattention, distraction or misreading of a key indicator that gas was rising toward the rig.

Our investigative team did not ascribe motive to any of those decisions and reported that they found no evidence that those flawed decisions were made to save money. They didn’t rule out cost, just said they weren’t prepared to attribute mercenary motives to men who cannot speak for themselves because they are not alive. But the story they told is ghastly: one bad call after another.

Whatever else we learned and saw yesterday is emphatically not a culture of safety on that rig. I referred to a culture of complacency and speaking for myself, all these companies we heard from displayed it. And to me the fact that each company is responsible for one or more egregiously bad decision, we’re closing in on the answer to the question I posed at the outset of yesterday’s hearing, whether the Macondo disaster was a unique event, the result of special challenges and circumstances, or indicates something larger, a systemic problem in the oil and gas industry.

BP, Halliburton and Transocean are major respected companies operating throughout the Gulf and the evidence is they are in need of top-to-bottom reform. We are aware of what appeared to be a rush to completion at Macondo, and one must ask whether the drive came from that made people determine they couldn’t wait for sound cement, or the right centralizers. We know a safety culture must be led from the top, and permeate a company.

The Commission is looking beyond the rig to the months and years before. BP has been notoriously challenged on matters of process safety. Other companies may not be so challenged and today we will hear from two whose reputations for safety and environmental protection are exemplary.

They will tell us, I believe, that safety and efficiency reinforce one another, and that their safety cultures have contributed to their profitability. Both companies and their safety/risk management systems have received extensive examination by the Commission’s staff in meetings I have attended. They are impressive.

Nevertheless, their rigs have been shut down in the Gulf this summer because of the performance of other companies. This has led the Commission to learn from the nuclear industry which has an institute that promotes best practices, reinforces regulations, and polices the laggards. So if yesterday we heard from the laggards, today we hope to learn from the leaders--companies which learned from their own crises and disasters and rose to become standard setters.

William K. Reilly, Co-Chair, National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling is a Founding Partner of Aqua International Partners, LP, a private equity fund dedicated to investing in companies engaged in water and renewable energy, and a Senior Advisor to TPG Capital, LP, an international investment partnership. Mr. Reilly served as the first Payne Visiting Professor at Stanford University (1993-1994), Administrator of the U.S. Environmental Protection Agency (1989-1993), president of the World Wildlife Fund (1985-1989), president of The Conservation Foundation (1973-1989), and director of the Rockefeller Task Force on Land Use and Urban Growth from (1972-1973). He also served as the head of the U.S. delegation to the United Nations Earth Summit at Rio in 1992. Conflict of Interest Waiver http://www.oilspillcommission.gov/document/waiver-reilly
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About the Commission
President Barack Obama established the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling through Executive Order 13543 on May 21, 2010. The Commission will be examining the relevant facts and circumstances concerning the root causes of the Deepwater Horizon explosion and developing options to guard against, and mitigate the impact of, any oil spills associated with offshore drilling in the future. This may include recommending improvements to federal laws, regulations, and industry practices.

Key areas of inquiry for the Commission include:

• The Macondo Well Explosion and Drilling Safety
• The Role of Offshore Oil Drilling in Domestic Energy Policy
• Regulatory Oversight of Offshore Drilling
• Oil Spill Response
• Spill Impacts and Assessment
• Restoration Approaches and Options

The Commission is co-chaired by Senator Bob Graham and former EPA Administrator William K. Reilly. The other Commissioners are Frances Beinecke, Donald Boesch, Terry Garcia, Cherry Murray, and Frances Ulmer. Over the course of its work, the Commission will be holding public meetings, producing staff working papers, meeting with stakeholders, interviewing key players, and analyzing the evidence related to the spill and its aftermath.

A final report on the Commission’s findings is due to the President on January 12, 2011.