Admin Response to Rig Disaster

May 18, 2010
03:36 PM
Opening Statement – May 18, 2010
Administration Response to Deepwater Horizon Disaster
“This is our second hearing on the continuing disaster in the Gulf of Mexico.  The purpose of this and future hearings is to understand the cascade of failures that caused the catastrophic blowout of the oil well being drilled by the Deepwater Horizon rig, and to determine what Congress needs to do to ensure that it never happens again.
“Last week, we heard from two distinguished technical experts and heads of the three companies responsible for the disaster on what some of those failures might have been.
“Next week we will have a hearing on the issue of liability for damages.
“Today, we will hear from Secretary of the Interior Salazar and his senior team in charge of responding to this catastrophic failure.  I would like to focus this hearing on the role of regulatory failure in causing this catastrophe.  Along with the failure of technological systems, and failure of the people operating those systems, regulatory failure is one of the three key interlocking breakdowns that I believe are at the heart of the problem.
“I believe that there are several dimensions to regulatory failure in this case.
“President Obama suggested one, last week, when he cited a ‘cozy’ relationship between the Minerals Management Service, or MMS, and the industry it was regulating.
“There are three other regulatory areas that I think bear some close examination in this hearing:
1.     Whether we had the right technical standards in place to govern the drilling being undertaken by the Deepwater Horizon rig;
2.     Whether we have been taking a ‘systems’ approach to oversight of deepwater drilling operations, with sufficient staff resources and training to match the complexity of what was being undertaken; and
3.     Whether we had adequate mechanisms to follow-up on changes being made to the complex drilling operation for this well, as drilling was proceeding.
“The first of these forms of possible regulatory failure — the failure to have the right technical standards in place — may be exemplified by the problems in the cementing of the well.  It’s possible that the extent of the cementing was inadequate for this particular well given its other design features.  However, the amount of cement appears to have met the MMS’s technical standard.  In some ways, having a prescriptive standard that is inadequate in certain systems might be worse than not having a standard at all.
“The second form of possible regulatory failure — not having a proper ‘systems approach’ — could be a result of a limited and reactive role that MMS seems to have taken over the years toward these highly complex wells.  Many MMS employees do have relevant expertise and are involved in research in key areas of well safety.  In my view, they need to be more fully engaged with industry in reviewing overall design and implementation of these challenging deepwater wells.
“Finally, the third form of possible regulatory failure is exemplified by the lack of follow-through on how approved plans are implemented, including the detection and response to unusual occurrences that might warn of bigger problems.  There appear to have been a number of changes in the well plan during its construction, including those involving the number of structural ‘centralizers’ being used and the point at which drilling mud was withdrawn from the well.  These decisions can be driven by cost and the desire to make up lost time on the drilling project, and it is important to ensure that safety is paramount.  This raises an important question -- where was the MMS in this process?  Was it consulted?  Does it have an established role that ensures that it will scrutinize major changes to previously approved plans?
“We know that MMS inspectors visit rigs to review activities taking place on them, and while the documentary record of inspections on this particular rig appears somewhat cloudy, it was inspected approximately on a monthly basis.  Is this enough?  How are unusual occurrences and abnormal events, which might indicate the need for more frequent inspections, communicated to the MMS in between inspections?  And are inspectors asking the right questions when they do these visits?
“Having identified these three broad categories of possible regulatory failure, the question before us all is, what should we be doing next?
“First, I believe that we should find out all we can about problems that existed on the Deepwater Horizon are present in other deepwater drilling operations in the Gulf.
“Second, that there should be a comprehensive and independent technical review of the precise drilling plan that was proposed for this well.  I hope the Department of the Interior should make the full drilling plan available for peer review by other industry experts.   
“Finally, while I have sketched out some broad areas of obvious failure, we are still learning more about the potential root causes of this disaster on a daily basis.  I believe that we need a more thoroughgoing and independent review of the safety and regulation of OCS oil and gas operations generally.  We have profited by such independent assessments after other major disasters, such as Three Mile Island and the loss of the space shuttle Challenger. I am glad to learn that the President intends to charter such a Commission on his own authority, and look forward to it beginning its work soon.”
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