The BP Deepwater Horizon oil spill, that left 4.2 billion barrels of oil spilling into the Gulf of Mexico, was devastating. It illustrated the far reaching effects of the potentially unavoidable hazardous incidents that comes along with highly complex systems such as offshore oil drilling. The disaster also illustrated that environmental destruction has economic and social effects, as cities and small businesses that catered to tourists lost income stream as well as did the local fishing industry. Five years later it is time to reflect. What were the takeaways from the disaster? Did these takeaways elevate our expectations of oil companies? Were these takeaways applied to reduce the potential of such effects in the future? Let’s take a look…
After the oil spill, a panel appointed by President Obama was given the responsibility of reviewing the disaster. In their final report, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling concluded that the chief disaster was not a blowout preventer, but a broad systemic failure of oversight by the companies involved in the drilling (BP, TransOcean and Halliburton) as well as the government regulators assigned to police them. Also, it highlighted the problem of allowing the government to rely on the offshore drilling industry, as it did in BP case, in regard to oversight and response. More oversight was needed, as well as accountability, attention to management, process design and adherence to the system.
The past five years has seen no action by Congress in preventing an accident like this from occurring again and none of the recommendations by the panel were implemented. Instead, President Obama’s administration has used the U.S. Department of the Interior to put into place regulations in regard to offshore drilling including regulations on drilling well casings (2010) and cementing of wells (2012). The agency has also doubled the number of safety inspectors in Gulf of Mexico, and required drilling companies to have access to containment dome technology that can be put over an exploded well and contain the oil in case of a leak. This past Monday, the Obama administration did announce new regulations to prevent oil spills like this to happen again. The regulations specifically “target the reliability of drilling equipment, especially the blowout preventer, a piece of equipment that seals and controls oil and gas wells and which failed during the Deepwater Horizon spill.” Yet many are skeptical, saying that the regulation simply makes official best practices and standards that are already used in the industry. For example, the new regulations requires two shear rams in case one fails to operate properly, although use of two shears is already an industry standard. Moreover, although President Obama has restricted offshore oil drilling and exploration of Alaska’s North Slope, he has also opened up offshore drilling off the southeastern coast of the U.S. and the Gulf of Mexico.
After $43 billion for liabilities, spending $28 billion in restoration, BP says they have learned their lesson: they have introduced new technology that makes offshore drilling safer, capping stacks that can instantly stop the flow of oil. It is also financing long-term research on the Gulf of Mexico. Big oil companies have funded the Center for Offshore Safety that works to promote and disseminate best practices. Yet the industry has continued to expand offshore oil drilling, drilling wells deeper and farther off the coast than the Macondo well. Moreover, the culture and organization of the industry, with its short-cutting to minimize costs (a key cause of the Deepwater Horizon spill), has received little attention. Engineering solutions and technology improvements mean little if management and organization is lacking. In 2012 and 2013, the Gulf of Mexico once again saw a fatal explosion on an oil platform as well as a ruptured natural gas well that caused a partial collapse of an oil rig.
Five years later, are we more likely able to prevent such a disaster from occurring again? Most likely not. Regulations from both the government and industry are scant and don’t go far enough. No national legislation has been established to regulate offshore drilling or appropriate funds for improved safety. Industry culture hasn’t changed, and won’t, unless we shine more light on it. We have already seen other accidents on the Gulf, although they weren’t as disastrous as the Deepwater Horizon spill. We know now what, why and how things went wrong on the Deepwater Horizon, yet contrary to the BP spokespeople have claimed, we have not learned from this horrendous disaster.