Jan 11 The White House oil spill commissions's
final report on the BP Plc (BP.L)(BP.N) oil disaster released
Tuesday contained recommendations including raising the
liability cap for drillers and creating an independent safety
The accident on the Macondo well in the Gulf of Mexico
killed 11 workers and led to the worst offshore oil spill in
Following are the main recommendations released by the
panel on preventing similar accidents:
INDEPENDENT SAFETY AGENCY
Congress and the Obama administration should create an
independent safety agency within the Department of Interior
headed by an official shielded by political interference with
a fixed term. The official should have energy and engineering
experience and the agency should have enforcement authority to
oversee all aspects of offshore drilling safety.
DRILLERS SHOULD BE RESPONSIBLE, $75 MLN CAP RAISED
Drilling operators should be financially responsible for
the consequences of failure. The current $75 million cap on
liability for offshore facility accidents is "totally
inadequate and places the economic risk on the backs of the
victims and the taxpayers," the panel said.
The cap should be raised to place the burden of
catastrophic failure on those who will gain economic rewards
from drilling and to compensate innocent victims. "Provisions
can be made to ease the burden on small-scale operators ...
including mechanisms for sharing risk such as insurance pools,"
the report said.
U.S. SHOULD LEAD
Existing U.S. drilling regulations should be expanded to
address all features essential to well safety, and should be
updated to ensure safer drilling in all U.S. offshore
operations. The new regulations should be, at a minimum, at
least as stringent as those in peer oil-producing countries
such as Norway and the United Kingdom. The United States should
lead an international effort to develop global best practices
that can be adopted worldwide.
"RISK-BASED" REGULATORY APPROACH
The new regulations should be supplemented by a
"risk-based" regulatory approach that requires all offshore
drilling companies to show they have evaluated all risks
associated with drilling a particular well and are prepared to
address any and all risks pertaining to that well. This
approach has long been used in Norway and the United Kingdom.
CONSULTATIONS AMONG FEDERAL AGENCIES
Broader consultations among federal agencies, including the
Coast Guard and the National Oceanic and Atmospheric
Administration, prior to leasing and exploration to help
identify and address risks. Congress should amend the Outer
Continental Shelf Lands Act to provide NOAA with a more formal
consultation rule relating to environmental protection in
Department of Interior leasing decisions.
"Adequate and predictable funding for regulatory oversight
is essential for the reforms to be effective and to meet the
challenges of ensuring offshore safety and environmental
protection," the report said.
Budgets for the regulators that oversee drilling should
come directly from fees paid by the companies that are being
granted access to a publicly owned resource. Funding sources
could include a regulatory fee on new and existing leases or an
increase in the inspection fees already collected by the
Department of the Interior.
(Reporting by Timothy Gardner; Editing by Lisa Shumaker)