Factbox - U.S. lawmakers, groups react to spill report

Tue Jan 11, 2011 5:46pm EST

(Reuters) - A special presidential commission on Tuesday blamed the massive BP oil spill on government and industry complacency.

Here is reaction from U.S. lawmakers, oil industry trade groups analysts and environmental organizations to the panel's findings.

AMERICAN PETROLEUM INSTITUTE:

The American Petroleum Institute criticized the panel's report for casting doubt on the entire oil industry based on a single accident.

"This does a great disservice to the thousands of men and women who work in the industry and have the highest personal and professional commitment to safety," said API Upstream Director Erik Milito.

"We hope that the administration recognizes the work already done and the need to rapidly restore vibrancy to the nation's offshore oil and natural gas production program," Milito said. "Both the nation's energy security and our recovering economy demand it."

REP. EDWARD MARKEY OF MASSACHUSETTS:

Democratic Representative Markey said he will introduce legislation to implement the spill panel's recommendations.

"The spill commission's independent assessment of America's worst oil spill must lead to reforms, and today's release of the commission's report needs to end the objections that Republican leaders in Washington have raised to legislative action," Markey said.

"Some key Republican leaders previously have said that we should wait for the results of this investigation before passing legislation to respond. The results are now in and now it is time for action," he said.

SEN. ROBERT MENENDEZ OF NEW JERSEY:

Senator Menendez said he plans to introduce legislation to hold oil companies accountable for their spills. His bill will remove the current $75 million liability cap for oil companies related to the economic damages caused by a spill.

"We cannot continue to coddle oil companies by protecting them when they destroy livelihoods - that's not a privilege given to any individual or small business. Holding oil companies accountable for the damage they cause not only protects taxpayers and coastal families, but it also gives those corporations incentive to actually focus on the safety of their drilling operations."

NATURAL RESOURCES Defence COUNCIL:

"The industry sacrificed safety to try to save money and time. The watchdogs we counted on to keep us safe didn't have the tools to do the job. And neither had any idea how to stop the gusher once it blew," NRDC Executive Director Peter Lehner.

"We can't undo the damage or bring back the lives we've lost, but we can learn from our mistakes. This report is the right place to start," Lehner said.

"The industry must end its culture of complacency and start putting safety first. Congress must strengthen the protections we need to keep our workers, waters and wildlife safe. And the administration must make sure those who enforce vital safeguards have what they need to do the job," he said.

PEW ENVIRONMENT GROUP:

"The commission has shown us that the rules governing how we produce oil and gas off our coasts are dangerously outdated, and oversight of drilling has been extremely lax," said Marilyn Heiman, director of the Pew Environment Group's offshore energy reform efforts.

"Funding for more inspectors and training is crucial to preventing future spills. Even during a time of budget reductions, this is not a place to cut corners when worker safety and the health of our oceans are at stake," she said.

JOHN LICATA, CHIEF INVESTMENT STRATEGIST AT NEW YORK-BASED

BLUE PHOENIX INC.:

"These new recommendations are coming at a very bad time. These recommendations will likely stall the U.S. economy's recovery and force crude prices into triple-digit territory, as well as push gasoline prices to well over $4.00 per gallon. Only well-capitalized firms will be able to operate in the Gulf under these recommendations and they could lead to a lot of M&A as smaller companies either opt out or are bought. There will be a concentration of large companies in the Gulf as a result. This is a negative for the industry."

STEPHEN JONES, VICE PRESIDENT, PURVIN & GERTZ,

INTERNATIONAL ENERGY CONSULTING FIRM:

"It's hindsight. And it's important. And it's part of the process. The industry's going to have to continue to live with the repercussions from this event and moving forward in shoring up management processes as well as technical aspects of drilling in the deepwater."

MARK ROUTT, SENIOR STAFF CONSULTANT, KBC ADVANCED

TECHNOLOGY, HOUSTON:

"It probably is not going to have any effect on mechanical design or specification. I would guess these regulations are going to be more operational, that is, human work practices, rather than technical. It's not like you're going to redesign a new pump or new stress analysis on a seal for the platform. That will take time. Operational things should theoretically be able to be put into practice with minimal training in a much shorter time period."

BRUCE BULLOCK, DIRECTOR OF THE MAGUIRE ENERGY INSTITUTE,

SOUTHERN METHODIST UNIVERSITY, DALLAS:

"I think the call for an independent regulatory authority is a good one. That's kind of the North Sea model that has served the U.K and to some extent, the Norwegians. In terms of the systemic issues, I'm not sure I would paint as broad a brush as they did. I would not brand the whole industry. I think you have to look at each individual company's operating practices and determine whether they have the same issues."

CANDIDA SCOTT, IHS CERA IN HOUSTON:

"It is still not clear from the government report how liability will increase. There is uncertainty surrounding the onus and responsibility of the self-regulating entity, an independent agent, and the drilling companies themselves. The recommendations made in the report are welcome but these will be hard to transpose into specific tasks.

"There has been a lot of talk about the liability cap and no single number was given today. I think once we have a figure, whether it is the most commonly talked about $300 million cap or not, then we can translate this into how much upstream costs will be increase."

PAUL SANKEY, MANAGING DIRECTOR, DEUTSCHE BANK OIL, EQUITY

RESEARCH:

"We think the level of (US offshore) activity is going to be by definition lower, and that you'll never see the peak from before the accident. The broadness of these recommendations and lack of specifics will delay activity."

AL TRONER, PRESIDENT, HOUSTON-BASED ASIA PACIFIC ENERGY

CONSULTING:

"I believe that the crux of the problem is to have the current offshore drilling oversight bodies do their job and oversee operations - they apparently have not been doing a good job at that, rather than adding more government agencies. There is no guarantee that another government agency would do any better than its predecessors - and of course the last thing we need now is another ineffective government agency. Why does the current government seem to believe that more government is better or more effective government?"

GREG PRIDDY, ANALYST, EURASIA GROUP IN WASHINGTON D.C.: "The most likely outcome of all this is that nothing happens and anything that does will be very limited. There doesn't seem to be the impetus to do anything right now, regardless of the commission's findings.

"No one is looking at a $5 billion liability cap anymore like some Democrats were discussing in the summer. I see no evidence the new Republican House leaders are going to have this high on their agenda."

(Reporting by Tom Doggett; Editing by Lisa Shumaker)