The BP disaster was a stark reminder of the risks involved in accessing America’s oil reserves. One year later, too little action has been taken by the government to prevent a similar incident.

While incorporating a “safety case” methodology into the laws and regulations governing offshore drilling may be helpful, a regulatory scheme that grants permission to drill too soon is fundamentally problematic. Even if an oil company were to identify all the risks of a drilling operation and implement safety plans to address them, the relatively less developed safety technology available today coupled with the more advanced (and more risky) drilling technology keeps the potential for disaster higher than necessary.

Given this situation, a smart policy may be to wait to drill until safety technology catches up with the drilling technology (as discussed on these pages last year).

Waiting to drill allows our nation the option to cash in on the sale of offshore drilling leases at higher prices and with lower risks as better technologies come online. A private company like Chevron wouldn’t just cash in the value of its assets when prices are low and risks are high. In contrast, if the U.S. government is selling leases, Chevron has little choice but to buy and exploit. The company’s job at that point is to maximize profits by drilling, not maximize wealth for the American people. But in many cases, the best option for the American public and economy might be to wait for a more optimal time that gives us a better value for the risks we’re exposed to.

But the federal agencies in charge of regulating these natural resources aren’t even considering the option to wait. They use an out of date economic approach when deciding when to sell offshore drilling leases. This approach ignores the option value of the resource. Federal agencies are treating drilling like a now-or-never decision instead of taking into account more complex factors like uncertainty about prices and environmental risks that might point in the direction of a now-later-or never decision. The current approach can lead to the sale of leases for less than they are worth and to aggressive drilling without proper safety technology.

The use of such an overly simplistic economic analysis means that America likely drills for oil too much too soon, taking on too much risk and potentially missing out on higher pay-offs for taxpayers. It also might have led to the Macondo spill since a more complex analysis could have prescribed waiting rather than drilling. As the government still has not updated the calculations, it exposes us to the potential for more catastrophic losses.

To better determine the optimal time to drill, agencies should use an economic option value model. Option value can be calculated to estimate how rational market actors would take account of uncertainty about future prices when making investment decisions. In the offshore drilling context, this would allow for us to wait to sell offshore leases until we can get the right price. Agencies should also calculate the option value related to costs to incorporate uncertainty about the environmental effects of spills and the path of technological development that reduces both private and social costs.

Using an option model, the Department of Interior should set a floor price for the leases based on uncertainty around estimates of the future value of the oil and gas under our oceans and the rate of technological development. This would guarantee that leases aren’t being auctioned off too soon.

While it may be tempting to pump up the economy by over-exploiting our oil reserves now, doing so can be extremely costly—the BP spill demonstrated this. And relying on oil companies to assess and mitigate the risks of their operations isn’t going to get the job done. The government is going to have to step in and determine if there’s a better time to allow drilling.

The oil that spilled into the Gulf of Mexico a year ago can’t be taken back. But as the public continues to incur risks from drilling, the government should make sure that we’re getting properly compensated.

If we want to prevent a repeat of the Deepwater Horizon disaster—in particular in the frigid Arctic—the best step we could take is to adopt a “safety case” approach. Under this philosophy, an assessment of the risks and emergency response systems of each offshore drilling facility is conducted before it starts operating. As was recommended by the Oil Spill Commission, this plan should be adopted by the industry, the administration and also be included in any new legislation considered by Congress.

Each offshore drilling facility is different, and a risk assessment needs to be done to ensure the highest level of prevention, safety and response is in place. The application of the safety case has demonstrated its effectiveness in preventing disasters. Other countries such as Norway have adopted this approach and have had far fewer deaths and accidents. Although nothing is foolproof, the chances of an accident can be markedly reduced through smart, effective prescriptive regulations coupled with the safety case approach. During the last Congress, the Senate Energy and Natural Resources Committee unanimously passed a bill that contained this type of provision; however, the bill did not pass the Senate before the end of the legislative session.

Spill response requirements also need to be updated to ensure that each rig has adequate equipment and trained personnel on contract and available to sufficiently react to a worst case discharge and protect marine and coastal resources. Clearly the standards that were in place at the time of the Deepwater Horizon, and are still in place today, are not adequate. Regulations need to be adopted to improve spill response regulations, and legislation needs to be passed that ensures an investment in technologies that can be used in Arctic conditions.

Nowhere are reforms more important than the remote, extreme and fragile waters of the Arctic Ocean. The ice, hurricane-force winds, stormy seas and long periods of fog and darkness of the Arctic Ocean make spill cleanup almost impossible. In addition, there is no proven method for cleaning up oil in the icy conditions found in this region.

Congress should use the one-year anniversary of the BP Deepwater Horizon spill to commit to passing offshore energy reform to protect the Gulf and the Arctic. Without such legislation, America will remain vulnerable to another disaster like the Deepwater Horizon.

Marilyn Heiman is the director of the Pew Environment Group’s U.S. Arctic Program. www.PewEnvironment.org

As we mark the one-year anniversary of the Macondo oil well spill in the Gulf of Mexico, it is important that we remember the 11 workers who died in that accident, their families and the communities along the Gulf coast that were most affected by this incident. They remind us that, in our efforts to continuously improve safety in our operations, there can be no let-up.

Our commitment to safety has been the guiding force of our operations in the Gulf from the very beginning. It remains our top priority, and since the April 20 spill, our industry has worked on its own and with the federal government to make all our operations even safer. API members have a long history of establishing and following best practices for safe operations – including training, operational procedures and equipment requirements through a globally recognized standards and certification program. This program is regularly reviewed to drive performance improvement.

And we will go on working with the Department of the Interior and the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) as we move forward with critical energy development in the Gulf.

Two recent and significant developments must be acknowledged:

· Two industry consortiums have successfully designed and developed advanced engineering systems to respond in the unlikely event of another deepwater spill; and

· API announced the formation of the industry Center for Offshore Safety that will be open to all companies that operate in deepwater exploration and production.

Taken together, these actions demonstrate our industry’s commitment to the highest level of safety for our operations – to protecting our workers, our oceans and our shorelines. And demonstrate an effective partnership between the industry and government could expand access to domestic resources which will help our nation enhance its energy security, increase government revenue to help reduce the national debt, spur job creation and foster economic growth.

I recently had the opportunity to travel to Sweden and Norway and discuss oil spill response and preparedness.

The first event was an Oil Spill Preparedness Conference held at the World Maritime University in Malmo, Sweden. A number of government, not for profit, and private sector organizations participated. The Deepwater Horizon spill was discussed in depth as was the Montara spill, which occurred in Australia in 2009. In depth presentations focused on specific topics such as in situ burning and the effectiveness of skimming equipment. There was general agreement that we have not advanced much in terms of response technology since the changes that were mandated following the Exxon Valdez spill. There needs to be focused research and development effort related to the current methods for oil exploration and production and the risks associated with deep water drilling. I would note that we were deluged with offers of assistance and proposals to more effectively respond to the spill. The problem was we received thousands of proposals and it was nearly impossible to evaluate each adequately while the response was in progress. We need to focus our research and development effort on continuous improvement and innovation and not be prodded by an event.

Departing Malmo I traveled to Oslo, Norway where I did several media interviews and then participated in a panel with Norway's major oil producer Statoil, the Director General of the Norwegian Coastal Administration (the designated federal entity for oil spill response oversight), and a not for profit organization, Bellona, which focuses on nuclear safety issues in Russia and oil exploration and production in Northern Europe. Norway faces a decision as to whether to drill for oil in an environmentally sensitive area called the Lofoten Archipelago in Northern Norway. In advance of the panel, the organizers provided me an in depth comparison of the Norwegian and United States regulatory systems related to oil and gas exploration. This is a very informative document that was prepared by Det Norske Veritas (DNV), an organization that conducts third party inspections of vessels and drilling systems (among other things). In the maritime vernacular they are called a classification society. DNV is also the organization that was retained to develop the forensic report on the Deepwater Water Horizon blowout preventer. I believe the comparison of regulatory systems would add to this discussion immeasurably so I am making it available via this blog (click here for the document).

The fundamental question raised by BP’s Gulf oil spill disaster is this: In the increasingly dangerous and risky pursuit of fuel, are we, as a society, committed to protecting human lives and natural resources? If the answer is yes – as it should be –then we need to fastidiously adhere to the precautionary principle, and prevent accidents and spills before they happen.

As we mark this week the one-year anniversary of the BP Deepwater Horizon disaster, it is only rational to ask whether we have taken the necessary steps to avoid a repeat performance of this same kind of accident. We now have the benefit of some key findings, such as the president’s “National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling” which determined, after careful review, that the missteps leading to the accident were in large part a function of systemic problems that exist throughout the industry. We also have an independent review of the blowout preventer technology used on virtually every offshore rig, the last line of defense between an oil spill and the marine environment, which found design flaws that render these devices unreliable. Both of these studies reveal that the industry was essentially playing Russian roulette with its rigs – an accident was unavoidable.

Not only did we discover that an accident like that which occurred on the Deepwater Horizon rig was inevitable given those systemic problems, we also learned that we were in no way prepared to deal with it. An objective analysis of the Gulf Coast oil spill response effort found that the Coast Guard was not properly equipped, nor was it organizationally prepared, for an event of this magnitude. A review of industry response plans submitted across the Gulf showed documents that were little more than photocopies of poorly written and researched documents designed to check an application box rather than to provide sound guidance in case of an emergency.

And yet Congress has done nothing to rectify these shortcomings. Instead, there are now those in the House of Representatives that seem more interested in blindly expanding the same kinds of risks that caused the Deepwater Horizon to the Pacific coast, the Atlantic shoreline, new areas of the Gulf coast and into the icy reaches of the Arctic Ocean. And while the newly-named Bureau of Ocean Energy Management, Regulation and Enforcement has published a new safety rule that purports to advance all measures needed to prevent the “next big one,” much of this rule simply upgrades what were formerly voluntary oil industry practices promulgated by the American Petroleum Institute. Unfortunately, the mere application of the words and concept “safety case” is not enough to change the culture of an entire industry. The words “safety case” have no more power than the words “response plan.” Without tangible preventive actions on the part of government, without robust oversight and measurable standards, no real changes have been made.

If Congress and the administration are serious about safety and prevention of offshore oil disasters and being better prepared for the “next time,” they should:

· Stop pretending that the kind of accident that BP caused in the Gulf of Mexico is only possible in deep water. The 2009 three-month-long West Atlas/Montara blowout in Australia's Timor Sea, the 1979 nine-month-long Ixtoc blowout in Mexican waters of the Bay of Campeche, and many other less severe blowouts in the intervening years, have all taken place in shallow water. The federal government's convenient regulatory denial regarding hazards posed by shallow water operations has led the agencies in charge to overlook the necessity for stringent enhancements in the overall regulation of shallow water drilling activities.

· Conduct expedited research, development and implementation of an innovative new type of fail-safe backup valve shut-in device that would reliably preclude loss of well control in the event of the failure of the blowout preventer in any water depth.

· Routinely require pre-deployment of a second rig capable of drilling a relief well at the appropriate water depth, to be situated in a location within a certain reasonable response time of every drilling site.

· Fast-track research and development of new types of biodegradable dispersants, including comprehensive testing and certification by the Environmental Protection Agency for use in mass quantities under pre-defined appropriate conditions, their manufacture in commercial quantities, and their pre-deployment at locations of possible future need.

· Prioritize, in the national interest, the engineering and development of large ship-scaled oil skimmers for use in realistic wind, wave, and ocean current conditions, to be certified by the U.S. Coast Guard and built and operated by the petroleum industry.

· Require the immediate development and manufacture of more effective oil spill containment technologies and sorbent booms, and ensure their pre-deployment in storage facilities in geographic areas of likely future need.

· Set about the testing of spill response technology in real world conditions and require mandatory certification as to the measurable cleanup effectiveness of available response equipment and plans.

· Establish, certify, and enforce a minimum requirement for oil spill response capacity onsite or within reasonable distance such that operators have reliable capacity to recover a certain minimum percentage of oil spilled.

· Set forth realistic fiscal liability requirements sufficient to cover the cost of response and cleanup in the event of a blowout or other spill.

· Keep new drilling operations out of the Arctic Ocean unless and until our oil spill response technology has been convincingly proven to work amidst broken sea ice, treacherously high seas, prevailing darkness much of the year, extreme adverse weather conditions, and where the nearest Coast Guard capability is now a thousand miles away.

Congress urgently needs to address these issues, since the responsible agencies have not progressed far enough to prevent a repeat performance of the BP oil spill mess. To do otherwise is to lay the groundwork for a future disaster like the one still impacting the Gulf Coast states today.

The core question is not so much whether risk assessment should be incorporated as a “safety case” but how such a requirement should be included. Danger lurks in a one-size-fits-all legislative or regulatory approach.

If officials used an ISO -- International Standards Organization -- model to set minimum standards, regulators could then perform inspections based on the completeness of a company’s plan and its operating performance. Companies that consistently demonstrate operating excellence could be exempt from third party inspections. A distinction should also be made between companies whose contractors adopt their operating standards and those that don’t.

An improved regulatory system should contain incentives for companies to achieve operating excellence, such as rewarding demonstrated excellence with lower compliance costs. The goal should be a system that is flexible, dynamic, and puts as much emphasis on efficiency as it does effectiveness. A “look back” provision should be included to make sure that the system is achieving its objectives cost-effectively and not driving compliance to mediocrity or making compliance so costly that offshore exploration is discouraged.

We should never forget the devastating impact of the Macondo explosion a year ago, and it should continue to serve as a reminder to continuously strive to improve safety, environmental performance and efficiency. That being said, the response from the industry to this awful accident was amazingly thorough and impressive. And the results of the review of what happened at Macondo should have given the oil industry and the US Government a clear idea of a sensible path forward – for the industry, for the environment and for our economy. But that didn’t happen. Once the review was completed the regulatory process should have been reinitiated, yet it was not.

A year later, the US economy is still precarious and unemployment remains at completely unacceptable levels. In the last three months, we’ve spent more than $90 BILLION on oil imports, and here at home, $5 per gallon gasoline seems to be the political strategy we’re enlisting. This “strategy” will not hasten the move to alternative energy. The technology is just not there yet, so $5 per gallon gas is having just one impact – a negative one on consumers, our economy and unemployment.

The domestics energy industry is key to our nation’s economic viability. As much as $13 BILLION in federal revenues will be lost in 2011 due to the government’s shutdown of offshore operations (not to mention the additional billions lost to the overall economy). We cannot continue down this path of acting like we can magically make the transition from oil and natural gas happen overnight. It won’t even happen in the next 50 years. We need all of our resources as we begin the long road to diversification.

Macondo should not only be a reminder to stay ever cautious of safety concerns, but a reminder of the devastating impact that slowing down our US energy industry can have on our country.

If this is the only manifestation of intensified federal scrutiny of deepwater oil drilling, the petroleum industry can count this as another of its blessings. Contrast the safety case approach to regulation discussed here with the life cycle approach applied to biofuels.

In enforcing the Renewable Fuel Standard, the Environmental Protection Agency has conducted full lifecycle analyses of each current, planned or proposed biofuel production process, measuring its energy intensity, carbon emissions and worldwide market-mediated impact on land use. Each proposed biofuel producer must separately certify each biorefinery and transportation fuel to meet regulatory requirements – in essence to make the “safety case.”

Further, as part of its Congressional directive under the RFS, EPA recently drafted a report on the potential environmental and resource conservation impacts of biofuels. Production and use of biofuels under the RFS will achieve a 138-million metric ton reduction in carbon dioxide-equivalent emissions by 2022, compared to a 2005 baseline of emissions from petroleum transportation fuels, according to the report. Further, biotech tools for producing biofuels can reduce emission of other pollutants from petroleum, such as carbon monoxide and benzene, as EPA has noted elsewhere. But while on one hand this draft report reaffirms that the RFS will help reduce greenhouse gas emissions, on the other hand it explores a long list of possible negative impacts of increased biofuel production.

The world has had several recent reminders how potential environmental impacts of energy production can become reality, including the Deepwater Horizon accident in the Gulf of Mexico and the partial meltdown of the Fukushima Dai’ichi nuclear facility in Japan. But neither the EPA nor the Interior Department appear to be proposing to measure the worsening emissions profile of petroleum fuels. And neither agency is proposing to regulate petroleum based on the market-mediated impacts of our continued over-reliance on it, even as the price of oil once again tops the $100 per barrel mark.

The potential and minimal negative impacts of biofuels identified by the EPA can indeed be mitigated by good practices fostered within the industry and the agricultural community. U.S. consumers should recognize that all energy choices involve risks and mitigation strategies and that there are additional considerations besides the immediate impact on the environment. On the scale of risk, biofuel ranks much lower than other energy choices. Policymakers should keep this in mind as they continue to wrestle with new energy policy and funding priories.

The oil drilling industry and the U.S. government have made significant improvements in their assessment of the risks and their readiness to mitigate future catastrophic spills in the Gulf of Mexico. The risk of a catastrophic spill is no doubt lower than it was prior to the Deepwater Horizon incident. Despite these positive achievements, we are poised to fight the last war – not the next one - if we do not learn the true lessons from the spill. The bottom line is that much needs to be done by Congress, the regulators, and the industry to ensure a safer future in deepwater drilling.

Lesson 1: The industry faced inadequate incentives to prevent a catastrophic spill

Industry faced powerful incentives to avoid a catastrophic spill prior to the Deepwater Horizon incident. However, these incentives were apparently inadequate to address the increased risks of drilling at new depths. Along with several other RFF researchers, I recently studied the costs and benefits of deepwater drilling and concluded that existing liability laws do not fully cover the costs of catastrophic spills. My colleagues and I argue that Congress needs to provide stronger incentives for industry to invest in safety, risk reduction and spill response and containment technologies: Among the specific recommendations are: (1) raise liability caps to reflect the risk posed by deepwater drilling; (2) establish commensurate financial responsibility requirements; (3) require third-party insurance to increase external monitoring; and (4) develop risk-based premiums if insurance pools are used.

Lesson 2: Deepwater Drilling is Riskier

Despite claims to the contrary, deepwater drilling is riskier – and neither the industry nor government had prepared themselves for the increased challenges posed by deeper depths. My colleagues at RFF and I recently studied oil production data in the Gulf and found that even controlling for levels of production, facility complexity, company in charge, distance to shore, and other factors, the probability of a company-reported incident (such as fire damage, injuries, or pollution) increases with water depth. Ultra-deepwater drilling is simply more complex and risker. For example, moving from a water depth of 500 feet to 5,000 feet increases the annual probability of an incident from roughly 10 to 70 percent. This finding is true even when looking at only the top 10 oil producers in the Gulf.

What might the government and industry do to adequately assess these risks? First, they need to improve risk assessment methodologies and establish clear thresholds. For example, industry and government should partner to collect detailed incident data and build analysis capability to more fully develop a quantitative risk-assessment model (similar to the “precursor analysis” developed and used in the U.S. in the nuclear industry). Based on models such as this, quantitative thresholds should be adopted to specify unacceptable risk levels and tolerable risk levels – this approach is used by many other U.S. government agencies regulating risks. Second, regulators should increase the use of performance-based risk management. For example, the “safety case” approach that has been used in Norway and the UK for offshore oil and gas development should be considered.

Lesson 3: Without strong third-party oversight, neither the industry nor the government should be relied upon to adequately ensure safety in deepwater.

First, we need to recognize that the capacity of our government regulators is wholly inadequate. While our offshore oil production and royalties have dramatically increased over the years, the regulatory enforcement budget of MMS (now BOEMRE) has not kept pace. Government pay scales, training budgets, and capacity are simply too low to maintain the level of expertise needed to keep up with the latest technologies and challenges facing the deepwater drilling industry. Given these limitations, we must find mechanisms to marshal the expertise of academics and the private sector as partners and as independent monitors. Among the many opportunities for such oversight are: (1) an independent safety review board to investigate offshore accidents, (2) regular third-party audits of the government-required Safety Environmental Management System (SEMS), (3) required third-party technical review of containment and response plans before being approved as part of the permitting process, and (4) more public oversight of industry efforts to invest in research and development in spill prevention, containment and response technologies. In addition, requiring third-party insurance would create a powerful independent monitor of drilling activity.

Lesson 4: We’ve been here before – let’s not fight the last war...

Following the lack of response readiness that was apparent during the Exxon Valdez spill, the industry created a consortium to invest in oil spill response technologies and readiness. Yet, in the 20 years following the Exxon Valdez, little investment and innovation had taken place, and the industry was simply not prepared for the next big spill. This is not surprising, given the lack of strong incentives and government oversight. Following the Deepwater Horizon spill, the industry came forward with an aggressive response to build a containment system that would be ready in a matter of days instead of the three months required to contain the Macondo well. Both the newly formed Marine Well Containment Corporation (MWCC) and Helix Corporation have put into place containment systems that have convinced BOEMRE that it is time to begin to reopen deepwater drilling. While I am not questioning the judgment to reopen drilling (as I do not have the technical background and knowledge required to assess the current drilling permit applications), we need to understand the limitations of the MWCC and Helix solutions: (1) even if effective as designed, they will only fight the last war, and (2) there are inadequate incentives for innovation and improvement beyond our current capacity. For example, the MWCC and Helix solutions are not designed to contain a spill scenario such as encountered in 1979 off the Gulf of Mexico when the Ixtoc I drilling rig fell on the well. Nor can they capture spills that occur at the ocean floor. Without government oversight, scenario planning, and ongoing R&D spending, we are simply preparing for the last war – while technology keeps pushing the limits of our drilling capacity.

The RFF team that examined deepwater drilling has produced a series of seven papers examining these and other issues related to the incentives and regulatory approaches utilized to prevent future catastrophic spills from occurring. Details of our team’s findings and recommendations are available on a special page of the RFF website. As we continue to drill deeper, the technology will become more sophisticated and the risks will only grow. These risks might be acceptable – but only if there is serious consideration of the costs and benefits of drilling and containment/response technologies.

Human experience demonstrates that tragedies and disasters often provide learning experiences, although history also teaches that the right lessons are not always learned. One year after the Deepwater Horizon accident there should be little doubt that the future of offshore exploration has changed.

The BP accident was preventable if warning signals had been interpreted correctly, if a better management structure on the rig was in place, if higher operating standards had been adhered to, and if risk management had a higher priority. The cost to BP for these errors will exceed $20 billion in damages and restoration. But the actions of a single company are not a sufficient basis for judging an entire industry.

The cost and impact of this accident sent a strong message to other oil companies. And as a result, operating practices and equipment engineering are being re-examined to make them even better and to make sure that safety is the first operating priority. And clearly there will be changes in blowout preventer technology. Three oil companies have committed at least $1 billion to a new, rapid response system of containment equipment that can be deployed within 24 hours of a deepwater spill and capture 100,000 barrels of oil.

While improvements are being made, it should be remembered that offshore exploration and production have proven to be extremely safe. Before the BP accident, it had been 41 years since there had been an offshore accident. Over that period of time, 50,ooo wells had been drilled, including 14,000 in deepwater.

That is a record of a responsible industry and that record and the changes that have been made in the past year should provide the basis for renewed leasing to help meet US energy needs, reduce imports, and for job creating investments here. With renewed leasing in the Gulf of Mexico and off of the Atlantic coast, our domestic production could increase by 1 million barrels a day.

Unfortunately, the lesson learned by the Obama Administration has been tainted by its bias against domestic oil production. Although it became clear that the Deepwater Horizon accident was the result of poor management and operating practices, the Obama Administration blamed an entire industry and imposed a moratorium on offshore exploration and production. It is only now and very slowly issuing permits for the Gulf while maintaining the moratorium on the Atlantic OCS. As a result, we continue to import more than we have to and job creating investments go elsewhere. At the same time, the President has pledged support for offshore production in Brazil and promised to be one of the best customers for its oil.

As long as the Obama Administration substitutes ideology for energy and economic realities, our economy will perform less well than it should.

Despite the greener rhetoric and despite some industry so-called reforms, which should be pointed out were identified nearly a decade before the BP Macondo disaster but never implemented, nothing much has changed except House Republican amnesia. Dangerous deepwater drilling has again resumed in the Gulf of Mexico and basic environmental laws such as the National Environmental Policy Act, Endangered Species Act and Clean Water Act are still not being followed. And now industry wants to take his chain of horrors to the Arctic, where a spill even a fraction the size of the Macondo debacle would devastate an ecosystem that stabilizes weather for the entire continent and provides unparalleled food chain benefits for humans around the globe. Unfortunately, the Obama administration’s game plan of ostentatiously “dancing in the middle” will not do. Just because the Palin-wing of the Republican Party wants to drill everywhere doesn’t mean that saying “no” a handful of times to industry constitutes meaningful or responsible policy. Interior Secretary Ken Salazar, someone who once criticized George W. Bush’s offshore drilling plans as not aggressive enough, appears to have no conservation bottom line when it comes to fossil fuel pandering. The reality is that Salazar agrees with the prospect of “drill baby drill” the vast majority of the time. Follow the actions, not the words, of this troubled agency.

Here are ten common sense reforms that would make an immediate difference for cleaner and safer energy as it pertains to dangerous offshore oil drilling:

1. Close the Loophole: Nearly all drilling projects in the Gulf of Mexico, including the Macondo well, received waivers — called “categorical exclusions” — exempting them from in-depth environmental review. In May 2010, President Obama said the government would close the loophole; that has not occurred. While deepwater projects are now given an abbreviated environmental review, the categorical exclusion is still on the books. Drilling projects can be, and are still being, approved without environmental review. For the vast majority of drilling, which is in shallow water, the Bureau of Ocean Energy Management and Enforcement (formerly the Minerals Management Service) continues to invoke categorical exclusions. Also, in a flurry to get deepwater rigs drilling again in 2011, the Obama administration explicitly stated that projects approved prior to the BP oil spill would not need new environmental analyses. The Obama administration must eliminate the “categorical exclusion” for drilling plans and permits, and it must require regulators to commit to a full, public and expert environmental review.

2. Recognize Oil-spill Threats: The Bureau continues to permit drilling based on flawed assumptions about the risks of drilling to the Gulf of Mexico’s marine and coastal environment. Everyone was unprepared for the Deepwater Horizon oil spill in part because it was assumed that at most 30,000 barrels of oil might spill over the entire lifetime of drilling leases in the Gulf and that the most likely size of a large spill was 4,600 barrels. In just one day the Deepwater Horizon spill eclipsed these numbers, then continued to gush for months. In 2007, the government concluded that any deepwater spills would weather and degrade before reaching shore, and thus would have a minimal impact on the environment and wildlife. Now the Bureau has conceded that catastrophic oil spills are possible in light of Deepwater Horizon. Yet it is still discounting the risks of a spill while permitting dozens of new wells in both deep and shallow water. The Bureau must eradicate outdated assumptions that oil spills are unlikely and will have negligible impacts on the environment.

3. Update Environmental Analyses: Like oil-spill risks, past assumptions about environmental conditions in the Gulf need revising due to the oil-spill disaster. Hundreds of miles of coastline were oiled, and numerous dolphins, sea turtles and seabirds perished in the wake of the blowout. Most of the damage has yet to be discovered. The Gulf of Mexico is a biologically rich marine habitat, but it is also a vulnerable ecosystem with endangered sea turtles, whales and other imperiled wildlife. Secretary Ken Salazar’s Department of the Interior continues to approve drilling based on environmental conditions of the Gulf of Mexico before the oil spill, despite having admitted that its environmental analysis needs to be supplemented. The Bureau must revise its environmental impact statement for offshore oil and gas activities in the Gulf in light of the damage caused by the Deepwater Horizon explosion and spill, and it should take this into account prior to permitting new projects.

4. Curb Expansion of Risky Drilling: There are nearly 4,000 offshore oil and gas operations in the Gulf already, and the Obama administration is seeking to expand. Just before the Deepwater Horizon blowout, Interior Secretary Salazar announced plans for the largest U.S. expansion of offshore drilling in three decades. In the wake of the disaster, some of those areas are temporarily off the table, but others are still slated for new leases and development. Meanwhile, a recent report by the Interior Department revealed that more than two-thirds of offshore leases already issued in the Gulf of Mexico are inactive, without any oil exploration or production. Offshore drilling leases are a privilege and turn public resources into private benefit, so until and unless drilling is made completely safe new leases should be off the table.

5. Stop the Noise: Oil and gas exploration is an acoustic nightmare for marine mammals in the Gulf of Mexico, and the government has never complied with the laws intended to protect these animals from harassment and harm. Each year the Bureau hands out permits to oil companies to conduct seismic surveys to search for subsea reservoirs of oil and gas. These surveys are almost as loud as explosives, and the noise can cause hearing loss, interfere with communications, and disrupt normal breeding and feeding of sperm whales and other marine mammals. All of these permits are in plain violation of the Marine Mammal Protection Act and Endangered Species Act. The Bureau needs to fully comply with environmental laws prior to approving noisy seismic survey activities, and should take steps to protect the most sensitive areas through closures.

6. Reform the Oil-spill Liability Cap: Under the current Oil Pollution Act, the industry avoids full liability and compensation for damages in three ways. First, liability for damages not caused by “gross negligence, willful misconduct or violation of applicable federal regulation” is capped at $75 million per incident. Second, the highest level of financial responsibility that an offshore drilling source must demonstrate is $150 million, even if the entity has engaged in a grossly negligent or unlawful way. Third, the oil-spill trust fund is vastly underfunded, presently containing approximately $2 billion. The solutions are straightforward: raise and/or eliminate the liability caps and ensure through a “pay in” or “insurance” system that all costs of spills such as the BP disaster are fully compensated.. Congress needs to lift the liability cap and require that oil companies be held fully accountable for their drilling risks.

7. Shore Up Safety Concerns: Despite a new forensic report that the BP blowout preventer had a design defect, the Bureau has approved nearly a dozen new permits to drill in deepwater. The supposedly fail-safe blowout preventers are now known to be unable to cut through a bent pipe, and questions remain about whether they can cut through the thick joint sections that recur along the drill pipe. While the government has announced that it will develop new safety standards, it has pushed through permits before instating new requirements that address blowout preventer failures. If blowout preventers are the last line of defense to prevent an oil spill, concerns about their performance should be addressed prior to signing off on new drilling.

8. Review Use of Dangerous Dispersants: Dispersants and dispersed oil have been shown to have significant negative impacts on many forms of marine life, including plankton, turtles, fish, corals and birds. Dispersants release toxic breakdown products from oil that, alone or in combination with oil droplets and dispersant chemicals, can make dispersed oil more harmful to marine life than untreated oil. Both the short-term and long-term impacts of dispersants on marine life have not been adequately tested. As acknowledged by the EPA, the long-term effects of dispersants on aquatic life are unknown. The dispersants used in response to the BP oil spill, Corexit 9500A and Corexit 9527A, are toxic chemicals with still-untold effects. They are suspected of contributing to giant underwater oil plumes that are moving through deep water and leaving a trail of damaged and dead sea life on the ocean floor. The Obama administration must ensure that if any dispersants are approved for oil-spill response, they undergo thorough scientific review and do not contribute to added harmful impacts on wildlife, including endangered species.

9. Place a Permanent Moratorium on Arctic Drilling: The sensitive and biologically rich Arctic is no place for offshore drilling. As we saw with the Deepwater Horizon oil spill, oil companies are unable to prevent or stop an oil spill that is gushing at tremendous pressure undersea. In the Arctic, whose remote, harsh and frozen waters make oil-spill response unavailable, a spill would likely be impossible to stop. A ruptured well could be inaccessible for most of the year, oil-spill response equipment is distant, and dispersants may not work in cold water. And of course, the Arctic is a pristine and biologically rich ecosystem that is already under extreme stress from climate change. The Obama administration needs to call off plans for offshore drilling in the Arctic.

10. Pursue Cleaner Energy: Climate change is an overarching threat to global biodiversity; we need to shift course to prevent its worst effects. If current carbonpollution trends continue, scientists estimate that climate change will condemn one-third of the world’s plants and animals to extinction by 2050 and threaten up to two-thirds with extinction by 2100. But we can save most of these plants and animals if we take decisive and rapid action to reduce greenhouse gas pollution. Rather than drilling risky offshore oil wells, the Obama administration must rigorously regulate greenhouse gases under the Clean Air Act and shift away from dirty energy.