The BP Oil Spill Recovery Effort: The Legacy of Choices Made by the Obama Administration

Washington, DC – Today, the House Oversight and Government Reform Committee released a report titled “The BP Oil Spill Recovery Effort: The Legacy of Choices Made by the Obama Administration.”  The report examines the adequacy of the response to the Gulf Oil Spill and decisions made by the Obama Administration.

“The response to the oil spill was a partnership between the White House and BP.  While the arrangement may have worked well for BP and the White House, many spill victims feel otherwise,” said Darrell Issa, R-Calif., Chairman of the House Committee on Oversight and Government Reform. “From frustration about the compensation process to the devastating economic impact of the drilling moratorium, evidence presented in this report raises many questions about the wisdom of the Administration’s policies including the decision to put BP at the forefront of managing and leading the recovery effort.”

Key Findings:
The Administration ceded leadership and management responsibilities for addressing the suffering of oil spill victims to BP.
President Obama had to choose between federalizing the response to the oil spill under the Stafford Act or allowing BP to lead the effort under federal oversight under the authorities of the Oil Spill Act.  While BP would have been financially responsible for clean-up costs under either scenario, President Obama chose the option of letting BP lead and make critical decisions on recovery efforts under the authority of the Oil Spill Act.

Many Gulf Residents and Local Leaders Believe BP is not Meeting its Obligations
Failure to fund removal of clean-up equipment debris, uncertainty surrounding mental health services, and frustration associated with the compensation process are among the concerns of affected Gulf Coast residents.  Many believe BP is not meeting its obligations and the federal government has abdicated its responsibility to intervene.

Before Implementing the Drilling Moratorium, Administration Documents Indicate Officials Made False Assumptions about Effects and Job Losses
In examining the economic impact of imposing a drilling moratorium, the Administration relied on numerous false assumptions.  In one internal analysis, the Administration assumed that “drilling could re-start on January 1, 2011.”  In reality, the first new drilling permit was not issued until months later.  Alarmingly, in dismissing larger projections of unemployment the document also noted, “we are comfortable with our conservative approach because the loss in employment is not long term, so the full effects of the indirect and induced employment may not be fully felt as some businesses may be willing to sustain short term losses to avoid having to lay off and subsequently rehire workers.” As oil rigs leave the Gulf, layoffs continue, and the economic consequences of the moratorium continue these assumptions have been exposed as deeply flawed.

After the Spill, the Administration’s Reorganization of the Agency that Regulates Drilling Ignored Critical Input
Upon entering office Interior Secretary Ken Salazar was aware of systemic problems at the agency that regulates drilling (MMS) and indicated an early commitment to meaningful reform.  In January 2009, he told employees “[w]e will make sure you have the tools you need to hold special interests accountable, to protect taxpayers from getting fleeced, and to ensure that those who develop our natural resources follow the law of the land.” Little occurred, however, until efforts were put in motion after the oil spill to radically restructure and spilt the agency.  The reorganization of MMS was announced less than one month after the oil spill.  Furthermore, it did not address important recommendations made by MMS employees, Government Accountability Office studies, and investigations by the Department of Interior Inspector General.

Today, The Oversight Committee holds a hearing that corresponds with this report at 9:30 AM in Rayburn 2157 titled “Making the Gulf Coast Whole Again: Assessing the Recovery Efforts of BP and the Obama Administration after the Oil Spill”.

The report can be viewed here.

Read the full list of the witnesses with their testimony, as well as Chairman Issa’s opening statement.