Washington, D.C.– Rep. Raúl M. Grijalva, who chairs the House Subcommittee on National Parks, Forests, and Public Lands, today called for a significant increase in government regulators’ ability to levy financial and other penalties against oil companies that violate safety and environmental standards in the wake of a Wall Street Journal article highlighting numerous “close calls” at rigs that barely avoided disasters. As the story indicates:
In the U.S. portion of the Gulf of Mexico in 2009, there were 28 major drilling-related spills, natural-gas releases or incidents in which workers lost control of a well. That is up 4% from 2008, 56% from 2007, and nearly two-thirds from 2006. Taking into account the number of hours worked on offshore rigs, the rate of these incidents rose every year from 2006 to 2009.
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Investigations into the Deepwater Horizon and some other recent incidents have pointed to the industry’s difficulties finding and retaining enough experienced workers, its struggles to balance safety priorities with profit demands, and occasional lapses in the face of lax regulation. These challenges have become more pronounced as oil companies continue to push the limits of technology and experience in deeper water, harsher environments and more complex oil reservoirs, the investigators say.
“Struggling to balance safety priorities with profit demands is exactly what got us Deepwater Horizon, and it’s time the industry made the right choice for the country,” Grijalva said. “Horizon was not an isolated incident – the only reason it made news was because it happened on a devastating scale. If we find more rigs with lax safety standards, there need to be serious consequences. If our current regulations aren’t strong enough to clean up the industry, we need to strengthen them without delay.”
An Interior Department oversight board found in September that current penalties are not sufficient to change industry behavior. According to a recent CNBC article headlined “Offshore Drilling Penalties Are Toothless, Panel Says”:
In an environment where many companies pay between $500,000 and $1 million daily to run an offshore facility a potential fine of no more than $35,000, even in the case of a worker’s death, is not an effective tool to enforce safety regulations, the panel said.
For all of last year, the Interior Department collected a total of $919,000 in civil penalties for offshore drilling violations, which is equal to the cost of shutting down a large drilling facility for just one day.
Higher penalties was one of more than 50 recommendations Salazar said he would consider to improve how offshore drilling is regulated.
“If thirty-five thousand dollars a day is pocket change, then why would a company make the decision to improve its behavior?” Grijalva said. “The Interior Department should review these rules and make a decision as soon as possible how to better protect coastal communities and the wider economy from another catastrophe.”