What the spill commission didn't say about Deepwater Horizon
Obama's White House has failed to deliver the energy-policy reform the US needs
"The Gulf air was warm and the water calm as glass. Beyond the glare of the rig's lights, the night sky glimmered with stars." Later: "Winslow decided it was a good moment to go grab a quick cup of coffee and a smoke. He walked down to the rig's smoking area, poured some coffee and lit his cigarette."
Step forward Bob Graham, William Reilly, the five other members of the panel and their ghost writers. In just eight months, they wrote what is surely the definitive account of the Gulf of Mexico (GoM) and last year's fatal Deepwater Horizon accident. It's no mere report, either. Purple prose abounds. The research was exhaustive. Readers get a Bob Woodward-style treatment of who was aboard, what they said, what their methods of relaxation were (caffeine, nicotine) and how they were feeling as the minutes passed before tragedy struck.
Anyone working for BP, Halliburton, Transocean or the now-defunct Minerals Management Service (MMS), or the politicians who thrived on the publicity the accident offered won't enjoy the 381-page document quite as much. The bluntly titled Oil Spill Commission (OSC), a body appointed by President Barack Obama in May 2010 and charged with getting the facts about the accident straight, didn't mince its words.
Management failed, contributing to the death of 11 men and the worst oil spill in US history. The companies cut corners and took unacceptable risks. The MMS was too close to the companies it should have been policing; and too badly staffed, too weak and too ignorant of the techniques being used offshore to do its job properly. (The report, which even includes a history of the oil sector and especially the GoM, drawing on work by Daniel Yergin and others, is worth reading in full.)
The OSC makes a raft of recommendations about how to prevent another accident in the GoM. It praises the regulations in place in the UK's North Sea. It demands better behaviour from the drillers. But it also makes clear that the US needs the GoM's oil; and the authors even say they were "respectful and admiring of the industry's technological capability". Drilling will resume, they assume. But "systemic", "industry-wide" failings must be straightened out first.
The OSC's best stab is made to establish the disaster's "root causes". "A series of identifiable mistakes," it says, were "made by BP, Halliburton and Transocean that reveal such systematic failures in risk management that they place in doubt the safety culture of the entire industry".
Neither industry nor government has been "adequately prepared" for the risks of deep-water drilling. Oil-industry lobbyists stymied the introduction of safety rules. The preparedness for any accident was weak. So was the understanding of the environment in which the firms operated. Federal regulation was inadequate. The spill response was hindered by politics (when the Coast Guard asked the location of an oiled marsh that Louisiana governor Bobby Jindal was using as a backdrop to display the inadequacy of the clean-up, he refused to tell them). And so on.
All of this is important and may well pave the way for fundamental reform of drilling practices in the GOM. This is needed. But what the OSC doesn't say – and, of course, wasn't commissioned to say – is far more important. US energy policy is in a mess. Obama's White House has failed to deliver the reform the country needs. Now, with another presidential campaign looming and with Congress under Republican control, there is little hope that the situation will improve.
Start with climate change, as red a flag as any to the Congressional bulls. Cap and trade is dead as a policy. The White House's attempt to unleash the Environmental Protection Agency (EPA) to police emissions is seen by Obama's many opponents as a subterfuge to advance unpopular climate-change policies. Republicans will try to put the EPA back in its box. Congressional legislation supporting the US' drive to cut emissions by 17% in the next decade – Obama's target – is unlikely, to say the least. When he said (repeatedly before his election; less frequently after it) that investment in green energy would create jobs, Obama over-promised and under-delivered.
A generous view is that his administration was sidetracked by the global recession and the rescue of Wall Street. Others might say rhetoric was bested by reality – a theme, sadly, of Obama's presidency.
Or take natural gas. The full fruits of the shale-gas breakthrough, which began before Obama's presidency, but have become increasingly obvious during it, offer the US a treasure that should be exploited quickly to restructure the country's coal- and oil-dependent economy.
Anyone in the business knows the basics: coal-fired generation accounts for about 27% of US emissions, says Pew, an environmental group. But thanks to the frackers and their success in shattering the shale, over-supply has driven down the price of its biggest rival, gas. And utilities don't even need to build much new infrastructure to switch: only 40% of US gas-fired capacity is being utilised, points out Shell. Steven Chu, the physicist Obama wisely appointed as energy secretary, says natural gas can be the "enabler" of other, greener power-generation.
But the revolution hasn't begun, at least not on the consumer side. The coal lobbyists' power in Washington remains unassailable. Environmentalists, incomprehensibly, are laying into the single abundant energy source, gas, that is available now to cut emissions drastically. (Gasland, a film by Josh Fox, has done much damage to the reputation of hydraulic fracturing technology, which releases gas from the shale, and the companies that do it.)
As for sensible plans to expand gas's role in the transport sector, for example in the heavy-vehicle fleet, meaningful government support has been absent there, too. After losing the mid-term elections in November, Obama suggested gas could be an area of co-operation between Democrats and Republicans. A good idea. But don't hold your breath.
Policy in a pickle
Then there's oil. How's this for confusion? The country shouldn't allow drilling again in the GoM. And it shouldn't take more oil from Canada's oil sands. But it doesn't want oil from the Middle East or Venezuela, either. All of those high-minded, not to say barmy, ideas come from Washington – some from the president himself.
But, as you ask, no: nothing is being done to make a serious dent in demand, which despite the stagnation that has been under way since 2007, still leaves the US as the world's greediest consumer and largest importer. When an American fills up a car, more than half of the gasoline comes from another country. Think of that when the primaries start again later this year and hopeful candidates start promising "energy independence" to credulous voters.
This mess leaves the US exposed like never before to events elsewhere. China's demand, Opec's policies, international financiers' speculation in oil futures: all of them put cents on the price of a gallon of gasoline and none of them can be controlled from Washington anymore, let alone from Kansas City or Boise. As in 2008, the bull run in the oil market is a threat to the US economy. But this time, Americans are in an even more perilous position, economically, than they were then.
But it all matters to the world, too. The US' inability to join other countries to control emissions makes the whole exercise pointless. Another jump in the trade deficit, as the oil-import bill soars, doesn't just hurt the US economy, it spreads pain elsewhere, too. The OSC found the "root causes" of the BP spill. Someone needs to deal with the root causes of another disaster, that of American energy policy.