From the U.S. Government Accountability Office, www.gao.gov

Transcript for: Oil and Gas Management Post-Deepwater Horizon

Description: Audio interview by GAO staff with Frank Rusco, Director,
Natural Resources & Environment

Related GAO Work: GAO-16-245: Oil and Gas Management: Interior's Bureau 
of Safety and Environmental Enforcement Restructuring Has Not Addressed 
Long-Standing Oversight Deficiencies

Released: March 2016


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[ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and
information from the U.S. Government Accountability Office. It's March
2016. Two thousand ten marked the largest marine oil spill in U.S.
history, when on April 20th, the Deepwater Horizon drilling rig exploded
in the Gulf of Mexico. In response, the Department of Interior
reorganized its offshore oil and gas management activities into separate
bureaus, including a Bureau of Safety and Environmental Enforcement. A
group led by Frank Rusco, a director in GAO's Natural Resources and
Environment team, recently reviewed the effectiveness of Interior's new
Bureau's oversight, investigation, and enforcement capabilities. Jacques
Arsenault sat down with Frank to talk about what they found.

[ Jacques Arsenault: ] The Deepwater Horizon disaster exposed some real
clear weaknesses or concerns in terms of the safety of offshore oil and
gas management. Can you tell me about how the federal government
responded to that disaster?

[ Frank Rusco: ] Well, even while they were trying to plug the well that
had blown out, there were analyses being done within the government and
by outside bodies, to see what went wrong. How did this happen? In
response to some of the key findings of those studies, management of oil
and gas offshore was broken up from one bureau that handled planning and
leasing, revenue collection, and enforcement of environmental and safety
regulations and laws, into three. This current report is primarily
focused on the Bureau of Safety and Environmental Enforcement.

[ Jacques Arsenault: ] So that Bureau, I think you've called it BSEE,
they focus on investigating, so finding out if things are all following
regulations or if they're not, reporting that up and then enforcing. But
your report found some pretty strong concerns about how that's been done
or what changes haven't been made. Can you tell me a little bit about
that?

[ Frank Rusco: ] Absolutely. BSEE began its existence in 2011. And one
of the things that came out of the studies after Deepwater Horizon was
the need to have an investigative function. And this was set up to
enhance the ability of BSEE to go out once there was an incident, and
determine its cause and figure out whether it was really just an
accident or was there some malfeasance or wrongdoing that caused the
accident. And this body has been operating since its inception without
actually prescribed procedures and policies and guidelines, and without
even recording the results in a coherent way of its activities.

[ Jacques Arsenault: ] So they don't necessarily have the guidelines to
make sure that all the investigations are modern and up-to-date in
getting what they want, and they also don't know when they do
investigate, they don't have a way to sort of roll that up and say
"Well, here's what we found across these incidents."

[ Frank Rusco: ] That's absolutely correct. And that's something that
they've been working on, as I say for five years. Still, as of the
publication of this report, they have not issued any policies and
operating procedures for that investigative unit.

[ Jacques Arsenault: ] So, one of the other things that you mentioned in
the report is that some of this continual turnover and leadership
transitions has created some additional challenges. Can you talk about
those?

[ Frank Rusco: ] Sure. There have been three directors since the start
of BSEE, and they have all undertaken restructuring efforts. There's
been a great deal of input from the regional management and regional
staff, who are on the ground doing the work, and doing it quite well, in
fact. Unfortunately, I think the lack of coherent leadership direction
at BSEE in headquarters has led to sort of a perpetual churn of
restructuring, but nothing really being nailed down in some key areas.
And I'll give you one good example-one of the big deficiencies
identified in the postmortem of the Deepwater Horizon spill was that
there were not enough staff doing environmental oversight and
enforcement. And so, this environmental group that had been set up and
was doing that was understaffed. Congress identified this and recognized
that, and provided money specifically earmarked to hire staff to fill
those positions. But to date, those positions have not been filled. The
BSEE management didn't have a good explanation for why they haven't
filled those positions. And, in fact, they've seemed to have no
explanation whatsoever.

[ Jacques Arsenault: ] It sounds almost like an NFL team that's hiring a
new head coach every couple of years and they start to put their program
in place then. By that time they're out and the next person's in. It
gets pretty challenging to move forward on some of these key areas.

[ Frank Rusco: ] I think that's an apt analogy that my teams have been
working on oil and gas management oversight, for years. What we see is a
disconnect between what's going on in the management in Washington, and
what's going on out in the field. Out in the field there's a lot of
people working hard and doing a great job. But the rules keep changing
for them and that is a problem. I think it's a management failure.

[ Jacques Arsenault: ] So then, almost 6 years after the Deepwater
Horizon disaster, what would you say is the bottom line of this report?

[ Frank Rusco: ] The Deepwater Horizon spill was a wake-up call. It
indicated that it's possible to have a real major disaster in the Gulf
in oil and gas management. It's also possible to prevent that, and that
is what Interior has been trying to do. They've been trying to set up an
organization that would have the skills, the tools, and the mission to
enforce key environmental and safety regulations to avoid such a
disaster in the future, or to stay ahead of changes, or at least abreast
of changes in the industry that might cause additional risks to emerge.
To do that, you really need to have a plan and stick with it and
understand what are you trying to achieve, how you're going to go there,
and you can't keep changing the rules as you go along.

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