E2 Primer: Everything you need to know about the oil spill commission’s report

What is the oil spill commission and why does it matter?

First, some background. The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling was formed by President Obama in May, just a month after the start of the massive Gulf oil spill.

The commission was charged with investigating the cause of the spill. Specifically, the commission was asked to determine what caused the blowout of the Macondo well and the resulting explosion aboard the Deepwater Horizon oil rig; what role individual companies played in the disaster; and whether the federal government’s response was adequate, among other things. The commission was also asked to develop a series of recommendations.

The commission began its work at a time of tremendous uncertainty about the future of offshore drilling. The oil spill unearthed a slew of regulatory and industry failures that the Obama administration moved to quickly address by restructuring the arm of the Interior Department that oversees offshore drilling. The commission was charged with determining what additional regulatory changes were required and whether the early efforts of the administration to address problems that emerged in the aftermath of the spill were adequate.

After months of work, six public meetings and a hundreds of hours of behind-the-scenes investigating, the commission released its final report on Tuesday.

The report comes at a time when the oil spill, which was one of the biggest news stories of 2010, has all but faded from the country’s radar. At the same time, efforts to pass broad oil-spill response legislation in Congress fizzled, even though the House passed its version of such a bill.

What does the oil spill commission’s report say?

In short, the commission found “systemic” problems within the oil industry and the federal government that, if not addressed, could lead to another massive spill.

The commission laid out a series of specific recommendations that will make it less likely that another spill will occur. They include giving the Interior Department more time to review offshore drilling plans; implementing additional separations between the bureau within the Interior Department that collects revenue from offshore drilling and the bureau that ensures drilling safety; and giving inspectors more training and better salaries. The commission also recommended that the oil industry set up its own organization charged with ensuring drilling safety.

How will the recommendations be implemented?

Here is where things get interesting. The oil spill commission has no authority to implement its recommendations — that’s up to Congress and the Obama administration.

Let’s start with Congress. The release of the report inspired some lawmakers, most notably Senate Majority Leader Harry Reid (D-Nev.), to call for passage of an oil-spill response bill. The Senate tried that once, but negotiations fell apart after oil-state lawmakers and anti-drilling Democrats could not come to an agreement on the issue of liability or how much the party deemed responsible for an oil spill should have to pay in economic damages.

Under current law, that number is capped at $75 million. Most lawmakers agree that’s too low, but that’s where the agreement stops. Oil-state lawmakers say removing the cap altogether or raising it too high will discourage future drilling, while liberal Democrats say a company should be held responsible for the full cost of the spill.

These disagreements are going to come up again in any future congressional debate on a spill response bill. The spill commission, for its part, couldn’t agree on the issue either. It called for raising the cap, but demurred on specifics.

At the same time, senior Republican leaders in the House responded coolly to the report Tuesday, suggesting it may be difficult to pass the legislation there. But the co-chairmen of the commission are preparing for a series of congressional hearings on their report and they promised Tuesday to push Congress to act.

Which brings us to the administration. The co-chairmen of the spill commission made it clear Tuesday that a number of their recommendations could be implemented without congressional approval. And they made that case Tuesday afternoon to Obama at a White House meeting with key administration officials.

It’s unclear whether the Obama will move on the recommendations, but E2 reported late Tuesday that the president instructed his staff to analyze the commission’s suggestions.

When will drilling in the Gulf of Mexico resume?

The Obama administration put a temporary stop to all offshore deepwater drilling in the Gulf after the oil spill. That moratorium has now been lifted, but drilling remains stalled as the administration reevaluates projects based on a series of new safety standards.

The oil industry and pro-drilling lawmakers have criticized the administration for taking too long to restart drilling, and they’ve argued that the new safety rules are unclear. The administration has said it is working to resume drilling quickly, even going so far as to exempt some projects that were halted as a result of the moratorium from additional environmental review.

The release of the report Tuesday and the prospect for additional regulations or legislation is making the industry nervous. For now though, the industry is eagerly waiting to drill again.