Obama's Enron Katrina Moment

It now looks like the Obama Administration has embarrassed itself. This time it has demonstrated its inability to police and maintain safety standards in the oil industry. Inspectors were failing to do their jobs, much like the corrupt New York City crane inspectors who were accepting bribes.

Will Obama fire people working in the Minerals Management Service segment of the Interior Department who are responsible for offshore oil-rig safety?

AP IMPACT: Fed'l inspections on rig not as claimed

LOS ANGELES – The federal agency responsible for ensuring that the Deepwater Horizon was operating safely before it exploded last month fell well short of its own policy that the rig be inspected at least once per month, an Associated Press investigation shows.

In fact, the agency's inspection frequency on the Deepwater Horizon fell dramatically over the past five years, according to federal Minerals Management Service records. The rig blew up April 20, killing 11 people before sinking and triggering a massive oil spill in the Gulf of Mexico.

Since January 2005, inspectors issued just one minor infraction for the rig. That strong track record led the agency last year to herald the Deepwater Horizon as an industry model for safety.

The inspection gaps are the latest in a series of questions raised about the agency's oversight of the oil drilling industry. Members of Congress and President Barack Obama have criticized what they call the cozy relationship between regulators and oil companies and vowed to reform MMS, which both regulates the industry and collects billions in royalties from it.

Earlier AP investigations have shown that the doomed rig was allowed to operate without safety documentation required by MMS regulations for the exact disaster scenario that occurred; that the cutoff valve which failed has repeatedly broken down at other wells in the years since regulators weakened testing requirements; and that regulation is so lax that some key safety aspects on rigs are decided almost entirely by the companies doing the work.

The AP sought to find out how many times government safety inspectors visited the Deepwater Horizon, and what they found. In response, MMS officials offered a changing series of numbers. The MMS has had long-standing issues with its data management.

At first, officials said 83 inspections had been performed since the rig arrived in the Gulf 104 months ago, in September 2001. While being questioned about the once-per-month claim, the officials subsequently revised the total up to 88 inspections. The number of more recent inspections also changed — from 26 to 48 in the 64 months since January 2005.

No explanation was given for the upward revisions. AP granted the officials anonymity because without that condition, communications staff at the Interior Department, which oversees MMS, would not have let them talk.

Based on the last set of numbers provided, the Deepwater Horizon was inspected 40 times during its first 40 months in the Gulf — in line with agency policy for offshore drilling rigs.

Even using the more favorable numbers for the most recent 64 months, 25 percent of monthly inspections were not performed. The first set of data supplied to AP represented a 59 percent shortfall in the number of inspections.

Interior Department spokeswoman Kendra Barkoff would not comment on the inspection numbers. Instead, she offered a general statement: "We are looking at all the questions that are coming out of the Deepwater Horizon incident."

In response to a Freedom of Information Act request filed by AP, the agency has released copies of only three inspection reports — those conducted in January, February and April. According to the documents, inspectors spent two hours or less each time they visited the massive rig. Some information appeared to be "whited out," without explanation.

Since the explosion, the agency has reiterated several times the inspection-once-per-month assertion, which appeared on its website at least as early as 1999.

In an e-mail to AP, an Interior Department official emphasized with italics that the MMS inspects rigs "at least once a month" when drilling is under way. Monthly inspections of offshore drilling rigs are an agency policy, though not required by regulation, said David Dykes, chief of the agency's office of safety management for the Gulf region.

Last week, at a joint Coast Guard-MMS investigatory hearing in Kenner, La., MMS official Jason Mathews asked Michael Saucier, MMS's regional supervisor for field operations in the Gulf, "And how often do we perform drilling inspections in the Gulf of Mexico?"

"We perform them at a minimum once a month, but we can do more if need be," Saucier said.

The job falls to the 55 inspectors in the Gulf who are supposed to visit the 90 drilling rigs once per month and the approximately 3,500 oil production platforms once per year.

The Deepwater Horizon's inspection frequency numbers struck Kenneth Arnold, a veteran offshore drilling consultant and engineer.

"I'd certainly question it," he said. "I'd ask, 'Why aren't you doing it?'"

When the AP did ask, MMS and Interior would not answer directly. Instead providing a set of conditions when a rig would not typically be inspected — including during bad weather, when it is jumping among short-term jobs, when a rig is preparing to drill or is done drilling but hasn't left for another site.

Transocean Ltd., which owned the Deepwater Horizon and leased it to BP PLC, would not provide a detailed accounting of the rig's activity history. According to RigData, a Texas firm that monitors offshore activity in the Gulf, the Deepwater Horizon was working approximately 2,896 days of the 3,131 days since it started its first well — about 93 percent of the time. That number represents the total number of days between when the Deepwater Horizon broke the sea floor during a drilling operation to when it was released to another site.

A summary of the inspection history that the MMS officials provided AP said the Deepwater Horizon received six "incidents of noncompliance" — the agency's term for citations.

The most serious occurred July 16, 2002, when the rig was shut down because required pressure tests had not been conducted on parts of the rig's blowout preventer — the device that was supposed to stop oil from gushing out if drilling operations experienced problems.

That citation was "major," said Arnold, who characterized the overall safety record related by MMS as strong.

A citation on Sept. 19, 2002, also involved the blowout preventer. The inspector issued a warning because "problems or irregularities observed during the testing of BOP system and actions taken to remedy such problems or irregularities are not recorded in the driller's report or referenced documents."

During his Senate testimony last week, Transocean CEO Steven Newman said the blowout preventer was modified in 2005.

According to MMS officials, the four other citations were:

• Two on May 16, 2002, for not conducting well control drills as required and not performing "all operations in a safe and workmanlike manner."

• One on Aug. 6, 2003, for discharging pollutants into the Gulf.

• One on March 20, 2007, which prompted inspectors to shut down some machinery because of improper electrical grounding.

Late last week, several days after providing the detailed accounting, Interior officials told AP that in fact there had been only five citations, that one had been rescinded. The officials said they could not immediately say which of the six had been rescinded.

The agency's problems with providing information extends to the data on display on its website. For example, the accounting of accident and incident reports is incomplete, making it very difficult to perform a thorough data analysis of the agency's performance and preventing a full accurate tracking of safety records of the rigs.

Data problems date back at least a decade. According to John Shultz, who as a graduate student in the late 1990s studied MMS' inspection program in depth for his dissertation, the agency's data infrastructure was severely limited.

"The thing I regret most is that, to my knowledge, MMS has not fixed the data management problem they have," said Shultz, who now works in the Department of Energy's nuclear program. "If you have the data you need, the analysis becomes fairly straightforward. Without the data, you're simply stuck with conjectures."

Whatever the correct citation total — five or six — the Deepwater Horizon's record was exemplary, according to MMS officials, who said the rig was never on inspectors' informal "watch list" for problem rigs. In fact, last year MMS awarded the rig an award for its safety history.