Oil spill commission chief fears Capitol Hill barriers to reform

e360: Going forward, what are you most concerned about? What’s the risk we face right now?



Reilly: The risk we face is that the country’s span of attention will not maintain support for attending to this spill and its consequences. That Congress, in an anti-regulatory mood, will confuse the kinds of regulatory problems we’ve had there with the defects of regulation and not recognize that some additional regulation, smart regulation, is going to be necessary to avert catastrophe in the future. That the industry will go back to business as usual.

Elsewhere, Reilly is asked why BP was unable to address safety problems even after a fatal refinery explosion in 2005, and the 2006 spill from a pipeline on Alaska’s North Slope.

He replies that BP “fell into a pattern of severe cost-cutting” in the late 1990s, when oil prices had dipped very low.

“BP became excessively concerned with cutting costs and they did it quite irresponsibly with respect to the refinery in Texas City. I think that that culture continued on into the era that followed Lord Browne [former BP CEO John Browne, who resigned in 2007]. It was he who oversaw that cost-cutting. Tony Hayward, I think, was trying to fix the problem. He just didn’t get to it. And that culture did not change,” Reilly said.

Asked if that’s changing now, he replies: “They certainly have had every reason to focus laser-like on improving their safety and environmental performance, and I would be very surprised if in 3 to 5 years they are not among the safest oil companies.”

On another topic, Reilly revisits the controversy over plans that Louisiana Gov. Bobby Jindal (R) aggressively pushed to construct sand barriers aimed at keeping oil offshore. The commission did not look favorably at the effort.

Reilly notes that the BP-funded berms “did not play any serious role in the response” and should not have been federally approved, noting that only a relatively short section was in place when BP’s well was finally plugged.

“In my view, Louisiana officials were quite shrewd. That money they got for berms is now being spent substantially on beach replenishment, which was probably their primary interest all along,” Reilly said.