Federal agency set the stage for deepwater drilling

After gulf spill, actions are seen in a new light

Oil has long been part of Louisiana’s culture, as is the fishing industry. Dan Wolfrer painted the hull of his shrimp boat last week in Empire, La., before the start of brown shrimp season. Oil has long been part of Louisiana’s culture, as is the fishing industry. Dan Wolfrer painted the hull of his shrimp boat last week in Empire, La., before the start of brown shrimp season. (Chuck Cook/Associated Press)
By Jason Deparle
New York Times / August 8, 2010

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NEW ORLEANS — On March 5, 1997, an obscure federal official with a puckish grin entered a hotel ballroom here and greeted 1,000 jittery oilmen on what would prove a landmark day.

For years, fading interest in the Gulf of Mexico had punished the local economy and left Louisiana to mourn its “Dead Sea.’’ Now, rising oil prices and new technology were setting off the deepwater version of a gold rush. Interest in drilling ran so high that the official, Chris Oynes, was heading into the annual lease auction with a record number of sealed bids.

In giddier times before the bust, his predecessor presided over the auction in a jaunty red blazer, but Oynes was far too conservative for that. Or so everyone thought — until he opened his briefcase and brought down the house with a size 46 scarlet jacket, an omen of the coming deepwater boom.

“They knew symbolically what this meant,’’ Oynes said in a recent interview. “In Louisiana terms: ‘Let the good times roll.’ ’’

Now the gulf is reeling from the worst oil spill in US history, after 5 million barrels of toxic sludge escaped from a mile-deep hole that BP finally cemented last week. Deepwater drilling has been temporarily banned.

The Minerals Management Service, the agency that led the way into the deepwater age, has been abolished, ridiculed as a pawn of the oil industry it was supposed to oversee. And the agency’s gulf office, which Oynes ran for many years, has attracted particular scorn.

While the causes of the spill remain unclear, a number of the agency’s actions have drawn fire: It shortened safety and environmental reviews; overlooked flaws in the spill response plan; and ignored warnings that a crucial piece of emergency equipment on the Deepwater Horizon rig, the blowout preventer, was prone to fail.

For decades, Washington and Louisiana were joined by the minerals agency. Washington got oil and royalty fees, Louisiana got jobs, and the agency got frequent reminders of the need to keep both happy.

Seldom do regulators work in a place so dependent on the industry they oversee. Oil saturated the state’s culture long before it covered its marshes. Oil is equally prized as a source of jobs and of tax revenue.

Few people loomed larger on that local scene than Oynes, 63, who held top jobs in the gulf office for 21 years and outlasted 11 agency directors before resigning abruptly in May.

The minerals service had a three-part charge: issuing leases, collecting royalties, and overseeing the dangerous work at sea. While his superiors in Washington set broad policy, Oynes dominated the gulf with 12-hour days, a zeal for detail, and faith in dazzling new technology.

His decisions guided which drilling plans would be approved, what safety checks would be required, and how platforms would be inspected.

For years, he told associates that modern engineering made spills all but impossible, and harmless if they did occur.

Angry at what he called lampooning depictions of the agency since the April 20 rig explosion, Oynes recently offered his account of what happened on his watch. He aired many problems, but few regrets.

As Congress debated the landmark 1978 law that governs offshore activity, Louisiana officials argued for a light federal touch.

Elsewhere in the country, the law requires companies to submit detailed proposals for offshore activities, called Drilling and Production Plans. In the gulf, it specifically forbids them. Though the minerals agency invented an alternative (a Development Operations Coordination Document), it provides for lesser levels of review.

When tensions arose between engineers and environmental scientists, Oynes cast himself as the neutral broker, but subordinates sensed where his instincts lay. The result was a culture that favored trust over doubt, saying yes over saying no.

One day in a staff meeting, Hammond Eve, who ran the environmental division until 2004, raised a question: With wells being sunk at ever-greater depths, what are the chances of a blowout, a catastrophic eruption?

Oynes said the answer would come from the head of field operations. “And later on the answer came back that it was impossible,’’ Eve said. “They said the blowout preventer will take care of it.’’

The clash between the agency’s environmentalists and engineers dominated a project meant to guide the agency into the deepwater age, a two-year study of new risks called an environmental assessment.

Published in 2000, it framed the agency’s approach for the next decade.

It counted 151 well blowouts in the previous 25 years, about one every two months. It said a quarter had led to spills.

It questioned the effectiveness of chemical dispersants and cited the difficulties of drilling relief wells. In noting that a deepwater blowout could take up to three months to control, it all but forecast the BP disaster.

Then it quickly silenced its own alarm bells, casting spills as a “very low probability event.’’ It saw no need for new safeguards or an environmental impact statement.

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