Ben Bernanke was chair of the Federal Reserve during what became the worst financial crisis since the Great Depression. An inside look at the meltdown from the former Fed chair and his defense of bailing out Wall Street.
Tomorrow will mark one year since the BP-Deepwater Horizon oil rig exploded a mile off the U.S. Gulf Coast. The fire and explosion killed 11 men and touched off the nation’s worst oil spill. It took months to cap the well. By then millions of gallons of crude oil had gushed into the Gulf. The disaster caused untold damage to the environment and local economy. Tourism and fishing were hit particularly hard. But many of the worst fears did not come to pass. After a temporary moratorium, oil companies are being granted permits for deep-water drilling. A look at the resilience of an ecosystem and a region – and what still needs to be done.
- Joel Achenbach reporter, The Washington Post; writer for Achenblog; author of "A Hole at the Bottom of the Sea: The Race to Kill the BP Oil Gusher."
- Randall Luthi president of the National Ocean Industries Association and former director of the Minerals Management Service.
- Frances Beinecke president, Natural Resources Defense Council; former member of the National Oil Spill Commission.
Read an Excerpt from Achenbach’s Book
From The Hold at the Bottom of the Sea: The Race to Kill the BP Oil Gusher. Copyright 2011 by Joel Achenbach. Excerpted by kind permission of Simon & Schuster.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Tomorrow, the families of the 11 men who died in the BP oil disaster on April 20 of last year will pay tribute. Many who did not know the men will also mark the anniversary as day one of the nation's worst oil spill. We talk about that day, what's happened since in the waters, the region and the oil industry. Joining me here in the studio, Joel Achenbach of The Washington Post. He's also the author of "A Hole at the Bottom of the Sea: The Race to Kill the BP Oil Gusher." Good morning to you, Joel.
MR. JOEL ACHENBACHGood morning, Diane.
REHMGood to see you, and, Randall Luthi of the National Ocean Industries Association, good morning to you, sir.
MR. RANDALL LUTHIGood morning and thank you for the invitation.
REHMAnd joining us from an NPR studio in New Orleans, Frances Beinecke of the Natural Resources Defense Council. Good morning, Frances.
MS. FRANCES BEINECKEGood morning, Diane. Great to be here. Thank you.
REHMGood to have you with us. And, of course, we do welcome your calls. Join us on 800-433-8850. Send us your email to email@example.com. Feel free to join us on Facebook or Twitter. Joel Achenbach, if I could start with you, give us an assessment of the Gulf today, environmentally and economically.
ACHENBACHWell, I think Frances could answer the environmental question better than I can, although I will say that it's something that is still being closely assessed. What is the impact of all that oil, you know? It was millions of barrels of oil in some fragile environments in a deepwater blowout. There had never been anything like this before. This is an unprecedented event. And so the -- I know the environmental community and the scientists are studying what's the impact on the deep coral, the Lophelia coral, the marine mammals. There's still oil being cleaned up on the beaches. The other big issue right now that, I think, is the big issue here in Washington is, is it safe to drill again in deep water?
ACHENBACHAnd if we are going to go back into deep water, which seems inevitable, to what extent should the industry ramp up and make more robust its safety practices? Now, right now, the administration has given permits for 10 drilling operations in deep water, mostly resuming projects that were already underway. The industry -- and Randall can address this -- the industry obviously wants to go quicker. There's a backlog of applications. The Republicans and Congress want to fast-track the drilling permits.
ACHENBACHAnd, last week, the Natural Resources Committee passed a bill that would determine that if you applied for a permit to drill in deep water and the government did not say yes or no, up or down within 60 days, your permit would be automatically approved. And so the -- my book goes into, you know, what went wrong? I think the real question is, you know, are we ready to do this again? And have we learned all the lessons of the last disaster?
REHMJoel Achenbach of The Washington Post. His book is titled "A Hole at the Bottom of the Sea." Frances Beinecke, do give me an assessment of the environmental situation there in the Gulf today.
BEINECKEWell, I think the first thing to take note of, Diane, is that there is oil in the Gulf along the marshes. Yesterday, in Barataria Bay, they were literally taking out whole rugs -- I guess you could say -- of marshland, trying to get the oiled marshland out of the environment. And, of course, that area then is eroding and is seriously harmed. The fisheries in the Gulf are way, way down -- the fish catches from 2010. The oysters are significantly affected because of an attempt to push the oil back by letting -- bringing in a lot of freshwater. So there's grave concern about the rebound of the oyster industry, which is, you know, one of the most productive, famous parts of the shellfish and bountiest (sic) fish operations in the Gulf.
BEINECKEWhat's happened, though, is that 60 percent of the oil is in the marine environment. And, as Joel mentioned, there is long-term scientific studies to really assess what happened to that oil, not only where is it -- is it on the seabed, is in it in the water column -- but how it's affecting the marine life of the Gulf. Is it getting into the reproductive tracts? What's happening to future populations of marine life? And the answers to those questions are not yet known and, in some cases, won't be known for years. We found in the aftermath of the Exxon Valdez spill 20 years ago that there were still impacts, big, chronic impacts being determined 10 years out.
BEINECKESo even though, you know, the oil is not gushing forth, and it's not arriving on the beaches -- except in tar balls now -- it is in the marine environment. And fully understanding that impact will take time, and so, even though it's maybe not in front of our eyes, it's still under the sea. And it causes grave concern.
REHMFrances Beinecke, she is president of the Natural Resources Defense Council. Considering what you've just said, Frances, what's your reaction to the fact that the administration has issued these, as Joel put it, 10 permits for deepwater oil drilling?
BEINECKEWell, the thing that concerns me, Diane -- and I sat on the president's national oil commission for the last six months, looking carefully at what the operations of the Interior Department and the industry were in the Gulf operations. The commission made a series of recommendations on what kinds of safeguards and oversight and enforcement needed to be put in place to ensure that offshore operations were as safe as possible. Those recommendations have not been adopted.
BEINECKEThe Interior Department has begun adopting some, but there are many more. Congress -- there were many recommendations that required congressional action. I think it's unconscionable, actually, for those bills that passed the Natural Resource Committee last week to move forward without having Congress act on the safeguards that are critical to ensuring that these operations are as safe as possible. So I am concerned about those permits because the safeguards that were recommended have not yet been adopted.
REHMAnd turning to you, Randall Luthi, how concerned are you about the safety of new drilling programs?
LUTHIWell, thank you. And, Diane, I also wanted to thank you for your remembrance of the 11 who lost their lives. Far too often, that was lost in the immediate effect of the spill, and, you know, that truly is the long-term effect. Those families, the friends and loved ones are -- will always feel that pain. I, of course, might have a slightly different view than at least one of your guests, but I'm glad to share that with you. Industry really went into action after this spill. I mean, there's nothing more of a wake-up call than any kind of an accident, whether it be a well or whether it be a coal mining accident. The industry, I think, did a great job in terms of a top to bottom look at what are we doing right, what's going wrong, what can we improve.
LUTHIAnd the mere fact that Congress hasn't acted on some of the recommendations doesn't mean that things haven't been done. Example, just on the industry side, several task forces met nearly -- well, all last summer and looked at what are the containment options, how are we going to contain a deepwater well should a blowout -- should this happen, occur. They looked at the response actions, which is how do we best clean the oil off the surface, how do we use dispersants? Because that certainly became an issue during the cleanup, and within industry itself, came up with several, I mean, I will say scores of recommendations that they've already implemented. Yes, I think it's time to start moving back into drilling and getting those permits.
REHMSo, from your perspective, the time has come to move forward on those permits and to begin that offshore drilling again.
LUTHIYes, it has.
REHMHow do you see it, Joel Achenbach?
ACHENBACHWell, there's no question that the industry got a wake-up call last year and that when Randall says that they've done a lot of work to look at their operations, well, yeah, given that this cost BP $40 billion, which, even at the scale of the oil and gas industry, is a lot of money. And, yeah -- and people lost their lives, and the industry feels that loss. So -- but the question remains, is -- this is a complex technology that we saw last year failed in a complex way. There were multiple factors in -- as Frances knows from working on the oil spill commission, multiple factors went into this catastrophic failure. There are technical factors. They were human cultural factors in terms of the communication flow from Houston to the rig back to Houston.
ACHENBACHMany different companies were involved. There was a misinterpretation of a pressure test at the last minute. And hovering over it was also that BP was very conscious of its cost and was -- wanted to finish this job and move on to the next project. So the question, I think, that maybe Randall could address is, first of all, what has the industry done to ensure that decisions are not made with cost outweighing safety considerations? Secondly, in a more nuts and bolts issue is, if you had this same blowout again, the industry is prepared to act more quickly. It took 80 -- as my book details, where day by day, the struggle to cap this well, it took -- it was day 87 before they managed to seal the well on July 15.
ACHENBACHIf this same situation happened again, the industry says -- and they've told me -- give us 10 days, we can solve this. But that presupposes that the disaster they're facing is precisely the same problem, and so they're kind of geared up to fight the last war. What happens if the blowout preventer is on its side? What happens if the blowout preventer sinks into the muck or you have multiple fissures from the bottom of the Gulf?
REHMJoel Achenbach, he is with The Washington Post. His new book titled "A Hole at the Bottom of the Sea: The Race to Kill the BP Oil Gusher." When we come back, we'll talk about some of those cost versus benefits and how long it would take. Stay with us.
REHMAnd, of course, the anniversary, the one-year anniversary of the BP oil spill is tomorrow, an anniversary marked with tragedy, both in human terms and in ecological terms. Here with me in the studio, Joel Achenbach, reporter for The Washington Post, Randall Luthi, he is president of the National Ocean Industries Association, former director of the Minerals Management Service. And on the line with us from New Orleans is Frances Beinecke, president of the Natural Resources Defense Council, a former member of the National Oil Spill Commission. We are going to open the phone shortly to take your calls, your email.
REHMThere is a first email which sort of puts into perspective some of the questions that Joel raised just before the break about cost versus safety, the question about how long it took BP to get to finally capping the well, which took 87 days. What would happen, Randall Luthi, if such a spill were to take place today? Has BP learned from this experience?
LUTHII think not only has BP learned, but the entire oil and gas industry has learned as well. Joel pointed out that, you know, if it was an identical spill, it would be probably the easiest accident to take care of in the near future. And that's why industry started looking at what else could go wrong. What else can we do? And the industry, I think, has done a remarkable job in preparing for what you cannot predict, which basically...
REHMHow can you do that?
LUTHIWell, you -- some of it, you sit down and you do some what ifs, what ifs, what ifs. If this went wrong, what would you do? If this went wrong, what would you do? So those kind of battle plans start to be laid out with industry. That's not the -- it becomes part of the response plans. It becomes more internal with their safety plans.
BEINECKEDiane, may I interject something here?
REHMSure. Go ahead.
BEINECKEI just -- okay, thank you. I think that what it's important to realize is in our analysis -- the National Oil Commission's analysis of what kind of safeguards were in place, what kind of practices the industry had in the United States compared to practices in other countries, for example, the U.K. and Norway. The United States' industry practices on safety are not up to the best international standards. And one of the things that we recommended is that there need to be international standards. These are global industries. Why would companies operate one way in the North Sea and a different way in the Gulf of Mexico? This is an industry that needs to be regulated.
BEINECKEThere needs to be oversight, adequate oversight by the responsible agency, the Interior Department, which Randall, I believe, used to work for, heading the agency responsible for offshore oversight. These systems are not in place. And although there's been quite a significant effort on the part of the Interior Department over the last year to put those systems in place, that still needs to occur before you can assure that operations are safe in the Gulf. And the other thing, I think, that's important to remember is the oil in the Gulf is a public resource. It's a resource of the American people that the Interior Department is responsible for.
BEINECKEIndustry has to earn the right to operate out there. It's not theirs, and that's also true of the Gulf. It's a public resource that the Interior Department holds as the steward for. So we have to assure the American public that these systems are in place and that the government has the full responsibility to ensure their -- the industry operates as safe as possible.
BEINECKEIt's not just up to the industry.
REHMFrances, at the time of the oil spill, an awful lot of focus was placed on the Minerals Management Service because they did not seem to be doing the kind of oversight regulation you talked about. Are you satisfied that the proposed reorganization of that agency is going to be able to look more carefully, more closely and more dynamically at what's going on?
BEINECKEWell, it's a good question, and I think they have started the process. But they have to have the structure and adequate resources to do it. Basically, over 20 years, the Interior Department has been completely outgunned by the industry and prevented from having the resources to really do the job that's required. That still needs to happen. That requires congressional action. We recommend that that there be an independent safety authority that provides safety and enforcement over the industry. That step has not yet been taken. So I think Secretary Salazar, Director Bromwich have done a lot to gear themselves up, but one of the reasons that it took a while for them to review the permits was to ensure that they had the systems in place.
BEINECKEI think there is still a long way to go. And they have to have the adequate resources and the technical capacity to review what the industry is proposing. They don't have that yet, and that still needs to happen.
REHMSo, in the meantime, Joel, there's a lot of lobbying going on. The oil industry wants to get back in there to do its job.
ACHENBACHYeah, there's money out there in the deep water. There's resources. And we're -- we are an oil-intensive economy. That's where the oil is. I have not talked to anyone in government who realistically thinks we're not going to eventually drill in the deep water because that's just where the resource is. But Randall mentioned earlier that the industry has looked closely at all the things that might go wrong. And you asked the question, well, how do you figure that out? You look at what happened with Fukushima Daiichi nuclear power plant. I mean, that's a tragedy there where a complex technology -- it had redundancies and backups and -- but in a single event, all the backups were taken out.
ACHENBACHSame thing happened with Deepwater Horizon a year ago, where -- I mean, this was not something that was supposed to be able to happen. There was so much hardware and so many protocols that were supposed to stop this from happening. So I think the industry needs to increase the level, I guess, of trust and maybe credibility in the industry that it has figured out this technology in deep water, which is a different world. It's a completely different environment in -- a mile down.
REHMAnd some people have said, Randall Luthi, that deepwater drilling shouldn't happen at all because there is no way to truly figure out what could go wrong.
LUTHIAnd, again, that's certainly where the debate -- one of the things you have to realize is you always want to eliminate risk, no matter what the industry is, no matter what the -- look at the airline industry. Certainly, there hasn't been an industry that's probably been more regulated and continues to evolve with safety measures. And I think the same is true for any extraction, as well as any industry. You learn from the mistakes, as bad as they could be. You move forward. You keep doing what you can do and, certainly, in increments. One of the things we haven't talked about -- although, Joel, God bless you, you did at least mention it -- frankly, you know, there's -- you -- there is a system where you look at the risk, you try and eliminate it to the best you can.
LUTHIBut you're also providing a reliable source of energy for our families, our economies, and a reliable source of energy that everyone says is going to be around for at least the next generation or so, even as we move towards more renewables.
REHMCritics of the oil industry who are critical of the permits that the oil industry is seeking offshore say that there are enough permits out there, there are enough places to drill that already have such permits that the oil industry has not taken up. Why is that?
LUTHIWell, I can answer that, I think, relatively simple. When you get a lease as a company, it's -- I would akin it to a fishing license. You have the opportunity you have now purchased from the United States, from the people of America, the right to look in a certain area for oil and gas. That does not mean oil and gas will be found, but you have that possibility to look there. So that's what it is.
REHMSo why hasn't the oil industry taken advantage of those leases it already has, rather than pushing for offshore drilling, which does, as you've already said, have the kinds of risks you cannot imagine?
LUTHIOn the very leases you talk about, many of them are offshore. Most of them are offshore. Many of them are deep water. A 10 -- a deep-water lease is generally for a period of 10 years. And you're going to spend the first three or four years doing seismic work, looking to see what's there, see what kind of infrastructure needs to be built. Just because you haven't spotted a well, just because you don't have oil and gas coming out, doesn't mean you're not working that lease. And I think that's one of the things that isn't represented particularly well. There's a lot of work that goes before you actually get a drilling rig out there, ready to go.
REHMAnybody listening to, watching all the debate around this knows that Transocean Ltd., the owner of the Deepwater Horizon rig, paid its executives bonuses for its "best year" in safety performance. Surely, that was not only a PR blunder, but truly offensive to the people who live in that area, to the families of those who lost their lives. I mean, if that is an example of how people learn by mistakes, wow.
LUTHIAnd you're right. Transocean didn't talk to me or several other people about these decisions, so I'm really not qualified to comment on it. The public...
REHMWhat was your reaction?
LUTHIThe public perception -- I was surprised, to say the least. I thought this certainly, it is...
REHMI hope you were as shocked as I was.
BEINECKEIt's shocking. It's shocking.
LUTHIAnd I was pleased to see that the -- those who received the bonuses, you know, decided to put that in a fund towards the victims. But it should have been handled...
ACHENBACHThe day of the blowout, four executives flew out to the rig -- two from BP and two from Transocean -- and they were there to commend the crew and the team out there for their safety record. And they came with a lot of talking points -- which I document in the book -- that -- and the talking points were focused on personal safety issues, such as slipping and falling and hand injuries. And what's clear is that the industry was focused a lot on, you know, wearing hard hats and steel-toed boots and wearing your gloves and wearing your goggles and your ear protectors, but had not looked at the systemic risk of the whole operation.
ACHENBACHAnd, you know, they were -- the executives were playing around on a simulator, pretending they were in a hurricane at about 10 minutes till 10 that night on April 20, on the bridge of the Deepwater Horizon, when an actual disaster exploded around them.
REHMWhat do you mean, playing around with a simulator?
ACHENBACHWell, there's a simulator on the bridge that allows you to see how you would navigate the rig, which is a ship...
ACHENBACH...if you were in 70-mile-an-hour winds and a heavy current. And so they were dealing with a simulated crisis on the simulator, and then they heard the -- they felt the tremble, the trembling of the entire rig. They felt the -- heard the hiss of the gas and then, boom.
REHMHis new book is titled "A Hole at the Bottom of the Sea," and you're listening to "The Diane Rehm Show." Frances.
BEINECKEWell, I think that one of the things that Joel said, it is that there are really systemic management issues on the operation of those rigs, and this is a very sophisticated industry. Their engineering prowess is just really extraordinary. But the same investment that was made in actually drilling down, in this case, 18,000 feet under the seabed was not made in the systems, the operational safety systems and the safety culture on that rig. And that's what really needs to change dramatically, and it's not clear that it has changed.
BEINECKEYour example, Diane, of the bonuses is a very good one. This is an industry that needs to be prepared for the downside because the downside can occur at any time. And from our research over the course of the commission -- and it sounds as though Joel's research also -- that is just not -- that's not the situation now. The preparation just is not there.
REHMFrances, tell me how the drilling moratorium has affected the people who live there in the Gulf region.
BEINECKEWell, you know, the way I look at it is one well, which had this tremendous accident, in essence, closed three industries: the oil industry, the fishing industry, the tourist industry. Hundreds of thousands of people across the Gulf Coast cross those four states. Lives were sent into disarray, no matter which of the industries they worked in, and it's taken literally nearly a year for each of those industries to begin to get back to work. So the moratorium put a pause on the offshore industry, which it should have, because Interior, the responsible agency, had to be sure that they could provide the oversight and review that the public expects of them.
BEINECKEIt took them a while to get those systems in place. They think they're in place. We think that there's still more to be done. But, you know, the president asked for and got from BP $100 million -- I believe it was -- to compensate the offshore oil workers who were affected by the moratorium. There's the fund that -- actually a Feinberg fund which has loads of problems. But, you know, there -- this was a pause that needed to happen. This was a serious accident. It affected four states, thousands and thousands of people. The marine environment was put at tremendous risk. You have to take a pause and figure out, how can we do this better? And that's what the moratorium did.
REHMAnd you talked about the Feinberg fund that has lots of problems, that $20 billion fund set up by BP to compensate people for losses. What's going on there? What is the problem, Frances?
BEINECKEWell, you know, we, at the commission, actually didn't look at this in as much detail 'cause it was going on as we were doing our investigation. But for every story you hear of someone getting compensated, you have a parallel story of some -- a fishermen, a shrimper -- with the exact same experience, who didn't get the compensation. And from the public experience along the Gulf Coast, they don't understand it. They can't understand why their next door neighbor got compensated and they didn't. And it's a system that just doesn't have transparency and clarity. And there are, you know, I think, 170,000 claims that have been put in place, something like that. $7 billion have been paid out. There still needs to be tremendous work done to ensure that the people of the Gulf are fairly compensated.
REHMAnd, Joel, what's going on in Congress with regard to drilling?
ACHENBACHWell, the Republicans want to speed it up. They want to -- their attitude is we should be looking at the Atlantic Coast, the Pacific Coast, the Arctic and, certainly, into the Gulf. And they're more enthusiastic about getting back into the deep water. The administration is going a little slower, but they are clear that they -- that that's the direction we're going to go, that the deepwater drilling will happen again. There's a dispute over the timeline of how quickly you should approve these permits. And I think that there are -- there -- as Frances said earlier, I mean, the oil spill commission did -- I thought, just as an observer, as a newspaper reporter, they did remarkable work.
ACHENBACHThey published a book about their findings, which is worth reading for anyone who is interested in this topic. But their recommendations have not been adopted yet.
REHMJoel Achenbach, Randall Luthi and Frances Beinecke, when we come back, we'll open the phones. I look forward to hearing from you.
REHMAnd we're back. Here's a question posted to our website, "We are being assured that a similar accident could be handled better by the industry due to their experience. But what about a similar accident occurring in a place like the North Sea, the Arctic Wildlife Refuge, where simply putting the recovery teams in place might take a week in itself, and Mother Nature may not be as kind to the efforts to clean up a mess?" What do you say to that, Randall?
LUTHIWell, certainly, the North Sea is already proving itself, and that's other countries that I know somewhat about, but not a whole lot about. One of the things, as you move into these areas that haven't been explored, that promise great potential, is that industry has to bring in the equipment and the response capability as well. That certainly is worthy of discussion. We certainly think it can be done. It should be done. It will be done. But it -- what it really takes -- and I think everyone, I think, on your panel today has kind of touched on it. This is a very technologically -- industry, a very technological industry. It's almost Space Age in many ways.
REHMIt's also technologically challenged, isn't it?
LUTHIAbsolutely. And the best way to make something work, make it as safe as possible, is cooperation between the government and industry -- not a cozy relationship -- but cooperation where you're able to share this kind of technology, where you can discuss what kind of teams you should bring in, what kind of response vessels, what will work, what won't work.
LUTHIAnd, now, I see Joel waving his hands, so that must mean he's...
REHMYeah, he is waving his hands.
LUTHIHe must have something important to say.
ACHENBACHI'm sorry, Randall. I'll calm down over here. No.
LUTHIYou kicked me out.
ACHENBACHI wrote a book about this. I mean, this is what my book is about. It's about crisis management. It starts on April 20 with this disaster, and it explores the relationship between the government and BP, between the public and private sectors, as they attempt to solve a problem that no one has ever faced before. And I don't think it's necessarily reassuring reading for anyone because, you see, it's not just about the hardware. It's about knowing what is this problem we're facing. BP did not take a measurement of the flow rate of that well. And because of that, they underestimated severely how much oil was gushing out of the Macondo well.
ACHENBACHAs a result, they tried several maneuvers early on that didn't have a chance of working. I mean, they tried to activate the blowout preventer, didn't work. They tried to lower cofferdam over the leak, clogged with methane hydrates because that's what happens chemically 5,000 feet down. They tried to top kill with mud, didn't work. The well just sort of, you know, laughed it off. And the government was in this incredibly awkward position of not really having the tools itself to try to solve this problem.
ACHENBACHSo Obama sent Steve Chu, the energy secretary, down to Houston. Chu brings along a handpicked group of scientists, kind of a motley assortment of folks, and they basically arrived in Houston to say, okay, we're from the government. You know, we're going to help solve this problem. And it was kind of a bureaucratic mess there for a number of weeks. And I think that there's no question, the event last year is going to make the next event potentially easier to deal with. But...
REHMEven if it...
REHM...were to occur in the Arctic Wildlife (unintelligible) ?
ACHENBACHThat's a whole different challenge, whole different ball game.
BEINECKEOkay. So the Oil Commission looked specifically at the Arctic. The Arctic is a dark, forbidding marine environment. It's dark half of the year. It has tremendous fog, tremendous storms. It's a very, very difficult environment to operate in. And there is no response capability in the Chukchi Sea where Shell wants to operate. The closest Coast Guard facility is 1,000 miles away. We identified a major response gap up there, as well as a major research gap, because before you go in to the Arctic environment, if you should -- which we would not be in favor of at all -- you have to understand that marine environment.
BEINECKEWhere are the areas that are most fragile? Where are the areas that are most productive? Our largest commercial fishery is off the coast of Alaska. Are we going to jeopardize that? We need more information to be able to evaluate that, and that just doesn't exist right now.
REHMAnd where is that information likely to come from, Frances? Who's doing it?
BEINECKEWell, there needs to be -- actually, the National Oceanic and Atmospheric Administration in partnership with Interior are doing research now, trying to figure out where the research gap is. There are many agencies sort of focused on addressing that problem. That's on the research side. But let's just look at the response side. In the Gulf of Mexico, where we have the most sophisticated oil and gas industry infrastructure, they were, as Joel was describing, incapable of controlling that well for nearly 100 days. What would happen in the Arctic where there is no oil and gas infrastructure anywhere in the region? It just -- it doesn't exist now.
BEINECKESo it would take some time to get to the point of convincing the public that the industry was ready to go in there. And I think the other thing to recognize is there's tremendous interest on the part of the oil industry across all of the Arctic countries -- Russia, Canada, Norway, the U.S. -- to go forward in the Arctic. The Commission strongly recommended that international standards, that the international regulators create operating standards that everyone agrees to before any company begins to think about going into that very fragile, forbidding region.
REHMAll right. We have a caller in Tampa, Fla. Good morning, Mark. You're on the air.
MARKThank you. Just a few questions. Recently, the Boston Herald released an article stating that (word?) with the Thomas Jefferson Institute for Free Expression gave Obama administration, BP, a pretty negative view for muzzling a lot of the subsequent research that's come out. I know, at one point, Sen. Bill Nelson down here in Florida took a crew of media people to fly over the Gulf. And Department of Homeland Security said you can come, but you can't bring the media.
MARKAnd, just recently, there's been a pretty big uproar here, especially in the Tampa-St. Pete area because they're doing a lot of research on dolphins, where they're seeing a 200-percent increase -- I believe it was -- in the number of dolphin deaths for various reasons. And I'd just like the panel to discuss or talk about, is there a chilling effect on behalf of BP and the administration and what they can expect in the future if this kind of behavior both on behalf of agencies as well as corporations (unintelligible) …
REHMLet me understand your question. You're asking about the deaths of the dolphins and whether...
REHM...and whether the causes for those deaths might be being covered up?
MARKI wouldn't say covered up. But the several researchers in USF, University of South Florida, have been admonished by various administrations, agencies, and I'm not going to go into specifics 'cause I, frankly, don't know. But I've read several articles here that discussed -- they admonished, was the word the article used, researchers that were proposing theories as to the reasons for this increase of deaths.
MARKAnd because they didn't have evidence, they -- well, said, you can't or shouldn't say that.
REHMAll right. Frances Beinecke.
BEINECKEWell, there's no question that there's an unusual mortality event going forward in the case of dolphins. Dolphins, baby dolphins are washing up across the Gulf Coast in unprecedented numbers. And this is very, very concerning. It's very important that the scientific community has access to and can do the full scientific analysis to determine what the cause of that mortality is and whether it is, indeed, related to the oil spill. So transparency, commitment to long-term scientific monitoring, adequate research dollars are all very, very important parts of the equation.
LUTHIDiane, this is Randall. I just want to comment as well. And, Frances, you brought it up earlier that the government and BP are currently in the process of a natural resource damage assessment, which is what's designed to look at the effects, short and long-term effects. I'm old enough, either fortunately or unfortunately, that I was actually on the government's side during the Exxon Valdez and participated in some aspects of the natural resource damage assessment. It's important that that is a process that's transparent. It's important that it's a process that is cooperative. And, frankly, it gets down to see the long-term effects because that's exactly -- I think everybody, at the industry and otherwise, we need to know that type of information.
REHMAll right. To Madeline in northern Michigan. Good morning. You're on the air.
MADELINEYes. I wanted to ask why nobody is mentioning the fact that the workers -- to the workers in about the second week -- first or second week of April were brought up crumbling pieces of the shutoff valve that was supposed to stop the whole business and brought it to their supervisors who told them that there was too much pressure coming from headquarters to get -- they were too far behind. They couldn't take time to repair the shutoff valve. And nobody else -- I've only heard it mentioned twice on CBS Television.
REHMAll right. Joel Achenbach.
ACHENBACHThere were a lot of anomalies with that operation, and that was a -- the well from hell. It took months longer than it was supposed to. I will note that people on the rig were in the line of fire and certainly did not want to be reckless with their own lives and with their rig and with their -- the lives of their co-workers. The striking thing to me is that so many experienced people managed to, up into the very moment of the explosion, not realize how close they were.
REHMThat something was about to happen.
ACHENBACHI mean, the offshore installation manager, the top Transocean person, was in the shower. You had these BP executives who were at the simulator in the -- at the bridge. You had people sitting in their beds reading a book or talking to their wife on the phone or watching TV. And these were veteran people who knew what they were doing. So the question is how do you get to this point, where so many experienced people are sitting there right on the precipice of disaster and don't realize it?
ACHENBACHAnd the caller, Madeline, brings up the issue that there was this anomaly with stuff coming out of the well. But that's part of a long list of strange things associated with this well. There is a lot of pressure to finish the job and move on because of how expensive it is to lease a rig. It's $1 million a day. And they really keep track of how, you know, down to the minute, how long does it take to drill 2 1/2 miles below the surface of the bottom of the Gulf? So did they rush? Were they careless? So many factors went into it.
REHMHow do you respond to that, Randall?
LUTHIWell, on specifics, I -- frankly, I wouldn't know about the crumbling. I mean, I read the reports and various reports and sometimes very contradictory reports as well. I think we come back to the fact that the commission said that -- even the commission said that this was an avoidable accident. I usually use the term, a tragic avoidable accident. And, therefore, human error is a part of it, without a doubt, possibly the major cause of it, as they get to the bottom of it, an avoidable accident that, by its term, can be avoided. And that's what we need to -- we, as industry, I think, need to focus on. How do we avoid that?
REHMAnd that is precisely what Christine in Connecticut writes about. She says, "I'm outraged that drilling companies are moving quickly without accountability for the environmental disaster. The environment and wildlife always pay dearly. How is it possible that oil makers allow budget cuts in any EPA resources? EPA funding should be increased in order to protect our very fragile planet." How is the EPA involved here, Joel?
ACHENBACHWell, I think that the EPA is not the frontline agency on this.
ACHENBACHIf the question is, are there cuts in the programs that affect drilling, I believe that there is going to be some additional money for the Bureau of Ocean Energy Management, Regulation and Enforcement, known as BOEMRE, which is the successor to the MMS that Randall used to run.
LUTHINotice that Joel used that term, and I didn't.
ACHENBACHOkay, okay. Well -- but the question is, is there enough resources to allow the government regulators to be on a level playing field with the industry?
REHMAnd you're listening...
BEINECKEAnd I think the answer to that is no.
REHMYou're listening to "The Diane Rehm Show." You would say no, Frances.
BEINECKEI'd say no. I mean, I think that they've asked for additional resources. They've gotten 50 percent of what they asked for. It's not only the resources. It's then hiring the expert staff -- the technical experts, the petroleum engineers -- who can go side-by-side with the industry and not have all the cards in the industry's deck, which is the way it's been for the last 20-plus years. So I think that the email that you got is exactly right. Why is it that the environment is always second to our energy appetite? We need to even those things out. And, I think, you know, first and foremost, we need to go to a cleaner, more efficient energy economy where our demand for oil decreases because this is a no-win going in the direction we're going (unintelligible)...
REHMAll right. So, Randall, if you can, explain for us the reorganization of the Minerals Management Service and how it could play a role in preventing another disaster like this.
LUTHIJust one thought on Frances' thought. Again, I think that comes back to why I emphasize that cooperation and sharing technology is so important between the industry and government. While I was at MMS, you know, we -- you're bound by the budgets you're given and, you know, what Congress and the administration provides. So you...
REHMBut there was more to it than that. They were simply the handing out of licenses. (unintelligible)
LUTHIAbsolutely not. Absolutely not.
REHMWell, we heard an awful lot to that effect, that there was that revolving door, that there was that opportunity for a company simply to ask for and receive that kind of license.
LUTHIOkay. And, well, again, what kind of license are you talking about? Are you talking about an exploration plan permit or an application permit to drill?
REHMWhatever. Whatever they wanted, they got from MMS.
LUTHIAre you looking for a release?
BEINECKEAll of the above. All of the above.
LUTHIAnd I don't believe so, Frances, and I think you know that as well. MMS has a bunch of qualified -- now, maybe not enough, and I would agree with that -- but it's extremely qualified and dedicated people, both to the environment and to this nation's need in -- to wisely develop its resources.
REHMSo is reorganization going to help?
LUTHITrying to get me back on point, aren't you, Diane?
LUTHII appreciate that. You know, MMS had reached the point, frankly, where the public perception was so great that it was an agency that wasn't working. There was really no other choice, I believe, from a managerial point of view, not to make some kind of a change. The reorganization is basically into three agencies out of one. And I might add, there's about 1,700 employees, you know. It's a relatively medium-sized agency as far as a government. One side is the revenue side, which collects the bonus bids.
REHMAnd they're being the problem.
LUTHIWell, while I was there, that's certainly where a lot of the public focus was. Were we collecting the revenues appropriately? Frankly, the oil and gas industry, through the revenues, is only second to the American taxpayer in the amount of revenue that comes into the nation.
REHMAnd Randall Luthi has the last word. He's president of the National Ocean Industries Association, former director of the Minerals Management Service. Frances Beinecke is president of the Natural Resources Defense Council. Joel Achenbach is a reporter for The Washington Post, author of the new book, "A Hole at the Bottom of the Sea." Thanks for joining us, and thanks for listening. I'm Diane Rehm.
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