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Originally published June 14, 2010 at 9:27 PM | Page modified June 15, 2010 at 6:45 AM

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Offshore oil rigs are out of U.S. government's reach

Now, as the government tries to figure out what went wrong in the worst environmental catastrophe in U.S. history, this international patchwork of divided authority and sometimes conflicting priorities is emerging as a critical underlying factor in the crisis.

Tribune Washington Bureau

WASHINGTON —

The Deepwater Horizon oil rig that exploded in the Gulf of Mexico was built in South Korea. It was operated by a Swiss company under contract to a British oil firm. Primary responsibility for safety and other inspections rested not with the U.S. government but with the Republic of the Marshall Islands — a tiny, impoverished nation in the Pacific Ocean.

And the Marshall Islands, a maze of tiny atolls — some smaller than the ill-fated oil rig — outsourced many of its responsibilities to private companies.

Now, as the government tries to figure out what went wrong in the worst environmental catastrophe in U.S. history, this international patchwork of divided authority and sometimes conflicting priorities is emerging as a critical underlying factor in the crisis.

Under international law, offshore oil rigs like the Deepwater Horizon are treated as ships, not real estate. Even though the well spewing millions of gallons of oil from the ocean floor is located in U.S.-protected waters, oil companies are allowed to "register" the rigs that operate there with unlikely places such as the Marshall Islands, Panama and Liberia — reducing the U.S. government's role in inspecting and enforcing safety and other standards.

Critics suggest this registry process allows oil drillers and producers to shop for jurisdictions that offer them more favorable — and less demanding — terms.

"Today, these oil rigs can operate under different, very minimal standards of inspection established by international maritime treaties," said Rep. James Oberstar, D-Minn., who chairs the House Transportation Committee.

"Under international rules, an inspection by the Coast Guard of one of these foreign-flagged vessels is relatively modest; it can be done in a matter of hours. But if it is U.S.-flagged, the inspection can last weeks because the Coast Guard uses a fine-toothed comb," he said.

Confusing, understaffed

Some offshore-drilling experts, as well as some survivors of the April 20 explosion that killed 11 workers and led to the massive spill, say foreign registration also permitted a confusing command structure and understaffing of the platform — factors that may have contributed to the disaster.

Senior members of Congress — including Oberstar and Rep. Nick Rahall, a West Virginia Democrat who chairs the Natural Lands Committee — have begun looking into the inspection and manning issues, following up on troubling accounts from survivors. The House subcommittee on Coast Guard and Maritime Transportation will hold a hearing Thursday on foreign-flagged rigs in the Gulf of Mexico.

Different types of rigs are classified differently, and the Marshall Islands assigned the Deepwater Horizon to a category that permitted lower staffing levels. Critics say the rig may not even have met the lower staffing standards.

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"Over the years the manning dwindled down and down," said Douglas Harold Brown, chief mechanic aboard the Deepwater Horizon, who had been assigned to the floating drilling platform since shortly after it was manufactured in 2000. "I believe that safety was compromised by this," Brown said.

Brown's lawyer and others say the Marshall Islands licensed the Deepwater Horizon in a way that allowed its owner, Transocean, to place an oil-drilling expert — the so-called Offshore Installation Manager — ahead of a licensed sea captain in making decisions on the day of the explosion. This dual command structure emphasized oil production over safety and created confusion that delayed an effective response to the growing crisis aboard the Deepwater Horizon, he and others allege.

Officials at Transocean and the Marshall Islands reject these claims and deny taking short cuts. They say they fulfilled all requirements of the law and met the highest industry standards, as well as those of the U.S. Coast Guard.

Charges denied

Brian Kennedy, a spokesman for Transocean, called the complaints "egregiously unfounded and inflammatory."

The disorganization reported by crew members who survived the Deepwater Horizon explosion was the result of a tragic and unexpected disaster, not deficiencies in manning or safety standards on the part of Transocean, Kennedy said.

"At the end of the day, I think the fact that 115 people got off the rig that night will be viewed as a testament to the training, skill and heroic acts of dozens of crew members," he said.

A deep-water oil platform floats above the well, connected by thousands of feet of pipe, and is kept in position by thrusters and elaborate navigational systems.

The Marshall Islands deputy maritime minister, Captain Thomas Heinman, works out of a multistory office in Reston, Va., the headquarters of International Registries, a company that created a joint venture with the Marshall Islands to manage a fleet of 2,194 vessels, including 30 or so drilling platforms in the Gulf of Mexico.

Heinman said the manning requirements aboard the Deepwater Horizon "are equal to those of the U.S. and in accordance with the international standards." The Marshall Islands fleet has won numerous Coast Guard safety and other awards.

Since World War II, ships from the United States and other industrialized countries have been drawn to less-developed nations like the Marshall Islands, Panama and Liberia, havens known as "flags of convenience," that allow shippers to evade military embargoes, taxes, seafarers unions and, some critics say, tighter safety regulations.

Located about midway between Hawaii and Australia, the remote archipelago of the Marshall Islands has been the site of a bloody battle in World War II, U.S. nuclear tests in the early Cold War and an Army base where the U.S. forces tests their missile-defense network.

Growing shipping fleet

Today, the republic of low-lying atolls that stretch for miles across the equatorial Pacific is an economically troubled mini-nation of 65,000. It is also home to the world's fastest-growing shipping fleet, but the Marshall Islands' gross domestic product — just $134 million in 2008 — is a small fraction of the annual income of BP, which leased the rig from Transocean and reported $4 billion in profits that year.

Some members of Congress are expressing concern about the Marshall Islands and other countries that outsource their responsibilities to private companies. Coast Guard officials confirm that more rigorous inspection procedures apply to the relatively small number of oil rigs registered in the United States.

A foreign vessel will be reviewed by the Coast Guard, but the inspection is relatively cursory, relying on inspection reports prepared by outside firms that have been paid directly by the owners of the vessel.

The federal Minerals Management Service, which also has a role in overseeing offshore oil operations, deals only with issues "below the waterline" of the floating rig. It was not responsible for rig staffing, command structure or above-water operations.

John Konrad, a licensed captain who publishes the well-regarded maritime blog Gcaptain, and is consulting with Deepwater Horizon survivors, said oil rigs that constantly maneuver to maintain their station above a well should be under the command of a licensed sea captain.

Under Marshall Islands rules, the drilling manager was in command until the emergency struck. In practice, such dual command structures would not be accepted for U.S.-flagged operations like the Deepwater Horizon, experts say.

"Contrary to the generally recognized rules and traditions for this kind of vessel, on the Deepwater Horizon you had the guy who does the drilling plans able to make the call on safety," Konrad said.

As the Deepwater Horizon captain testified to investigators last month, he conferred with the drilling manager before he attempted to disconnect the rig. By the time a crew member decided on his own to push the emergency disconnect, it was too late.

Kennedy, the spokesman for Transocean, said, "Having two complementary positions that reflect the dual functionality of the rig, as the Horizon did, provides a clear but collaborative chain of command that has been employed by the industry for decades."

Coast Guard Lt. Cmdr. Brian Khey, a supervisor at the Outercontinental Shelf National Center of Expertise, said the manning and management rules for deep-water drilling vessels have not kept up with a changing industry.

"The offshore-drilling rules were last written in 1996," Khey said. Since then, offshore rigs have moved from depths of 3,000 feet to as much as 10,000 feet and the equipment has grown in complexity.

The Coast Guard is working on updated rules.

Rep. Gene Taylor, a Mississippi Democrat and Coast Guard veteran, faulted his former branch of the service for allowing foreign and privately regulated entities to proliferate in U.S.-protected waters.

"If you want the privilege of dealing in American territorial waters, then you should be an American-flagged, an American-built and American-owned vessel that should be inspected by the U.S. Coast Guard," said Taylor, whose district is home to shipbuilding and offshore energy companies.

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