by Obama Barack
But if my team and I could take pride in the substance of what we’d achieved, we also had to acknowledge what had become obvious even before the bill was signed: Dodd-Frank’s historic reforms weren’t going to give us much of a political lift. Despite valiant efforts by Favs and the rest of my speechwriters, it was hard to make “derivative clearinghouses” and “proprietary trading bans” sound transformational. Most of the law’s improvements to the system would remain invisible to the public—more a matter of bad outcomes prevented than tangible benefits gained. The idea of a consumer agency for financial products was popular with voters, but the CFPB would take time to set up, and people were looking for help right away. With conservatives denouncing the legislation as a guarantee of future bailouts and another step toward socialism, and with progressives unhappy that we hadn’t done more to remake the banks, it was easy for voters to conclude that the sound and fury around Dodd-Frank signified nothing more than the usual Washington scrum—especially since, by the time it passed, all anybody wanted to talk about was a gaping, gushing hole at the bottom of the ocean.
CHAPTER 23
THE FIRST OFFSHORE OIL DRILLING operations in the Gulf of Mexico were simple affairs, wooden platforms constructed in shallow waters beginning in the late 1930s. As technology advanced and America’s thirst for oil grew unabated, companies ventured farther and farther from land, and by 2010 more than three thousand rigs and production platforms sat off the coasts of Texas, Louisiana, Mississippi, and Alabama, dotting the horizon like castles on stilts. They became a potent symbol of oil’s central role in the regional economy: the billions in annual revenue it generated and the tens of thousands of people whose livelihoods depended, directly or indirectly, on siphoning up the remains of the ancient plants and animals converted by nature into the viscous black gold pooled beneath the ocean floor.
And when it came to rigs, few were more impressive than the Deepwater Horizon. Roughly thirty stories tall and longer than a football field, this mobile, half-billion-dollar semisubmersible could function in water as deep as ten thousand feet and drill exploratory wells several miles deeper than that. Operating a rig this size cost around $1 million a day, but major oil companies considered the expense well worth it. Their continued growth and profits depended on tapping potentially vast reservoirs buried at what were previously unreachable depths.
The Deepwater Horizon was owned by the Switzerland-based contractor Transocean and since 2001 had been leased by BP, one of the largest oil companies in the world. BP had used the rig to explore the U.S. section of the Gulf, discovering at least two enormous and potentially lucrative reservoirs beneath the seafloor. Just one of those fields, the Tiber, contained what was estimated to be a mind-boggling three billion barrels of oil. To access it, Deepwater crews had in 2009 drilled one of the deepest wells on record—35,055 feet under 4,130 feet of water, or farther beneath the ocean’s surface than the height of Mount Everest.
Hoping to repeat that success, BP dispatched the Deepwater Horizon to drill an exploratory well in another prospective oil field, called the Macondo, in early 2010. Located about fifty miles off the coast of Louisiana, the Macondo wasn’t quite as far down as the Tiber—a “mere” twenty thousand feet or so. But in ultradeep underwater drilling, there was no such thing as a routine job. Accessing each reservoir raised unique challenges, often involving weeks of tinkering, complex calculations, and ad hoc decisions. And Macondo proved to be an especially difficult field, mainly due to fragile formation and uneven levels of fluid pressure.
The project quickly fell weeks behind schedule, costing BP millions of dollars. Engineers, designers, and contractors disputed aspects of the well’s design. Nevertheless, by April 20, the well reached three and a half miles below the ocean’s surface and appeared almost complete. A team from Halliburton, a contractor on the project, injected cement down the well bore to seal the edges of the pipe. Once the cement had set, BP engineers began to conduct a series of safety tests before moving the Deepwater on to its next assignment.
Shortly after five p.m., one of those tests revealed possible gas leakage through the cement casing, signaling a potentially dangerous situation. Despite the warning signs, BP engineers decided to continue their process, pumping out the muddy lubricant used to offset pressure imbalances during drilling. By nine-thirty p.m., a powerful surge of gas had entered the drill pipe. A four-hundred-ton set of emergency valves called the blowout preventer—designed to seal off the well in the event of a sudden pressure increase—malfunctioned, allowing the highly pressurized and combustible gas to erupt through the platform and shoot a black geyser of mud lubricant up into the sky. Clouds of gas collected inside the rig’s engine control room and quickly ignited, rocking the entire structure with a pair of violent explosions. A tower of flames torched the night sky, as crew members scrambled into lifeboats or jumped into the debris-filled waters. Of the 126 persons aboard the rig, 98 managed to escape without physical harm, 17 were injured, and 11 platform workers remained unaccounted for. The Deepwater Horizon would continue to burn for the next thirty-six hours, its massive ball of fire and smoke visible for miles.
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I WAS IN the residence when I got word of what was happening in the Gulf, having just returned from a West Coast fundraising trip for Democratic congressional candidates. My first thought was “Not again.” Just fifteen days earlier, a coal dust explosion at Massey Energy’s Upper Big Branch Mine, in West Virginia, had killed twenty-nine miners, the worst mining disaster in nearly forty years. Although the investigation of that disaster was still in its early stages, we already knew that Massey had a long history of safety violations. In contrast, the Deepwater rig hadn’t had a serious accident in seven years. Still, I couldn’t help but connect the two events and consider the human costs of the world’s dependence on fossil fuels: the number of people who each day were forced to risk lungs, limbs, and sometimes their lives to fill our gas tanks and keep the lights on—and generate otherworldly profits for distant executives and shareholders.
I knew also that the explosion would have serious implications for our energy agenda. A few weeks earlier, I’d authorized the Department of the Interior to allow the sale of certain offshore leases, which would open oil exploration (though not yet actual production) in the eastern Gulf and some waters off the Atlantic states and Alaska. I was following through on a campaign promise: In the midst of surging gas prices and with the McCain-Palin proposal to open America’s coastline to wholesale drilling gaining traction in public polls, I’d pledged to consider a more limited expansion of drilling as part of an “all of the above” energy strategy. As a matter of policy, any transition to a clean energy future would take decades to complete; in the meantime, I had no problem with increasing U.S. oil and gas production to reduce our reliance on imports from petrostates like Russia and Saudi Arabia.
Above all, my decision to allow new exploratory drilling was a last-ditch effort to salvage our climate change legislation, which was by then on life support. The previous fall, when GOP senator Lindsey Graham had agreed to help put together a bipartisan climate bill, he had warned that we’d have to give something up in order to win enough Republican support to overcome a filibuster, and more offshore drilling had been at the top of his list. Taking Graham at his word, Joe Lieberman and John Kerry spent months working in tandem with Carol Browner, trying to persuade environmental groups that the trade was worth it, pointing out that the environmental risks of offshore drilling had been reduced by improvements in technology and that any final agreement would preclude oil companies from operating in sensitive areas like the Arctic National Wildlife Refuge.
At least some environmental groups were prepared to play ball. Unfortunately, as the months passed, it became increasingly obvious that Graham couldn’t deliver on his end of the bargain. It’s not that he didn’t try. He worked to line up the oil companies behind a deal and courted modera
te Republicans like Susan Collins and Olympia Snowe, as well as oil-state senators like Alaska’s Lisa Murkowski, hoping they’d cosponsor the bill. But no matter how many concessions Kerry and Lieberman were prepared to make, Graham couldn’t get any takers within the GOP caucus. The political price for cooperating with my administration remained too high.
Graham himself had started taking heat for his work on the climate bill, from both constituents and conservative media. His demands for staying with the bill escalated, making it harder for Kerry to keep environmental groups on board. Even our announcement that we were laying the groundwork to open up new areas to drilling drew Graham’s ire; rather than viewing it as a show of good faith on our part, he complained that we’d undercut him by taking away a key bargaining chip. Rumors began circulating that he was looking for an opportune time to abandon the effort altogether.
All this came before the Deepwater accident. With newscasts suddenly flashing hellish images of a burning rig, we knew that environmental groups were sure to back off any bill that expanded offshore drilling. That, in turn, would give Graham the excuse he needed to jump ship. No matter how I sliced it, I could draw only one conclusion: My already slim chances of passing climate legislation before the midterm elections had just gone up in smoke.
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THE MORNING AFTER the Deepwater blowout, I took some solace in reports that much of the oil released by the explosion was burning off at the ocean’s surface, at least slightly reducing the prospects of severe environmental damage. Carol confirmed that BP’s emergency vessels and the U.S. Coast Guard had made it to the scene quickly, that search-and-rescue operations for the missing rig workers were ongoing, and that we were in close contact with state and local authorities. Under a federal law passed in the wake of the 1989 Exxon Valdez tanker accident in Alaska, BP bore full responsibility for cleaning up the spill. Nevertheless, I mobilized the Coast Guard, as well as the EPA and the Department of the Interior, to assess the damage and provide any support the company might need.
Figuring we had a reasonable handle on the situation, I kept to my schedule, traveling to New York the following day to give a speech on Wall Street reform. By the time I arrived, though, the disaster had intensified. Weakened by the ongoing inferno, the entire Deepwater structure had collapsed and sunk into the ocean, spewing black smoke as all thirty-three thousand tons of it disappeared from view, almost certainly damaging the undersea apparatus beneath it. With the unknowns rapidly multiplying, I asked Rahm to set up a briefing upon my return, gathering U.S. Coast Guard commandant Admiral Thad Allen, Janet Napolitano of Homeland Security, and Secretary of the Interior Ken Salazar, whose department was responsible for overseeing offshore drilling. As it turned out, the only time we could fit in a meeting was six p.m.—right after I finished addressing the couple hundred people we’d invited to a previously arranged Rose Garden reception celebrating the fortieth anniversary of Earth Day.
It was a bit of cosmic irony that I was in no mood to appreciate.
“Hell of a farewell tour we’re giving you, Thad,” I said, shaking hands with Admiral Allen as he and the rest of the group filed into the Oval Office. Stout and ruddy-faced, with a whisk-broom mustache, Allen was just a month away from retiring after thirty-nine years of service in the Coast Guard.
“Well, hopefully we can get this mess under control for you before I go, Mr. President,” Allen replied.
I signaled for everyone to have a seat. The tone grew somber as Allen explained that the Coast Guard had diminished hopes when it came to the search-and-rescue operations—too much time had passed for any of the Deepwater’s eleven missing crew members to have survived in open seas. As for the cleanup, he reported that BP and the Coast Guard response teams had deployed specially equipped boats to skim oil left from the explosion off the water’s surface. Fixed-wing aircraft were scheduled to begin dropping chemical dispersants to break up the oil into smaller droplets. And the Coast Guard was working with BP and the impacted states to pre-position booms—floating barriers of sponge and plastic—to help prevent the possibility of oil spreading to the shore.
“What’s BP saying about liability?” I asked, turning to Salazar. Balding and bespectacled, with a sunny disposition and a fondness for cowboy hats and bolo ties, Ken had been elected to the Senate in 2004, the same year I was. He’d become a trusted colleague and was an ideal choice for interior secretary, having led the Department of Natural Resources in Colorado before becoming the state’s first Hispanic attorney general. He’d grown up in the stunningly beautiful ranchlands of south-central Colorado’s San Luis Valley, where branches of his family had lived continuously since the 1850s, and was intimately familiar with the dueling impulses to exploit and to conserve the federal lands that had shaped so much of that region’s history.
“I heard from them today, Mr. President,” Salazar said. “BP has confirmed that they’ll pay any damages that aren’t covered by the Oil Spill Liability Trust Fund.” This was good news, I thought. While individual oil companies were responsible for the entire cost of cleaning up their spills, Congress had put a paltry $75 million cap on their obligation to compensate third parties like fishermen or coastal businesses for damages. Instead, oil companies were required to pay into a joint trust fund that would cover any excess damages up to $1 billion. But Carol had already alerted us that if the oil slick wasn’t sufficiently contained, that might not be enough. By securing an early pledge from BP to make up any shortfall, we could at least provide affected states with some assurance that their residents would have their losses covered.
At the end of the meeting, I asked the team to keep me informed of new developments and reminded them to use whatever federal resources we had at our disposal to mitigate the economic and environmental impacts. Walking everyone out of the Oval, I noticed Carol looking pensive. I asked her to hang back for a minute so I could speak to her alone.
“Is there something we didn’t cover?” I asked.
“Not really,” Carol said. “I just think we need to prepare for the worst.”
“Meaning?” I asked.
Carol shrugged. “BP’s claiming that oil isn’t leaking out of the well. If we’re lucky, they’ll turn out to be right. But we’re talking about a pipe that travels a mile down to a well on the bottom of the ocean floor. So I doubt anyone knows for sure.”
“What if they’re wrong?” I asked. “What if there is a leak beneath the surface?”
“If they can’t seal it quickly,” she said, “then we’ve got a nightmare on our hands.”
* * *
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IT TOOK LESS than two days to confirm Carol’s fears. The Macondo well was discharging oil below the surface—and not just a trickle. At first, BP engineers identified the leak as coming from a break in the pipe that had occurred when the rig sank, discharging an estimated one thousand barrels of oil into the Gulf each day. By April 28, underwater cameras had discovered two more leaks, and those estimates had risen to five thousand barrels a day. At the surface, the oil slick had grown to roughly six hundred square miles and was close to reaching the Louisiana coast, poisoning fish, dolphins, and sea turtles and threatening long-term damage to the marshes, estuaries, and inlets that were home to birds and other wildlife.
Even more alarming was the fact that BP didn’t seem to know how long it would take to successfully plug the well. The company insisted that there were several viable options, including the use of remotely operated vehicles to unjam the blowout preventer, stuffing the hole with rubber or other materials, placing a containment dome above the well to funnel oil up to the surface so it could be collected, or drilling intersecting relief wells so that cement could be pumped in to block the flow of oil. According to our experts, however, the first three of those options weren’t guaranteed to work, while the fourth might “take several months.” At the rate we believed oil was gushing out, that coul
d add up to a nineteen-million-gallon spill—about 70 percent more than had been released during Exxon Valdez.
Suddenly we faced the prospect of the worst environmental disaster in U.S. history.
We assigned Thad Allen the job of national incident commander; imposed a thirty-day moratorium on new offshore drilling, as well as a fishing ban in the contaminated area; and declared the Macondo disaster a “spill of national significance.” The federal government coordinated a response across many entities, including engaging with citizen volunteers. Soon more than two thousand people were working around the clock to contain the spill, operating an armada that comprised seventy-five vessels, including tugboats, barges, and skimmers, plus dozens of aircraft and 275,000 feet of flotation booms. I sent Napolitano, Salazar, and Lisa Jackson of the EPA to the Gulf to monitor the work, and I told Valerie I wanted her talking to the governors of Louisiana, Alabama, Mississippi, Texas, and Florida (all five of whom happened to be Republican) every single day to find out what more we could do to help.
“Tell them if they’ve got a problem, I want to hear from them directly,” I said to Valerie. “I want us to be so goddamn responsive that they get sick of hearing from us.”
It’s fair to say, then, that by May 2, when I visited a Coast Guard station in Venice, Louisiana, to get a firsthand look at the cleanup operations, we were throwing everything we had at the disaster. As with most presidential trips, the point was not so much to gather new information but to communicate concern and resolve. After delivering a press statement in the driving rain outside the station, I spoke with a group of fishermen, who told me they’d recently been hired by BP to lay down booms across the path of the spill and were understandably worried about the spill’s long-term impact on their livelihoods.
