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Leading the way into deep water

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NEW ORLEANS — On March 5, 1997, an obscure federal official with a puckish grin entered a hotel ballroom here and greeted 1,000 jittery oilmen on what would prove a landmark day.

For years, fading interest in the Gulf of Mexico had punished the local economy and left Louisiana to mourn its "Dead Sea." Now, rising oil prices and new technology were setting off the deep-water version of a gold rush. Interest in drilling ran so high that the official, Chris Oynes, was heading into the annual lease auction with a record number of sealed bids.

In giddier times before the bust, his predecessor presided over the auction in a jaunty red blazer, but Oynes was far too conservative for that. Or so everyone thought — until he opened his briefcase and brought down the house with a size 46 scarlet jacket, an omen of the coming deep-water boom.

"They knew symbolically what this meant," Oynes said in a recent interview. "In Louisiana terms: ‘Let the good times roll."’

Now the gulf is reeling from the worst oil spill in U.S. history, after 5 million barrels of toxic sludge escaped from a defiant mile-deep hole that BP finally cemented last week. Deep-water drilling has been temporarily banned. And the Minerals Management Service, the agency that led the way into the deep-water age, has been abolished, ridiculed as a pawn of the oil industry it was meant to oversee. And the gulf office that Oynes ran for many years has drawn particular scorn.

The causes of the spill remain unclear, but a number of the agency’s actions have drawn fire: It shortened safety and environmental reviews; overlooked flaws in the spill response plan; and ignored warnings that crucial pieces of emergency equipment, blowout preventers, were prone to fail.

For decades, Washington and Louisiana were joined by the minerals agency. Washington got oil and royalty fees; Louisiana got jobs; and the agency got frequent reminders of the need to keep both happy.

Seldom do regulators work in a place so dependent on the industry they oversee. From the top of Louisiana’s tallest building (One Shell Square) to the bottom of its largest aquarium (with a sunken rig), oil saturated the state’s culture long before it covered its marshes. It is equally prized as a source of jobs and as a source of tax revenue.

Few people have mattered more in that world than Oynes, 63, who held top jobs in the gulf office for 21 years and outlasted 11 agency directors before resigning abruptly in May. Many branches of government have parallel figures, little-known civil servants whose knowledge and staying power lend them great sway.

Cobbled together three decades ago from rival corners of the Interior Department, the minerals service had a three-part charge: issuing leases, collecting royalties and overseeing the dangerous work at sea. His superiors in Washington set broad policy, but Oynes, a heavyset conduit of high energy, dominated the gulf with 12-hour days and a zeal for detail. His decisions guided which drilling plans would be approved, what safety checks would be required and how platforms would be inspected.

Raised in conservative Orange County, Calif., he shared nothing of the Mardi Gras spirit for which Louisiana was known — only its belief in the importance of oil and its respect for the people who mined it. For years, he told associates that modern engineering made spills all but impossible, and harmless if they did occur.

Since the Deepwater Horizon rig exploded on April 20, Oynes has made no public comments. But angry at what he called lampooning depictions of the agency, he recently broke his silence, offering his account of what happened on his watch. He aired many problems, but few regrets.



If modern Louisiana history could be squeezed on a bumper sticker, this is what it would say: Louisiana (HEART) Petroleum.

Or that was the message conveyed last year when Oynes joined other Interior Department officials at a hearing in New Orleans on offshore drilling. At hearings elsewhere, industry critics largely set the tone. But in New Orleans, a grandmother waited for hours to say, "Drill, and drill vigorously."

A school principal said the majority of his students’ parents worked for the oil industry. A drilling engineer lauded the industry’s safety record. "The incident rate for a real estate agent is higher than someone working on the rigs," he said.

As things go in Louisiana, the engineer happened to be Oynes’ best friend.

Five states border the Gulf of Mexico, but Louisiana’s bond with subsea petroleum is unique.

Marshes blur distinctions between drilling on land and at sea. The continental shelf slopes gently. There are no white sand beaches to protect, only river mud.

In some states, drilling has been seen as a threat to native cultures. In Cajun country, it opened a door to the middle class — even as a typical offshore schedule (two weeks on, two weeks off) let workers still fish, hunt and farm.

"The industry didn’t destroy the old culture — it saved it," said Diane Austin, an anthropologist at the University of Arizona.

What it did largely destroy, through cash and cunning, was significant political opposition. Local groups have been typically been weak and small — no match for an industry that Oynes calls the "900-pound gorilla."

As Congress debated the landmark 1978 law that governs offshore activity, Louisiana officials argued for a light federal touch.

Elsewhere in the country, the law requires companies to submit detailed proposals for offshore activities, called Drilling and Production Plans. In the gulf, it specifically forbids them. Though the minerals agency invented an alternative (a Development Operations Coordination Document), it provides for lesser levels of review.



As the gulf office adapted to the deep-water age, it was riven by a tribal split: engineers versus environmental scientists.

The engineers were action-oriented and confident; they trusted machines. The scientists were deliberative and academic; they worried about what they might not know. Engineers came largely from Louisiana. Scientists often came from out of state. The engineers called their rivals the "free thinkers down on the third floor."

"We had huge conflicts," said Hammond Eve, who ran the environmental division for eight years before retiring in 2004.

Both sides knew which division held the power. The law gave the head of field operations — the lead engineer — the authority to approve exploration and drilling plans. To win changes, the environmental scientists had to work through him.

When tensions arose between the factions, Oynes cast himself as the neutral broker, but subordinates sensed where his instincts lay. "From my perspective, we can’t sit here and talk about it forever," he said, describing his thinking. "We have to get on with things."

The result was a culture that favored trust over doubt, saying yes over saying no.

One day in a staff meeting Eve raised a question: With wells being sunk at ever-greater depths, what are the chances of a blowout, a catastrophic eruption?

Oynes said the answer would come from the head of field operations. "And later on the answer came back that it was impossible," Eve said. "They said the blowout preventer will take care of it." (That head of field operations, Donald C. Howard, would be fired in 2007 for accepting gifts from a drilling company, and pleaded guilty to lying on his ethics form.)

The clash between the agency’s environmentalists and engineers dominated a project meant to guide the agency into the deep-water age, a two-year study of new risks called an environmental assessment. Published in 2000, it framed the agency’s approach for the next decade. It reads like a document at war with itself.

It counted 151 well blowouts in the previous 25 years, about one every two months. It said a quarter had led to spills. It questioned the effectiveness of chemical dispersants and cited the difficulties of drilling relief wells. In noting that a deep-water blowout could take up to four months to control, it all but forecast the BP disaster.

Then it quickly silenced its own alarm bells, casting spills as a "very low probability event" and noting that companies had "speculated" that deep-water blowouts might cap themselves (because of loose sediment on the ocean floor). It saw no need for new safeguards or an environmental impact statement, a more rigorous review that would have included public debate.

Why not do one, just to be safe?



For most of his career, Oynes, like his agency, flew beneath the public radar. But in 2006 he was dragged before Congress for his role in a costly mistake. For him, and for the minerals service, it forecast troubles to come.

To encourage more production, Congress had passed a law in 1995 suspending royalties on deep-water tracts, with payments to resume if oil prices exceeded a certain threshold. But the minerals agency somehow dropped the threshold provision from two years of contracts. When prices unexpectedly rose, the companies pocketed billions of dollars.

The inspector general called the episode a "jaw-dropping example of bureaucratic bungling." While he placed much of the fault on the Washington staff, two industry representatives recalled telling Oynes about the omission. Oynes testified that he did not recall the exchange.

The incident has trailed Oynes ever since, but most accounts omit the coda. Congress drafted the law so poorly that the federal courts invalidated the thresholds for the entire five-year program, at a cost of up to $60 billion. Congress had derided Oynes while committing the greater mistake.

A year after his congressional thrashing, Oynes was promoted in 2007 to a top Washington job. He felt like he was capping a storybook career. The Dead Sea had come to life, technology had made quantum leaps and there had not been a single major spill.

On the morning of April 21, Oynes got an e-mail saying that 11 people were dead. The news got worse from there. Nothing would stop the toxic geyser a mile below the sea. The blowout preventer had failed.

Time magazine placed him on its "dirty dozen" list of people most responsible for the spill. In New Orleans, The Times-Picayune reprised his role in the blown royalties affair. A congressman hailed his planned departure from the agency as a "an opportunity to begin anew."

As Oynes was packing up, the inspector general’s office released a report, long in the making, about the agency’s Lake Charles office. It depicted an ethics-free zone, where inspectors routinely took industry gifts and did favors for industry friends.

On May 12, the administration announced that the minerals service was being abolished. It would be split into three agencies: one to issue leases, one to collect royalties and one to supervise offshore operations.

After decades of quiescence, Louisianians are suddenly appearing at oil and gas protests. But what they object to is the federal government’s six-month ban on deep-water drilling.

Two federal courts in Louisiana invalidated the ban (though the administration created a new one). While the accident "is an unprecedented, sad, ugly and inhuman disaster," wrote Judge Martin Feldman of Federal District Court, "oil and gas production is quite simply elemental to gulf communities." He said halting would have "immeasurable effects" on the economy.

Jack Begg and Kitty Bennett contributed research.

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