Regulators, Oil Firms Still in Uneasy Alliance

Source:

"The government's reliance on industry technology to contain spills will continue."

Oil-industry executives and Obama administration officials debated Wednesday how best to avoid a repeat of the Gulf of Mexico oil spill, circling an issue that's uncomfortable for both sides: The industry and government need each other.

"We need to understand this is always going to be a collaboration," said Coast Guard Adm. Thad Allen, who led the federal response to the spill from BP PLC's Macondo well. "Industry needs to be there—they have the technology."

Michael Bromwich, Director of the Interior Department's offshore-drilling oversight agency, said that must change. Mr. Bromwich has also said that his agency lacked the expertise to effectively monitor increasingly complex offshore drilling operations.

The government has long relied on the industry to provide the technology and materiel to contain spills, and that reliance will continue.

"Just as the U.S. industry respects the role government plays in oil-spill response, so should government encourage and support the strengths of the industry and utilize our unique capability in incident prevention and response," said Exxon Mobil Corp.

Exxon Mobil, Chevron Corp., Royal Dutch Shell Plc (NYSE:RDS.A) and ConocoPhillips announced in July that they were forming a joint venture to design, build and operate a rapid-response system to capture and contain up to 100,000 barrels of oil a day flowing 10,000 feet below the surface of the sea. The companies' plan is to create a strike force to stanch oil spills in the deep waters of the Gulf of Mexico in a bid to regain the confidence of the White House.

None of the speakers explicitly called for a lifting of the moratorium, but Mr. Tillerson pointed out the Gulf's significance to the nation's economy. Gulf of Mexico offshore oil production accounts for 30% of total U.S. crude oil production, according to the Energy Information Administration.

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe