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BP, Halliburton, Transocean and industry practices blamed for gulf oil spill

January 5, 2011 |  2:44 pm

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The presidential commission examining the causes of the gulf oil spill Wednesday laid blame for the disaster on corporate mismanagement, inadequate government regulation and ultimately a lack of political will to ensure proper oversight of the oil industry as it pushed drilling rigs into ever deeper waters.

Releasing a key chapter of their final report on the April 20 blowout of the Deepwater Horizon well in the Gulf of Mexico, the commission recounted what are by now the well-known string of missteps that led to the deadly explosion and one of the world’s largest offshore oil spills.

But the group went on to issue a broader indictment, calling for the oil industry and the government to reform its practices, or risk a repeat of the BP disaster that killed 11 men and tainted the gulf with millions of gallons of crude.

“The blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again,” the report states. “Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur.”

The commission, established in May by President Obama to examine the causes of the blowout and make recommendations to prevent future spills, will issue its full report next week.

The findings could bolster a Justice Department civil lawsuit filed against BP, Transocean and other companies involved in the spill for violation of the Clean Water Act in December, as well as lawsuits that have been filed by gulf residents who suffered economic losses.

The new chapter reinforces that all the companies involved in the spill “are going to face substantial liabilities,” said David Uhlmann, a law professor at the University of Michigan who formerly headed the Justice Department's Environmental Crimes Section.

But Uhlmann said the report may also contain some relatively good news for the companies. Given what the commission has found so far, he said, it seems less likely that prosecutors will be able to show that the corporate behavior amounted to “gross negligence” on the civil side, or “intentional misconduct” on the criminal side, which could have exposed the companies to billions more in fines or increased jail sentences for key players.

“Certainly you had very highly trained professionals making decisions here,” Uhlmann said. “They may have made mistakes, or exercised poor judgment, but proving gross negligence may require more,” he said.

The report also provides fuel for those calling for tighter regulation of the oil industry, a move likely to be resisted by the the incoming GOP majority in the House.

The commission faulted not just the federal agency that oversaw drilling operations, but also political indifference.

“The root cause can be better found by considering how … efforts to expand regulatory oversight, tighten safety requirements, and provide funding to equip regulators with the resources, personnel, and training needed to be effective were either overtly resisted or not supported by industry, members of Congress, and several administrations.”

“The accident of April 20 was avoidable. It resulted from clear mistakes made in the first instance by BP, Halliburton, and Transocean, and by government officials who, relying too much on industry’s assertions of the safety of their operations, failed to create and apply a program of regulatory oversight that would have properly minimized the risks of deepwater drilling. It is now clear that both industry and government need to reassess and change business practices to minimize the risks of such drilling.”

Related:

Oil spill caused by a "confluence of unfortunate events"

Tests warned of cement problems before well blowout

BP well sealed, but gusher of uncertainty remains

-- Neela Banerjee and Bettina Boxall

Photo: The Deepwater Horizon drilling rig burns in the Gulf of Mexico on April 21. Credit: Gerald Herbert / Associated Press

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