Congress wants to know why MMS aborted tougher drilling rules

McClatchy NewspapersMay 13, 2010 

WASHINGTON — Engineers launched their latest effort to curb the crude oil gushing from a busted underwater well in the Gulf of Mexico Thursday as lawmakers on Capitol Hill wrangled over the liability limits for oil companies and continued to probe the mishaps and regulatory failures that caused the mammoth spill.

The Interior Department's Minerals Management Service, which regulates oilrigs, came under more scrutiny as congressional investigators scheduled hearings to find out why the federal agency never completed rules that would have required additional controls on blowout preventers — the safety equipment that failed to stop the spill.

Staffers from the House of Representatives Natural Resources Committee, who traveled to Louisiana this week to sit in on the U.S. Coast Guard-led inquiry into the April 20 explosion of the Deepwater Horizon oil drilling rig, said they learned from the testimony of Mike Saucier, an MMS regional supervisor for field operations, that new rules had been proposed.

Saucier said the agency prepared but never completed regulations in 2001, the first year of George W. Bush's presidency, that would have required secondary control systems for blowout preventers.

"As far as I know, they're still at headquarters," Saucier said.

The devices have been at the heart of the inquiry into what caused the explosion that killed 11 and continues to spew oil into the Gulf of Mexico.

The House committee also will be examining the agency's ties to the oil industry and whether a cozy relationship kept it from enacting tougher regulations. McClatchy reported last week that nearly 100 standards set by the American Petroleum Institute are included in the MMS' offshore operating regulations.

The chairman of the committee, Rep. Nick Rahall, D-W Va., asked the MMS on Thursday to provide all documents related to regulations that it proposed but never finalized. He also asked the agency to turn over inspection reports from the oilrig, and a list that details potential noncompliance with MMS regulations.

Meanwhile, efforts on Capitol Hill to raise the liability cap for oil companies from

$75 million to $10 billion ran into a roadblock when Sen. Lisa Murkowski, R-Alaska, objected to the proposal.

Murkowski said she supports lifting the cap, but contended the $10 billion figure would prevent smaller, independent companies from drilling on the Outer Continental Shelf.

Sen. Bob Menendez, D-N.J., mocked the idea of independent companies as "mom and pop" oil companies and questioned why smaller companies shouldn't be held responsible in the event of a catastrophe.

"Ten billion dollars is a drop in the bucket," Menendez said, noting that BP, the owner of the runaway well, posted profits of more than $5 billion for the first quarter of 2010.

Menendez said that he and other lawmakers plan to try to push the bill again.

"We're going to see who stands with the average citizen, community, fishermen and others and who stands with Big Oil," he said.

Six West Coast senators and Florida representative also introduced separate bills that together would have the effect of banning offshore drilling permanently.

The legislation by U.S. Rep. Corrine Brown, D-Fla., would permanently prohibit offshore drilling on the outer Continental Shelf of the Atlantic Ocean and Gulf of Mexico. The bill by Democratic Sens. Barbara Boxer and Dianne Feinstein of California, Jeff Merkley and Ron Wyden of Oregon and Maria Cantwell and Patty Murray of Washington would permanently ban oil and gas drilling off the California, Oregon and Washington coasts.

While the political storm over the spill gathered steam, BP engineers said their best chance to control the underwater oil leak now rests with a six-inch-wide tube that they'd try to insert into a jagged 21-inch pipe that's spewing oil onto the Gulf seabed.

BP crews will insert the tube, which is surrounded by a rubber seal and attached to a tanker at the surface, sometime Thursday night, said BP spokesman Mark Proegler.

"We'll be operational as soon as possible, over the next several days," he said.

The tube will be inserted into the larger of two leaks, the one that's releasing about 85 percent of the estimated 210,000 gallons of crude a day, Proegler said.

If the tube fails, then BP officials have a back-up plan: lower a steel and concrete dome called a "top hat" over the leak. The top hat, four feet in diameter and five feet tall, would be attached to a drill pipe that would siphon the oil to a ship at the surface.

The "top hat" has been resting on the seafloor since Tuesday and originally was planned as BP's next attempt to control the spill. There was no explanation for why BP engineers decided to try the insertion tube first.

On Thursday, BP estimated that it's spent about $450 million on fighting the oil spill and drilling a relief well since the Deepwater Horizon exploded, killing 11 workers. That's $100 million more than estimates released earlier in the week.

Meanwhile, Transocean, Ltd., the Switzerland-based offshore contractor that owned the Deepwater Horizon, filed a petition in federal court in Houston seeking to limit the company's liability from the oil spill to less than $27 million.

Invoking a little-known 1851 maritime law, the company said it shouldn't have to pay more than the salvage value of the charred oilrig and its freight, all of which sank in 5,000 feet of water on April 22. Before the accident, the rig was valued at more than $500 million.

In a statement, Transocean said the court petition was filed at the request of its insurance companies, and the petition will allow the company to consolidate more than 100 current lawsuits before a single federal judge in Houston.

Lawyers for those injured in the blast said the petition could also prevent any claims filed more than six months after the accident.

"It's very unfair," said Matthew Shaffer, a Houston attorney who represents a handful of Transocean employees injured in the blast. "It's a slap in the face to anyone who has been injured because of their negligence."

Along the Gulf Coast, state officials noted additional reports of oil washing ashore amid a growing chorus of concern over the massive use of chemical dispersants to break up the oil.

The Coast Guard said that tar balls were found at South Pass, La., at the mouth of the Mississippi River, and on the southern end of the Chandeleur Islands east of New Orleans.

More tar balls were found on Whiskey Island off the Louisiana coast, the farthest point west where oil has been seen so far.

At a town hall meeting in Port Sulphur, La., dozens of local residents, filled with fishermen, were angry over the hundreds of thousands of gallons of chemical dispersants.

Asked Kindra Arneson, whose husband is a fisherman: "How much of this stuff, this dispersant, the toxins from the oil spill itself and everything, is evaporating up into the air, coming onto our shores, pouring down onto our land?"

McClatchy correspondents Bolstad and Clark reported from Washington, and Chang of the Miami Herald reported from Miami. Contributing to this report were Mark Washburn of the Charlotte Observer in New Orleans, Scott Hiaasen and Jennifer Lebovich of the Miami Herald in Miami, Travis Heying of the Wichita Eagle in Port Sulphur, La., McClatchy correspondent Michael Doyle in Washington and Marc Caputo of the Miami Herald in Venice, La.

MORE FROM MCCLATCHY

Oil spill: BP had wrong diagram to close blowout preventer

Gulf oil spill inquiry focuses on role of costly drilling mud

Since spill, feds have given 27 waivers to oil companies in gulf

Researchers worry about oil dispersants' impact, too

McClatchy's oil spill coverage

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