UPDATE 1-US should link oil leases to firms' records-panel

Wed Oct 13, 2010 5:24pm EDT

 * U.S. should award leases based on safety records-panel
 * Govt failed to manage drilling risk - panel
 * Panel co-chair Reilly applauds end of drilling ban
 (Adds comments from co-chair Reilly)
 By Ayesha Rascoe
 WASHINGTON, Oct 13 (Reuters) - The U.S. government should
consider oil companies' safety records and drilling experience
before awarding leases to develop riskier offshore areas, the
co-chairs of the White House oil spill commission said on
 Some underwater oil wells, such as BP's (BP.L) doomed
Macondo, pose more risks for major blowouts than others, the
members of the panel said.
 The government needs to look at "linking a specific site
with the safety risks it imposes and who we are going to give
the responsibility of exploring and extracting from that site",
commission co-chair Bob Graham said at a panel meeting.
 An April 20 drilling accident ruptured the Macondo well,
pouring millions of barrels of oil unchecked into the Gulf of
Mexico for months.
 The seven-member commission, tasked with guiding the future
of offshore drilling in the aftermath of the BP spill, met on
Wednesday to discuss what findings the panel may include in its
final report to the public early next year.
 The other co-chair, Bill Reilly, said some countries
required companies to be certified based on their drilling
history before they could drill.
 Reilly said the commission should recommend that the United
States adopt a similar framework for offshore drilling.
 The panel also discussed regulatory and technical lapses
that may have led to the BP spill.
 Advances in oil drilling technology have outpaced drilling
safety technology, commission members said.
 The panel found that government regulation was inefficient
and the Interior Department had failed to manage the risks of
offshore drilling.
 "The government has not been able to effectively regulate
this industry," commission member Frances Ulmer said.
 Separately, Reilly applauded the Obama administration's
decision to lift its deepwater-drilling moratorium early.
Reilly had questioned the need for a lengthy drilling pause.
 "The rationale for lifting the moratorium is very good. I
think we need to get on with the business of resuming
responsible drilling," he told reporters after the meeting.
 He defended a commission staff paper released last week
that criticized the administration for not initially releasing
some of its worst-case spill models in the early days of the BP
 The White House has said it chose not to release those
models because they were incomplete. [ID:nN06272522]
 "We stand by our staff reports. Those are high-quality
reports, meticulously vetted for fact-based conclusions,"
Reilly said. "I don't think anything I've heard would suggest
the slightest alteration in any of the four of them."
 (Reporting by Ayesha Rascoe; Editing by Alden Bentley and Dale