Spill Investigator Sees Role for Self-Policing Agency

William Reilly, co-chairman of President Barack Obama’s commission investigating the BP Plc oil spill, said the oil industry could benefit from a self-policing agency similar to one that monitors the safety of nuclear power plants.

“I’m very interested in using that approach, as an addition, not as a substitute for regulation, but as a way to raise the bar,” Reilly, former administrator of the Environmental Protection Agency, said in an interview today.

Proposing self-regulation may be a hard sell to an angry Congress and public, Reilly acknowledged.

Since BP’s exploratory, deep-water well in the Gulf of Mexico exploded on April 20, killing 11 workers and leaving an open wellhead, millions of gallons of oil have spilled.

Reilly said he presented the idea of a self-policing agency to Obama, who was skeptical.

“He said, ‘I wonder if the country would accept that,’” Reilly said. “The public did accept it,” he said, when the idea came from “an even more reviled industry in the 1980s.”

The model Reilly has in mind is the Institute for Nuclear Power Operations, an industry group created after the Three-Mile Island nuclear power generator accident to establish and enforce industry best practices. The institute inspects all nuclear plants every 18 to 24 months.

Insurance Costs

“They descend on these reactors and spend two weeks, and they just take the place apart. They look at training, practices, adequacy and modernity of the equipment,” Reilly said. “Then they give them a grade when they leave and that grade is communicated to the Nuclear Regulatory Commission and the insurance industry, and it affects their insurance costs.”

Obama named Reilly, a Republican, and Democrat Bob Graham, a former U.S. senator and Florida governor, to lead a commission charged with finding the “root cause” of the Gulf oil spill. The commission will examine what was going on at BP long before April 20, Reilly said.

He said the commission also will examine the federal agency formerly known as the Minerals Management Service and inadequacies in its oversight and cleanup capabilities.

“The response capability is so primitive relative to the breathtaking tech advances that characterize this industry,” he said.

Reilly was administrator of the U.S. EPA in 1989 when the Exxon Valdez ran aground in Prince William Sound, spilling 262,000 barrels of oil into the waters off Alaska.

To contact the reporter on this story: Alison Fitzgerald in Washington at Afitzgerald2@bloomberg.net.

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