October 21st, 2011

Speakers

Former Co-Chair, National Oil Spill Commission

Senior Advisor, TPG

Description 

More than a year after oil stopped gushing into the Gulf, the co-chairs of the commission tasked with investigating the Deepwater Horizon oil spill appeared together at Climate One on October 21 to assess the nation’s response to the disaster. Bill Reilly and Bob Graham commended the Obama administration for overhauling regulation of the offshore oil industry, and praised the oil industry for initiating internal reforms, but they blasted Congress for doing next to nothing to respond to the spill.

Former EPA Administrator Bill Reilly, Co-Chair, with Graham, of the National Commission on BP Deepwater Horizon Oil Spill and Offshore Drilling, said that the administration and the oil industry have heeded the call for reform. “The systemic reforms that we recommended are underway, certainly in the Interior Department under the direction of Michael Bromwich at BOEMRE and Secretary Salazar. They’ve issued any number of new rules on safety and environmental management that are long overdue, I think, and very defensible, very professional, and very appropriate.”

He added: “They are also re-organized, so that they have separated the revenue generating part of oil and gas leasing from regulation on environment and safety. It hasn’t happened statutorily because the Congress hasn’t done it. But Secretary Salazar has done as much as he can do to accommodate the recommendations we made.”

Less expected has been the aggressive push by the oil industry to take control of its own conduct. “Very promising, and to some extent surprising, has been the response of industry,” said Reilly. He cited a litany of industry initiatives: the creation of the Center for Offshore Safety, agreement on a common safety and environmental management system, and establishing criteria for third-party audits among them.

“That’s a very promising response. Frankly, industry has done more than Congress to respond to our report,” he said.

Asked by Climate One’s Greg Dalton to grade the government and industry implementation of commission’s report, former U.S. Senator Bob Graham said: “Probably, in both places, it would be ‘incomplete.’ The actions that have been taken at the executive level in the federal government are very encouraging. I think there are some things yet to do, such as fully implement the safety case approach to offshore safety, as distinct from the current prescriptive process.”

As for Congress, Graham is less than impressed. “The Congress would not get a very good grade because they have essentially done nothing, and in some instances have gone backward, by shortening the time frame in which the Department of Interior’s agencies have to review applications.”

Reilly and Graham expressed frustration that the five Gulf states have been unable to reach agreement to settle monetary damages and fund restoration. “We’re still waiting to see what the final settlement looks like, where the money goes,” said Reilly, but “one hopes it goes to restoration when it’s finally allocated – restoration of the very impaired areas and the wetlands, the fisheries resources of the southern Louisiana coast.”

The settlement, said Graham, would be based on money sourced from three buckets: the $20 billion BP put forward early on, which has gone to immediate needs, such as out-of-work shrimp farmers; penalties established by the Oil Pollution Act of 1990, passed after the Exxon Valdez spill, which uses a formula based on oil discharged to determine funding for long-term needs; and Clean Water Act penalties, also based on the amount of oil discharged.

Graham said he and Reilly want the bulk of the money to go towards Gulf restoration, including up to 80% of the Clean Water Act penalties. As yet, there is no money flowing for restoration, although Graham noted that EPA Administrator Lisa Jackson is developing a restoration plan for the region.

Graham and Reilly also want money dedicated to monitoring potential health impacts of the spill for residents and those who consume Gulf seafood. “I haven’t seen any evidence that there’s been any long-term threat to public health as a result of the event, in seafood,” said Graham.

But, he added, “To fully assess the health implications of this event, and the environmental implications, we’re going to require an extended period of time and a substantial investment in research. That was another one of our recommendations which thus far the Congress has not acted upon.”

Reilly pointed out that after the Exxon Valdez spill money was dedicated to monitoring environmental damage. Researchers were able to track declines in fish stocks and bird populations. “We won’t know that definitively in the Gulf unless there is some systematic monitoring and research,” he said.

More rigorous regulation and adoption of industry best practices will help prevent a future catastrophic spill, but Graham and Reilly also agreed that we need to reduce the demand for oil – and hence the need for more drilling – altogether.

Missing is a national energy plan that would push the U.S. off oil. “I don’t see the United States engaged in any serious thinking about what its economy is going to be in the post-oil era,” Graham said.

“We cannot count on oil running out and its price going up to make renewables attractive, to make them competitive,” added Reilly. “We’ve got to take policy action to make them competitive.” He cited the need for a federal Renewable Portfolio Standard, the electrification of government and corporate vehicle fleets, and research into cellulosic biofuels.

He also stressed the importance of a price on carbon. “One of the interesting things about the budget negotiations: nobody like this idea of a tax, on anything. But when you look at the alternatives of where you would put some kind of revenue enhancing capability, some kind of carbon tax looks the least destructive, and the most practical and justifiable in terms of its public policy consequence.”

“If we’re going to have a sustainable energy industry, it’s going to have to have some kind of protection. We can’t wait until the time that the industry can compete on pure economics with fossil fuels,” said Graham.

 

– Justin Gerdes
October 21, 2011
Photos by Rikki Ward
The Commonwealth Club of California