Senate Hearings on Oil Spill Target Lax Government Watchdog

After Senate hearings last week featured oil executives blaming each other for the massive Gulf of Mexico oil spill, further hearings on Tuesday saw the federal government accused of being lax in regulating offshore drilling and enforcing safety rules, contributing significantly to what's likely the nation's worst environmental disaster ever.

The federal government's response to BP's (BP) oil spill was the primary topic discussed at Senate hearings in the Energy and Natural Resources; Commerce, Science and Transportation; and Environment and Public Works committees on Tuesday. The Associated Press reported that at the Energy and Natural Resources hearings in the morning, Interior Secretary Ken Salazar conceded that the government may have failed to ensure safety in offshore drilling by not holding the oil industry accountable.

Salazar also indicated that the Obama Administration is determined to advance new regulations on offshore drilling in spite of industry opposition. "We have not and we will not back down on our reform agenda," he told the Energy and Natural Resources Committee.

Clean-Up Needed at Minerals Management Service

Salazar testified that many changes in his department's Minerals Management Service, which issues drilling leases and oversees drilling, were already underway. He also said additional measures to overhaul how offshore drilling is conducted are being considered.

"We need to clean up that house," Salazar said. "There are some bad apples at MMS, and we have taken care of them. To the extent that MMS employees were involved in any kind of negligence here or any other kind of failure, they will also be held accountable."

Indeed, a lawsuit against MMS has just been launched (Gulf Restoration Network and Sierra Club v. Salazar). It charges that the agency violated federal law in 2008 by exempting oil companies drilling in the Gulf from disclosing blowout and worst-case spill scenarios, as well as plans for dealing with them, before approving the companies' offshore drilling plans.

On Monday, the Obama Administration announced that it will set up a special Presidential panel to investigate the oil spill. Reuters reports that the federal government's oversight role, environmental protections, and the "structure and functions" of the Minerals Management Service will be among the issues the special panel will explore.

Republican Opposition to Raising BP's Liaibility

The Senate hearings also sparked arguments about a number of issues related to the oil spill response efforts. Questions about oil companies taking shortcuts when drilling were raised by Senate Commerce Committee Chairman John D. Rockefeller IV (D-W.Va.). Senator George LeMieux (R-Fla.) said more attention needed to be directed toward cleaning up the spill before the oil could further destroy the fishing and tourist industries along the Gulf and Florida coasts.

Republican opposition to legislation designed to increase BP's financial liability for damages from the spill was also challenged as a political move that could leave taxpayers on the hook for the cleanup.

BP has finally made some headway in the efforts to stop the oil spewing into Gulf early Monday -- it was able to insert a riser insertion tube into the broken pipe where the majority of the oil spill has been coming from. In a statement, BP says the tube is now funneling about 2,000 barrels of oil a day to a drillship on the surface. Experts say the tube could be capturing from 30% to 40% of the oil spewing from the broken well.

"It will take some time to increase the flow through the system and maximise the proportion of oil and gas flowing through the broken riser that will be captured and transported to the drillship," according to BP's statement. "This remains a new technology and both its continued operation and its effectiveness in capturing the oil and gas remain uncertain."

Scientists have estimated that some 25,000 to 80,000 barrels of oil per day have been leaking into the Gulf since Apr. 20 when Transocean's (RIG) Deepwater Horizon rig exploded and sank. The government has estimated the flow of oil into the Gulf at 5,000 barrels a day.