Commission Weighs Self-Governing Body for Oil Drilling Safety

By | August 25, 2010

The White House oil spill commission Wednesday will probe U.S. offshore drilling policies and consider pushing the oil industry to accept a self-governing body to help oversee tough safety standards.

With a focus on offshore drilling safety after the BP oil spill, the commission’s second public meeting will hear from Interior Department officials and the head of the White House Council on Environmental Quality, Nancy Sutley.

Nuclear industry officials will testify about the Institute of Nuclear Power Operations (INPO), an industry group that helps regulate nuclear power plant safety.

Commission co-chair Bill Reilly said last week the panel was looking at proposing a regulatory structure modeled on INPO. Such a system would aim at ensuring higher safety standards, possibly through project evaluations that would be turned over to insurance companies and government regulators.

The Gulf oil spill exposed the need for accountability among drillers. As in the nuclear industry, one accident carries steep costs for the entire sector.

“An INPO-like facility very strongly backed by a regulatory authority, by the government, could really fill that gap,” Reilly told Reuters in an interview.

The commission will also hear Wednesday from the nuclear industry agency’s current president, retired Admiral James Ellis, and former agency chief executive Zack Pate.

President Barack Obama set up the seven-member commission to provide recommendations on offshore drilling after the BP Plc oil spill battered the Gulf coast for months.

The panel may also wade into the controversy surrounding the Interior Department’s moratorium on deepwater exploratory drilling through the end of November.

After hearing complaints about the ban from local lawmakers and oil company representatives at its first meeting in July, the commission wrote to Interior asking whether any of the rigs covered by the ban were safe enough to resume operations.

In a response the panel released Monday, Interior’s Bureau of Ocean Energy Management head Michael Bromwich said the department was not focused on rig-by-rig inspections “performed against the backdrop of shifting regulatory requirements.”

Bromwich said the department may lift the ban before the November deadline on certain categories of rigs the department determines are less risky.

Bromwich’s predecessor, Liz Birnbaum is set to speak about regulatory challenges. A little over a month into the oil spill, Birnbaum resigned as head of the agency formerly known as the Minerals Management Service, which was criticized for having too cozy a relationship with oil companies it was supposed to oversee.

The Minerals Management Service is now undergoing reorganization as the Bureau of Ocean Energy Management.

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