Will the BP Oil Spill Kill Offshore Drilling?

BP has been trying hard to burnish its public image in recent years after being hit with a pair of environmental disasters, including a fatal refinery explosion in Texas and a pipeline leak in Alaska. One major step was to announce, in 2007, that it had hired a high-powered advisory board that included former EPA director Christine Todd Whitman, former Senate majority leader Tom Daschle, and Leon Panetta, who were each paid $120,000 a year. (Panetta left when he became President Obama's CIA director.) Two years ago the oil giant's chief executive, Robert Malone, flew board members out to the Gulf of Mexico on a helicopter to demonstrate the safeguards surrounding BP's advanced drilling technology. "We got a sense they were really committed to ensuring they got it right," Whitman told NEWSWEEK.

Now BP, formerly known as British Petroleum, finds itself blamed for what could prove to be the worst oil spill in U.S. history. And only weeks after Obama announced an ambitious plan to open up more U.S. offshore waters to oil drilling, shunting aside environmental concerns from his own Democratic Party, his administration is facing a comeuppance from hell. "There was a lot of wishful thinking, I guess," says Villy Kourafalou, a scientist at the University of Miami's Rosensteil School of Marine and Atmospheric Science. "The new technologies were said to be so wonderful that we'd never have an oil spill again." Rep. Frank Pallone (D-N.J.), who had sought to block the expanded drilling, says the oil and gas industry was pushing this idea hard. "They said, 'We'll never have a repeat of Santa Barbara,'?" referring to the 1969 rig explosion off the California coast. Both the Bush and Obama administrations "were buying the line that the technology was fine," Pallone adds.

BP pressed hard to make that point in D.C. Its PR efforts included payments of $16 million last year to a battery of Washington lobbyists, among them the firm of Tony Podesta, the brother of former Obama transition chief John Podesta. Last fall, after the U.S. Interior Department proposed tighter federal regulation of oil companies' environmental programs, David Rainey, BP's vice president for Gulf of Mexico exploration, told Congress that the proposal was unnecessary. "I think we need to remember," he said, that offshore drilling "has been going on for the last 50 years, and it has been going on in a way that is both safe and protective of the environment."

Now those who waxed confident about offshore drilling are running for cover, and there are major questions about whether the Obama drilling plan will have to be shelved. The administration also sought to dispel any comparisons to the Bush administration's laggard response after Hurricane Katrina. For nearly a week, from the fatal explosion that sank the oil rig on April 22 until April 28, the government appeared to accept BP's estimate of a 1,000-barrel-per-day spill, when it was at least five times worse. "I'm surprised that there weren't more robust standby procedures in place," says John Parry of IHS Herold, an energy-research firm. Interior Secretary Ken Salazar and Homeland Security Secretary Janet Napolitano noted that most of the early efforts had been devoted to rescuing the 11 missing oil workers.