Ties Between Regulator, Firms Eyed In Gulf Spill

President Obama announced Friday what he called a "top-to-bottom reform" of the federal agency that regulates offshore drilling.

"For a decade or more, there has been a cozy relationship between the oil companies and the federal agency that permits them to drill," Obama said of the Minerals Management Service. "It seems as if permits were too often issued based on little more than assurances of safety from the oil companies."

It's now more than three weeks since the drilling rig Deepwater Horizon suffered a blowout, killing 11 crew members, sinking the rig and rupturing its well pipes. Meanwhile, crude oil and natural gas continue to gush from the open well.

Congressional investigators are now looking at what happened on the Deepwater Horizon before the blast.

The rig was owned by Transocean Ltd., which had recently received an MMS award for Outstanding Drilling Operations and Perfect Performance Period.

"These efforts were out there ... that would imply to me that you've been complying with the recommendations that the MMS has had," said Republican Sen. James Inhofe of Oklahoma at a congressional hearing last week.

But being on the right side of MMS wasn't much comfort for Transocean or for BP America, which leased the rig, or Halliburton, which did all the cement work on the well.

One big question mark is the blowout preventer, a 300-ton set of safety valves designed to shut off the well in an emergency.

"It's unprecedented that it should fail," BP CEO Tony Hayward said shortly after the April 20 accident.

But it turns out it wasn't unprecedented. What's worse, this particular blowout preventer had leaking hydraulics and a dead battery.

In fact, the last-chance "dead man's switch" wasn't even designed to function in the chaos of a blowout like this one. For it to work, the rig's pipe down to the wellhead had to be disconnected.

Jack Moore, president of the company that made the blowout preventer, told a House panel that the dead man system is designed to function when the riser parts from the wellhead.

It also turns out the well had passed only one of two critical tests.

Five hours before the blowout, the other test — for negative pressure — produced iffy results, calling into question Halliburton's cement work to seal the well.

"Had there not been a successful negative test, then that would clearly be a situation which would be problematic for the well," Timothy Probert, the safety officer for Halliburton, told a House panel.

And then there's the matter of the cleanup.

When BP applied to go drilling in this part of the Gulf, the company said it was prepared to handle an oil spill far larger than this one.

This past week, Democratic Sen. Benjamin Cardin of Maryland raised the question with Lamar McKay, the head of BP America.

"Was it accurate to portray that the proven equipment would prevent this type of an environmental disaster?" Cardin asked McKay.

"I believe, given the data at the time, it was accurate," McKay responded.

Democratic Rep. Henry Waxman of California, one of the lead investigators, said there will be more hearings.

"This was not an act of nature. This was a man-made disaster, and we've got to find out how it happened," Waxman said. "And I think our hearing made a lot of progress in getting to that result."

Early next week, there will be lots of hearings as administration officials take their turn in front of the cameras on Capitol Hill.

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