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BP PLC Chief Executive Tony Hayward met with lawmakers on Capitol Hill Tuesday, advancing the oil giant's campaign to avoid the sort of political backlash that has engulfed companies such as Goldman Sachs Group Inc. and Toyota Motor Corp.

The push on Capitol Hill, arising after a rig leased by BP burned and sank in the Gulf of Mexico last month and the well it was drilling began leaking oil, comes as the company said it hopes as soon as Thursday to lower the first of three containment domes over the principle underwater leak. The dome would then pump the escaping oil to ships on the surface.

There are risks that BP's effort could backfire, potentially worsening the problem if the 125-ton dome crushed other pipes. A BP spokesman said the dome "will significantly reduce the amount of oil reaching the surface."

Success would go a long way toward easing the pressure Mr. Hayward is encountering from the White House and Congress.

President Barack Obama and other officials have made clear that they intend to hold BP accountable for all clean-up costs.

Interior Secretary Ken Salazar said Sunday the administration planned to keep "keep the boot on the throat" of BP—a phrase that has since become part of a Democratic fund-raising appeal.

In an interview with the BBC Monday, Mr. Hayward dismissed talk of a rift between BP and the Obama administration, saying an "incredible co-operative relationship" had been established with the federal authorities.

Mr. Hayward's briefings for lawmakers Tuesday followed lengthy consultations with administration officials the day before. It was his third visit to the capital since the Deepwater Horizon rig exploded on April 20 and later sank in 5,000 feet of water, killing 11 workers. "I believe passionately that we will all win this," he told reporters.

Lawmakers had sharp words after his briefings. "It was pretty clear here that there was not a proper preparation for the worst-case scenario," said Rep. Ed Markey (D., Mass.)

BP is eager to show that it plans to spend whatever it takes to stop the underwater gusher and clean up the spill. The London-based company said Tuesday it was spending around $7 million a day on the effort and that it had wired an initial $25 million each to the states of Louisiana, Mississippi, Alabama and Florida to help pay for their response plans.

BP shares rose 2% to $51.20 in New York Stock Exchange trading on Tuesday after mostly falling since the disaster.

Aided by the first calm weather in days, BP and various government agencies have commissioned a flotilla of more than 700 fishing vessels to stretch and in some cases repair hundreds of miles of booms along the Louisiana shoreline.

The company has used more than 156,000 gallons of chemical dispersants to break up the oil. So far, the oil slick hasn't yet touched land.

The actions have led some officials to tamp down fears of an unprecedented disaster in the Gulf. On CNN, Mississippi Gov. Haley Barbour said that, based on overhead images, 80% of the spill "is literally just sheen or film right on top of the water." He called the spill "a manageable problem."

BP has sought to avoid the mistakes made by Exxon Mobil after the huge Exxon Valdez tanker spill in Alaska in 1989, as well as its own lapses in the wake of a 2005 refinery fire in Texas that killed 15 people. In the Exxon case, Lawrence Rawl, Exxon's chairman at the time, stayed in New York rather than fly out to Alaska, and it took him six days after the tanker ran aground to speak publicly about the disaster.

BP was also criticized for its muddled initial response to the Texas incident. The company also hopes to avoid the harsh congressional scrutiny Goldman has received over mortgage-securities accusations and that Toyota has faced over concerns about its vehicles' safety.

Mr. Hayward has accepted full responsibility for cleaning up the spill and said BP will honor all legitimate claims for damages. When disasters like this occur, said BP spokesman Andrew Gowers, "corporations can make them worse by appearing dilatory, obfuscatory or legalistic in their response."

Facing an inevitable barrage of litigation, BP agreed in federal court Tuesday to an arrangement that would preserve the legal rights of any fishermen or other parties who agree to help in the clean-up effort.

BP had previously asked fishermen joining the clean-up effort to sign contracts limiting their rights to sue BP for damages that might come up in the work.

Mr. Gowers dismissed as "nonsense" a claim by a worker who was on the platform at the time of the explosion that the oil rig had been drilling deeper than its permitted depth. He said the rig was permitted to drill to 20,211 feet and it had drilled to 18,360 feet.

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The small U.S. agency that oversees offshore drilling doesn't write or implement most safety regulations, having gradually shifted such responsibilities to the oil industry itself for more than a decade.

Instead, the Minerals Management Service—now caught up in the crisis of the Deepwater Horizon rig that for weeks has sent crude oil gushing into the Gulf of Mexico—sets broad performance goals for the industry. Oil producers and drilling companies are then free to decide for themselves how to meet those goals, industry executives and former regulators say.

A Wall Street Journal examination of the MMS's track record found several instances of the agency identifying potential safety problems and then either not requiring follow-up or relying on the industry to craft a solution. In some cases, the industry didn't do its part.

The Journal also found that the safety record of U.S. offshore drilling compares unfavorably, in terms of deaths and serious accidents, to other major oil-producing countries. Over the past five years, an offshore oil worker in the U.S. was more than four times as likely to be killed than a worker in European waters, and 23% more likely to sustain an injury, according to International Association of Drilling Contractors data, which is adjusted for man-hours worked.

Asked about The Journal's findings on its safety record and practices, MMS officials said in an interview Wednesday that the agency plans to toughen its oversight. Any new regulations emerging from the current crisis "will be a prescriptive regulation," said Lars Herbst, head of the MMS' Gulf of Mexico region. He said the agency is unlikely to give the industry much latitude to decide how to make changes. "After this accident investigation is done, I would bet there won't be any performance-based regulation that comes out to address any problem that we may uncover," he said.

Mr. Herbst questioned the data on deaths, saying the number of working hours could be underreported in the U.S. That would make the U.S. fatality rate look higher.

The agency points out it does conduct numerous inspections. It leases 14 helicopters to ferry inspectors, often unannounced, out to the 3,800 drilling rigs and platforms in the Gulf of Mexico that it oversees. But the number of rigs inspected has fallen significantly in recent years, according to agency data, from 1,292 in 2005 to 760 by 2009.

Defenders of the agency say enforcement isn't its primary responsibility. Stephen Allred, who as Assistant Secretary of the Interior oversaw MMS from 2006 to 2009, said the agency does conduct spot inspections of oil rigs, and checks operators' compliance with safety procedures. However, "Their role is not to baby-sit" the operators, he said. The agency's primary task during inspections is to verify how much oil is being pumped, which is key to another MMS duty, maximizing payments the government receives for oil and gas rights from energy producers.

In one instance late last year, an oil company complained about the inadequacy of the agency's safety investigations. In November, ATP Oil & Gas Corp. sued MMS alleging it was incomplete in investigating a fatal accident at an ATP rig. The lawsuit, filed in federal court in Washington, D.C., alleged an MMS investigator misstated the accident's location, didn't interview the two eyewitnesses to the event, and told ATP to take corrective action within 14 days without identifying problems that needed to be fixed. The suit was settled in March, with ATP paying a $20,000 civil penalty, according to a company lawyer.

An MMS spokesman declined to comment. An MMS court filing gave denials of some ATP claims, including the matter of the accident's location.

Some former employees say that MMS, which was founded in 1982 and is part of the Interior Department, has a built-in conflict of interest: It is supposed to be a watchdog that halts drilling when it spots unsafe behavior. But it is also supposed to promote energy independence and to generate government revenue from drilling on government lands, including the outer continental shelf.

Of MMS's fiscal 2010 budget of $342 million, nearly half comes from the oil industry in the form of fees and rental receipts, known as "offsetting collections." That's one reason why collecting oil and gas royalties is emphasized at the agency, former and current officials say.

The U.K.—home to one of the largest offshore-drilling industries in the world—has taken a different regulatory approach. In 1998, after a fire aboard a North Sea platform killed 167 people, the U.K. separated its offshore safety-oversight agency from the revenue-gathering side.

After that change, the U.K.'s safety record improved. The improvements also came at a time of increased mechanization of rigs, which improved the safety of offshore drilling world-wide.

Told of The Journal's findings on MMS's track record, Sen. Bill Nelson (D., Fla.), a longtime opponent of drilling off his state's coast, castigated the agency. "If MMS wasn't asleep at the wheel, it sure was letting Big Oil do most of the driving," he said.

In the U.S., the MMS has been criticized for giving oil companies too much sway in the royalty area, not just regulatory oversight. A 2008 Interior Department Inspector General report faulted MMS for modifying royalty payment contracts in ways that "appeared to inappropriately benefit the oil companies."

U.S. oil-industry executives and current and former regulators say the U.S.'s self-regulatory approach has worked for many years. "There has been a very good record in deep water, up until the point of this accident," said Mr. Herbst of the MMS.

They also argue that offshore operations have become so complicated that regulators ultimately must rely on the oil companies and drilling contractors to proceed safely. "The regulator sets the frameworks, sets the guidance, monitors and inspects," said Elmer P. Danenberger III, the longtime head of the MMS's offshore regulatory programs, who retired in December. "But the regulator isn't conducting the operation."

Many questions remain about last month's sinking of the Deepwater Horizon, including why the rig caught fire, why fail-safe devices didn't work and why the industry wasn't better prepared for a spill of this magnitude.

In recent years, oil wells in the U.S. were more likely to go out of control—as was the case with the Deepwater Horizon's blowout last month—than in other countries.

According to data from the International Regulators' Forum, a group of offshore regulatory bodies, the U.S. reported five major "loss of well control" incidents in 2007 and 2008, the most recent years for which data are available.

The five other countries in the forum that reported the data (U.K., Norway, Australia, Canada and the Netherlands) reported no such incidents. Last year, those five nations had roughly half as much drilling activity as the U.S.

Over the past decade, the number of MMS enforcement cases that resulted in penalties ranged from a high of 66 in 2000 to a low of 20 last year. A report by the agency's inspector general in 2000 found that it seldom referred safety or environmental violations to the Justice Department for criminal prosecution, even when it should have done so.

To explain its shift toward industry self-regulation, the MMS in a 2005 rule change pointed to a 1996 law that encouraged federal agencies to "benefit from the expertise of the private sector" by adopting industry standards. Mr. Herbst also pointed out that the MMS often has a seat on panels setting industry standards.

The Journal has identified instances in which MMS didn't follow through on potential safety problems that the agency had asked the industry to examine. In 2000, the agency asked the industry for advice on how to deal with problems with cement used to keep oil and natural gas from bubbling to the surface and exploding. A decade later, the industry is still working on its recommendations, according to the American Petroleum Institute. No regulations have been issued by the agency.

Another instance involves "blowout preventers," which are critical devices meant to shut down out-of-control wells. In 1998, the MMS solicited suggestions to improve the effectiveness of the devices but didn't heed them. It commissioned Per Holand, a Norwegian researcher, to study the reliability of the devices. In 2002, Mr. Holand recommended that blowout preventers should have two pipe-cutting devices designed to shut off a well, instead of just one, in case one didn't work.

His reasoning: The pipe cutters are designed to shear off and plug an out-of-control well pipe. But they don't always work if they strike one of the thicker joints, where two pieces of pipe fit together. Joints like these make up about 10% of the length of the drill pipe, meaning the cutters could fail as much as 10% of the time. A second cutter, however, could ensure that at least one of the two would be able to cut the pipe.

The MMS didn't act on Mr. Holand's recommendation. Mr. Holand said he wasn't surprised: Adding a second cutter costs money, and might make the device too heavy for some older rigs to carry.

In 2000, the MMS issued a safety alert saying it expects oil companies to have a backup system to activate blowout preventers if the main activation system fails. A spokesman for MMS says it relied on industry assurances that backup systems were in place, but did no formal survey. Last June, nine years after the safety alert, the MMS issued an almost identical safety notice, but to date has issued no rule requiring the back-up switches.

"I don't recall where that rule-making process ceased," Mr. Herbst said. "It is something that we're going to go back and look at. I don't know yet whether that played into this incident, but I can guarantee we will be looking at that again."

Industry consultants say there are drilling rigs now in the gulf that don't have an automatic "dead man switch," or a separate, remote-control on-off switch to activate the blowout preventer, because the MMS hadn't issued the rule requiring their use.

The Deepwater Horizon did have a "dead man switch," but it failed to activate the blowout preventer. The Deepwater Horizon lacked the separate, remote-control switch that's commonly used in Norway and Brazil.

In a decision that gave the industry greater control over regulatory oversight, MMS got out of the business of telling companies what training was necessary for workers involved in keeping wells from gushing out of control. About a decade ago, the agency turned this over to a trade group, the International Association of Drilling Contractors, according to Lee Hunt, president of the Houston-based organization. It represents offshore drillers such as Transocean Ltd., which owned and operated the Deepwater Horizon.

"There was a recognition that everyone has a vested interest in being as safe as possible," Mr. Hunt said.

The trade group now accredits training schools to teach rig workers how to avoid blowouts, he says. When MMS inspectors visit rigs, Mr. Hunt said, they give "oral examinations" to workers on oil-well control.

The MMS has received unwelcome attention for the behavior of employees assigned to a royalty-collection office in Denver, Colo. The Interior Department's inspector general concluded in 2008 that MMS employees there broke government rules and created a "culture of ethical failure" by accepting gifts from, and having sex with, industry representatives. Following the inspector general's report, the Interior Department took disciplinary action against more than a half dozen MMS workers, with punishments that ranged from a warning letter to termination.

Ethical problems also hit the offshore oil program. In 2009, Donald C. Howard, the former regional supervisor of the Gulf of Mexico region for MMS, pled guilty and was sentenced to a year's probation in federal court in New Orleans for lying about receiving gifts from an offshore drilling contractor. Mr. Howard declined to comment.

The industry has fought against attempts to return to more rigid rules. In a 2009 letter, the Offshore Operators Committee and the American Petroleum Institute, two trade groups, argued against proposed new, stricter rules governing safety and environmental compliance.

Mandated programs, it said, "quickly become paperwork exercises," not genuine improvements. The rules haven't been implemented. Mr. Herbst said the rules would supplement, not replace, existing rules.

Challenges with the dome come as White House officials, U.S. lawmakers and others in the industry ask whether BP failed to foresee and prepare for a disaster of this scale, as doubts deepen over the company's ability to handle the spill.

Researcher Lisa Pfau tests for oil Sunday near Pass Christian, Miss.

BP assured regulators last year that oil would come ashore only in a small area of Louisiana, even in the event of a spill much larger than the current one. But as of Sunday evening, authorities reported that black, gooey balls were washing up on beaches in Alabama, farther than the company's original calculation.

BP spent Sunday trying to determine how to proceed with the huge metal-and-concrete containment dome, after it got clogged with crystallized gas 5,000 feet below the surface. The contraption was designed to sit over the leaking pipe and funnel as much as 85% of the oil to the surface, where it could be captured.

The four-story, 98-ton dome took the company two weeks to build and deploy—evidence, critics say, that the company didn't envision or prepare for the sort of blowout that occurred last month.

"The only thing that's clear is that there was a catastrophic failure of risk management," said Nansen Saleri, a Houston-based expert in oil-reservoir management and a former top official at Saudi Aramco, Saudi Arabia's state-owned oil company.

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BP defended its actions. "You have here an unprecedented event—never before have you seen a blowout at such depth and never before has a blowout preventer failed in this way," BP spokesman Andrew Gowers said. "The unthinkable has become thinkable, and the whole industry will be asking searching questions of itself."

The dome is now sitting on the seabed, about 600 feet away from the main leak. Doug Suttles, chief operating officer of BP's exploration and production division, denied the operation had failed and said the company was trying to figure out a way of providing heat at a depth of 5,000 feet to melt the crystals. BP had anticipated that the crystallized gas, called hydrates, could form in the pipe connecting the dome to the surface vessel, but not inside the dome itself.

BP also said it would try to deploy a smaller "top hat" dome that will form a tighter fit around the leak, hopefully preventing more water from entering the device and forming hydrates, Mr. Suttles said. The top hat will be lowered on Tuesday or Wednesday, he said.

BP and its partner on the project, Transocean Ltd., will face two Senate panels Tuesday on the April 20th explosion of the BP-leased Deepwater Horizon drilling rig that killed 11 workers. The rig sank two days later, setting off an oil leak that has since released around 85,000 barrels of oil into the Gulf.

The issue of BP's preparedness is sure to be a prime topic at the hearing, according to Senate staffers.

Interior Secretary Ken Salazar said that his "own preliminary observations" were that BP and its partners had made "some very major mistakes" leading up to and after the disaster.

Some in the oil industry questioned why it took the company so long to come up with the idea of a containment dome, and why it didn't have one ready to use.

"There should be technology that's pre-existing and ready to deploy at the drop of a hat," said one former Transocean executive. "It shouldn't have to be designed and fabricated now, from scratch."

BP is also struggling to secure sufficient amounts of booms, the floating strips used to keep oil offshore, and a large enough fleet of skimmer boats to keep the slick from spreading.

BP's general spill plan, which was updated last summer, shows that the company's claimed abilities were out of sync with the realities of the spill. Under the plan, BP said that the worst spill from a mobile drilling operation would come from a lease called the Mississippi Canyon 462, about 33 miles off the Louisiana coast. A blowout of that lease could discharge a mammoth 250,000 barrels a day, BP said, 50 times the estimated flow of the current leak. Yet BP claimed to have in place sufficient booms, stocks of dispersants and skimmers to deal with a spill far in excess of the volume it is now struggling to contain.

BP's plan, as submitted to the Mineral Management Service, placed exceedingly low probabilities on oil reaching land in the event of a major spill. Even in the case of the worst spill, BP said, there was only a 3% chance that oil would come ashore after a month in any part of the Gulf other than Plaquemines, La., which juts into the Gulf south of New Orleans.

Mr. Gowers defended BP's clean-up operation. "We moved very rapidly to implement the approved response to the accident," he said. "The evidence for that is the huge containment effort on the surface and onshore."

—Brian Baskin contributed to this article.

But a Wall Street Journal examination of Transocean's record paints a more equivocal picture.

Nearly three of every four incidents that triggered federal investigations into safety and other problems on deepwater drilling rigs in the Gulf of Mexico since 2008 have been on rigs operated by Transocean, according to an analysis of federal data. Transocean defended its safety record but didn't dispute the Journal's analysis.

In addition, an industry survey of oil companies that hired Transocean perceived a drop in its quality and performance, including safety by some measures, compared with its peers, though it still scored tops in one safety category.

Already the largest deep-water driller, Transocean in November 2007 took over rival GlobalSantaFe in an $18 billion deal.

A Journal analysis of records maintained by the U.S. Minerals Management Service found that Transocean's share of incidents in deep water investigated by the regulator has gone up since the merger, even after accounting for its increased size.

From 2005 through 2007, a Transocean rig was involved in 13 of the 39 deep-water drilling incidents investigated by the MMS in the Gulf of Mexico, or 33%. That's roughly in line with the percentage of deep-water rigs, 30%, Transocean owned and operated in the Gulf then, according to data firm RigLogix.

Since the merger, Transocean has accounted for 24 of the 33 incidents investigated by the MMS, or 73%, despite during that time owning fewer than half the Gulf of Mexico rigs operating in more than 3,000 feet of water.

Some of Transocean's clients have cited the merger as a reason they believe the company's performance has dropped.

Transocean says it is committed to safety and has a strong overall safety record. Larry McMahan, Transocean's vice president for performance, said the company investigates all incidents and adjusts its procedures accordingly. He said he believes the 2007 merger went smoothly.

"We are a learning company. We do not make the same mistakes again," Mr. McMahan said.

The April 20 explosion aboard the Deepwater Horizon killed 11 workers and has left thousands of barrels of oil a day pouring into the sea.

Besides Transocean's record, lawmakers and Gulf Coast residents have questioned those of BP PLC, which hired Transocean to drill the well, and the MMS, a federal agency that oversees the offshore drilling industry. Those questions are likely to grow if evidence emerges that Transocean had a pattern of problems.

There were few indications of any trouble with the Deepwater Horizon before the explosion. The rig won an award from the MMS for its 2008 safety record, and on the day of the disaster, BP and Transocean managers were on board to celebrate seven years without a lost-time accident.

Toby Odone, a BP spokesman, said rigs hired by BP have had better safety records than the industry average for six years running, according to MMS statistics that measure the number of citations per inspection.

BP has been a finalist for a national safety award from the MMS for the past two years. Mr. Odone wouldn't comment on BP's relationship with Transocean after the Gulf disaster but said BP continues to use Transocean rigs. The MMS declined to comment.

The cause of the April 20 explosion hasn't been determined. Investigators are expected to focus on two things: a cement seal meant to keep oil and gas from escaping from a well, and the blowout preventer, a set of valves on the ocean floor that is supposed to close off a well in an emergency.

Transocean has had problems with both, MMS records show.

In 2006, regulators found, a blowout preventer failed, in part because of maintenance issues. In 2005, a well leaked drilling fluid because of problems with the cement seal.

Transocean's Mr. McMahan said cementing issues are primarily the responsibility of an outside contractor hired by owner of the well. He said Transocean has a strong maintenance program to keep blowout preventers working.

Oil companies must inform the MMS of all offshore incidents such as injuries, fires and oil spills. The agency investigates those it deems serious and makes public its reports. Those are the incidents the Journal analyzed.

A decision to investigate an incident doesn't mean a company broke any laws. The MMS issued citations in only a quarter of the Transocean cases it investigated since the start of 2008, mostly for failure to follow safety procedures or for small oil spills.

The MMS says it issues fines only in limited circumstances, such as spills or when workers don't use required safety equipment. The agency can convene panels to conduct more detailed investigations into major incidents, but rarely does.

Some of the investigated incidents on Transocean's rigs have been minor, involving incidental injuries, dropped equipment and small leaks.

MMS investigators linked several Transocean incidents to workers' failure to follow company procedures. In a 2008 case, the Deepwater Horizon partially flooded and began to tilt after a worker removed a piece of pipe without telling those in overall charge of the vessel. Regulators didn't find any violations.

The MMS has investigated four fires aboard deep-water drilling rigs since 2005, all operated by Transocean.

Last September, for instance, a fire broke out on a brand-new Transocean rig, the Discoverer Clear Leader. It knocked out power to the thrusters that keep the rig in position above the well—a serious situation, because if a rig drifts too far it can disconnect from the well and cause a spill. Power was restored in time.

Transocean's Mr. McMahan said the company has trained firefighters aboard all rigs, and he didn't believe it has a problem with fires.

In 2006, Transocean's Discoverer Enterprise was drilling for BP in over 6,000 feet of water when a gauge suggested a leak from the blowout preventer. It took nearly an hour for a robot submarine to reach the valve and determine that it was leaking drilling fluid. The robot tried to shut down the well, but didn't have enough hydraulic fluid to add to the valve.

A second robot shut down the well about five hours after the problem arose. Investigators estimated 54 barrels of fluid spilled into the Gulf.

MMS investigators found that debris had gotten into the blowout preventer and reduced its effectiveness. The agency said the problem was caused in part by "extended use of [the blowout preventer] without inspection/maintenance."

Transocean said it couldn't comment on details of the incident. BP, the owner of the well being drilled, was cited by the MMS for failing to prevent a spill.

Most incidents reported to the MMS take place in shallow water, either on "jack-up" rigs that stand on the sea floor or on small, often unmanned platforms that produce oil and gas from the thousands of wells in the Gulf drilled in the offshore industry's 60-year history.

Transocean operates only a few rigs in shallow water. It specializes in a new frontier, drilling from huge floating rigs that are either anchored to the sea floor or kept in place with satellite-controlled thrusters.

This work is done for major oil producers such as BP, Chevron Corp. and Exxon Mobil Corp. Transocean was founded in Louisiana in 1926 as Danciger Oil & Refining Co., and was based in the U.S. until it relocated to Switzerland in 2008, partly for tax reasons.

BP is Transocean's biggest client in the Gulf of Mexico, hiring four of the 14 rigs the driller had there at the time of the fire. The Deepwater Horizon had worked on BP projects for years, and BP just last year extended its $500,000-a-day contract.

Oil companies typically review contractors' safety and environmental records before hiring them. Transocean's business could suffer if it develops a reputation for problems, said Arun Jayaram, an energy analyst with Credit Suisse in New York. "You just wonder if the incident makes it a little bit more challenging for Transocean," he said.

Transocean's Mr. McMahan said he didn't believe the incident would hurt the company's ability to find customers.

BP said last week it was asking all contractors to review their safety procedures and in particular to confirm that blowout preventers meet industry standards. Transocean is complying with the request, Mr. McMahan said.

Transocean Chief Executive Steven Newman told investors in a May 6 conference call that two rigs in India were offline in the quarter, in one case because of a problem with the blowout preventer. He said the company had "put in place a team specifically looking at the performance of the deep-water fleet" and to deal with equipment problems.

Transocean's 2009 safety record, as measured by injuries per hour worked, is better than the overall industry average.

Companywide, Transocean had 0.77 injuries per 200,000 man hours, vs. 0.81 for all offshore rigs world-wide, including those in both deep and shallow water, according to statistics compiled by the International Association of Drilling Contractors.

Still, its record was worse than those of some big deep-water competitors. Noble Corp. had 0.47 injuries per 200,000 hours, and Ensco PLC had 0.6.

Safety has improved for the industry as a whole, including at Transocean, whose injury rate has fallen 16% since 2007, according to securities filings.

Transocean's board was sufficiently concerned about safety that it eliminated all executive bonuses for 2009 after four workers died aboard rigs in separate incidents. In a securities filing 20 days before the Deepwater Horizon accident, Transocean said the move would "underscore the company's commitment to safety" and give executives incentives to prevent accidents. The company said Mr. Newman, who took over as CEO March 1, and other managers brought the proposal to the board.

Recent years have seen a rapid increase in deep-water drilling as companies push farther out in search of oil. The number of rigs able to drill in 3,000 or more feet of water is up 43% since 2006, to 146, according to research firm ODS-Petrodata. Sixty-five more are under construction.

Contractors have struggled to find enough experienced workers. Veteran crews are sometimes poached by new competitors, leaving rigs with less-experienced workers. "You've had trained personnel at a shortage, people stealing experienced crews," said Mike Smith, president of Bassoe Offshore, which advises companies on buying and selling offshore rigs. Mr. Smith said both BP and Transocean have strong safety records.

There are indications Transocean's reputation suffered after it acquired GlobalSantaFe in 2007. Before the merger, Transocean routinely ranked near the top in surveys by Energy Point Research, which rates oil-service firms on customer satisfaction. Since the merger, Transocean's rankings have fallen to close to the bottom in many categories.

In 2008 and 2009, the surveys ranked Transocean last among deep-water drillers for "job quality" and second to last in "overall satisfaction." For three years before the merger, Transocean was the leader or near the top in both measures.

Transocean ranked first in 2008 and 2009 in a category that gauges its in-house safety and environmental policies. In a category that measured perceived environmental and safety record, Transocean ranked in the middle of the pack in the polls.

In anonymous comments submitted with the surveys, some customers cited the merger as a problem. "The company is so large, they don't even know which assets and related equipment are available and when," an engineer with a major oil company wrote last September.

Other comments were positive. Transocean "is our rig contractor of choice," one said in 2008. A customer in 2009 called Transocean "the prototype of an offshore driller for the next several decades."

Mr. McMahan said that the merger had gone well but that, as with most mergers, the joined companies had to learn how to communicate and work together.

"It's a merger of two like companies with very similar cultures," Mr. McMahan said.

BP, the well owner, blames the failure of a big set of valves on the sea floor, known as the blowout preventer, to halt the blowout once it started.

A different account comes from Halliburton, a contractor in the drilling. This account is corroborated to some extent by Transocean, as well as by two workers on the drilling rig, The Wall Street Journal has determined.

This account describes a failure to place a cement plug within the well. The plug is designed to prevent gas from escaping up the pipe to the surface.

Before such a plug is placed, the job of keeping underground gas from coming up the pipe is done by heavy drilling fluid inside the well, commonly known as "mud."

The plug is normally put in before the mud is removed, but according to the account of Halliburton, Transocean and the two workers, in this case, that wasn't done—drilling mud was removed before a final cement plug was placed in the well.

It is not clear why such a decision would have been made. Rig owner Transocean says that BP, as owner of the well that was just being completed, made key decisions on how to proceed. BP declined to comment on this account of the drilling procedures.

Tim Probert, Halliburton's president of global business lines, plans to testify Tuesday that his company had finished an earlier step, cementing the casing, filling in the area between the pipe and the walls of the well; pressure tests showed the casing had been properly constructed, he will testify.

At this point it is common practice to pour wet cement down into the pipe. The wet cement, which is heavier than the drilling mud, sinks down through the drilling mud and then hardens into a plug thousands of feet down in the well.

The mud then is removed and displaced by seawater; the hardened cement plug holds back any underground gas.

In this case, a decision was made, shortly before the explosion, to perform the remaining tasks in reverse order, according to the expected Senate testimony of Mr. Probert, the Halliburton executive.

"We understand that the drilling contractor then proceeded to displace the riser with seawater prior to the planned placement of the final cement plug…," Mr. Probert says in the prepared testimony, which was reviewed by The Wall Street Journal.

The "riser" is part of the pipe running from the sea floor up to the drilling rig at the surface.

Lloyd Heinze, chairman of the petroleum engineering department at Texas Tech University, agrees that this is an unusual approach.

"Normally, you would not evacuate the riser until you were done with the last plug at the sea floor," he said in an interview.

A worker who was on the drilling rig said in an interview that Halliburton was getting ready to set a final cement plug at 8,000 feet below the rig when workers received other instructions. "Usually we set the cement plug at that point and let it set for six hours, then displace the well," said the worker, meaning take out the mud.

According to this worker, BP asked permission from the federal Minerals Management Service to displace the mud before the final plugging operation had begun.

The mud in the well weighed 14.3 pounds per gallon; it was displaced by seawater that weighed nearly 50% less. Like BP, the MMS declined to comment on this account.

As the heavy mud was taken out and replaced with much lighter seawater, "that's when the well came at us, basically," said the worker, who was involved in the cementing process.

The worker's account is corroborated by an email account sent by another person on the rig. He said that engineers wanted to flood the well with sea water before setting the final plug. As they were taking out the mud, the blowout began with a flood of drilling fluid being pushed out of the well, followed by a series of explosions.

Halliburton's Mr. Probert's prepared statement says: "Prior to the point in the well construction plan that the Halliburton personnel would have set the final cement plug, the catastrophic incident occurred. As a result, the final cement plug was never set."

Halliburton says it was following Transocean's orders and is "contractually bound to comply with the well owner's instructions on all matters relating to the performance of all work‐related activities."

Transocean Chief Executive Steven Newman is expected to tell the Senate the explosion occurred "after the well construction process was essentially finished."

His prepared testimony then blames the blowout on a failure of the well's lining, saying the blowout had to be caused by "a sudden, catastrophic failure of the cement, the casing or both."

When asked Monday night, Transocean agreed that the cement plug had not been placed in the well but that it had started the process of removing the mud, which it said was at BP's behest.

Such plugs are placed only temporarily. The idea is that the well owner can later reopen the well and begin producing oil from it.

The chairman of BP unit BP America Inc., Lamar McKay, is expected to testify that "we are looking at why the blowout preventer did not work because that was to be the fail-safe in case of an accident.…Transocean's blowout preventer failed to operate."

According to his prepared statement, reviewed by the Journal, he will say, "All of us urgently want to understand how this vital piece of equipment and its built-in redundancy systems failed and what measures are required to prevent this from every happening again."

Mr. Newman of Transocean says in his prepared testimony that it "simply makes no sense" to blame the blowout preventer. At the point that the blowout occurred, "the well barriers—the cementing and the casing—were responsible for controlling any pressure from the reservoir," his testimony says.

Two Senate panels, on Energy and Natural Resources and on Environment and Public Works, are to hear the testimony. In addition, the U.S. Coast Guard and the MMS are holding hearings Tuesday and Wednesday in Kenner, La.

BP's efforts to control the leaking oil haven't worked so far. As a result, reverberations from the disaster could affect BP's global ambitions to expand.

BP Chief Executive Tony Hayward said Monday that the global oil industry "has drilled over 5,000 wells in greater than 1,000 feet of water and has not hitherto had an issue of this sort to contend with."

The Minerals Management Service, a small division of Interior, now has dual roles, both to ensure the safety of oil drilling in federal waters and land, and to collect royalties from oil and gas companies.

Some government watchdogs have said that amounts to a conflict of interest, as employees must focus on keeping oil revenue flowing while also overseeing safety.

A Wall Street Journal article last week quoted former regulators and industry people as saying the MMS has shifted most of the job of crafting safety regulations to the oil industry itself.

The article found several instances of the agency identifying potential safety problems and then either not requiring follow-up or relying on the industry to draft a solution.

Now, the safety regulation function will be split from royalty collection.

Senators on Tuesday pressed for answers to what caused the explosion, taking testimony from executives of BP PLC, the owner of the well that blew out, as well as from rig owner Transocean Ltd. and contractor Halliburton Co. Each executive raised questions about the performance of other companies.

Kenner, La., was the scene of a separate hearing, held by the MMS and the Coast Guard, which also monitors the offshore industry. Questions emerged about disaster preparedness.

Coast Guard members testified that despite the spreading fire, there was no coordinated fire response.

Kevin Robb, a Coast Guard specialist in search and rescue, said the Guard was focused on that function, leaving fire-fighting entirely to about five private commercial vessels that responded to the scene.

That prompted Coast Guard Captain Hung Nguyen, co-chairman of the panel conducting the hearing, to suggest that the boats independently "throwing water onto a disabled vessel," with no central coordination, "could have had a role in sinking the vessel."

Maritime experts say that too much water can essentially cause a rig to overflow and sink; therefore, it's important to coordinate.

At the Senate hearing, Halliburton executive Tim Probert testified that his company hadn't placed a final cement plug within the well when the blowout occurred. Such plugs, designed to keep gas from escaping up the pipe, are normally put in before heavy drilling fluid known as "mud" is removed, some industry experts say.

In this case, mud was removed before a final plug was placed, Mr. Probert testified, in a scenario outlined in Tuesday's Journal.

Mr. Probert said Halliburton was contractually bound to comply with the well owner's instructions on such matters.

When senators asked a BP executive, Lamar McKay, about that matter, he said he wasn't "familiar with the procedure on that particular well."

A rig worker cited Tuesday in the Journal said permission had been sought from the MMS to do the procedures in the unusual order, withdrawing mud before placing the final cement plug.

Interior Secretary Ken Salazar declined to comment on whether the MMS, part of his department, had given such permission.

BP's Mr. McKay focused attention on the failure of the blowout preventer, a heavy stack of valves that sits on the sea floor and is supposed to avert a blowout. It is the responsibility of the rig owner, Transocean.

That company's president, Steven Newman, told senators the device didn't cause the explosion, and added that the "root cause" of the accident was "a sudden catastrophic failure of the cement, the casing or both."

At the hearing in Louisiana, an MMS official, Jason Mathews, said the agency requires prospective drillers to submit proof their blowout preventers have the capability to sever and seal an oil pipe in an emergency.

But a local MMS drilling engineer, Frank Patton, testified that he wasn't aware of such a requirement. Mr. Patton, who approved BP's drilling permit, said he didn't require proof from oil companies that their blowout preventers have enough power to do the job. "I have never been told to look for" a statement that the preventer is adequate, Mr. Patton said.

Interior Secretary Salazar said he has asked the National Academy of Engineering to conduct a probe of the Gulf disaster, which took 11 lives and is causing a large oil spill.

There are proposals in Congress for an independent commission similar to one that looked into the space shuttle Challenger's explosion.

The Louisiana inquiry also heard from Alwin Landry, the captain of the Damon B. Bankston, a 260-foot vessel that traveled with the Deepwater Horizon drilling rig.

He testified that at about 9 p.m. the night of the blowout, he heard a "high pressure release of air or gas" coming from the rig. Mud flew out of the derrick and came down on the Bankston like a "black rain," he said. At about 9:53 p.m., he said, came a green flash, and an explosion followed by a "Mayday" call from the rig's radio.

Another disaster, another regulatory bungle. The vast oil slick gushing from the wreck of the Deepwater Horizon offshore drilling rig has brought back into the headlines our old friends at the bumbling Minerals Management Service, a bureau of the Department of the Interior.

Last time we checked in on the MMS, it was the bureau's royalty-collecting program that was doing its best to make a sick joke of the possibility of good government. This was the federal organization charged with collecting revenue from oil companies that drill on public land; instead, you will recall, the program's staffers were apparently trying to give new meaning to the old Washington saying about being "in bed with industry."

It was a different branch of the MMS that was charged with oversight of the nation's offshore oil drillers, but apparently the same chummy relationship with industry prevailed. Last Friday, The Wall Street Journal catalogued the various ways in which the bureau had deferred to oil drillers in safety matters, following a philosophy the newspaper called "industry self-regulation." Among many other things, this meant taking industry's word that it had installed certain safety systems and leaving guidelines for worker training up to industry groups.

It only takes a few minutes of Internet drilling to locate the inevitable revolving door. The current president of the National Ocean Industries Association, a trade group for offshore oil drillers whose website describes its "mission" as securing "a favorable regulatory and economic environment" is—surprise—a former director of the Minerals Management Service. The man he replaced at the helm of the oil drillers group was also a former director of the MMS.

How many times must we hear this stomach-turning story?

We heard it after the banking regulators sat cluelessly through the financial crisis. We heard a version of it about the Securities and Exchange Commission, with its "voluntary supervision" program for investment bank holding companies. We heard a slightly different iteration about the Office of Thrift Supervision, whose director once referred to the CEO of Washington Mutual as "my largest constituent assetwise."

A few years back, the same narrative described what was going on at the Department of the Interior, which had become lobbyist Jack Abramoff's playground. And what had happened at the Food and Drug Administration, which had virtually been transformed into an arm of Big Pharma. And at OSHA. And at the Federal Aviation Administration.

Always the account followed the same pattern: Self-regulation. Voluntary oversight. Regulators who regard industry as their client, their customer, their constituent. Regulators who take jobs as lobbyists. Lobbyists who take jobs as regulators. Prosecutions brought down almost to zero. Good times for everyone.

And, at the end of the story: colossal scams, tainted food, environmental catastrophe, economic disaster.

It would be nice if we could blame all this on Republican administrations and be done with it. But it isn't so simple. Goldman Sachs, to name one protagonist in a recent version of the story, has always had prominent friends in both parties. It was the Clinton administration, with its scheme to "reinvent government," that made consensus wisdom out of the idea that markets should be the model for the state; it was the big thinkers of Democratic centrism who shunned adversarial regulatory strategies in favor of a more "entrepreneurial" approach.

The phenomenon I am describing is familiar to the point of nausea. The economists have a technical term for it, "regulatory capture." Our Gilded Age ancestors were fairly obsessed with it.

But today's consensus commentators, steeped as they are in the orthodoxy of markets, tend to regard the notion of regulatory capture as a conspiracy theory.

And so failure after regulatory failure leads not to the obvious insight that self-regulation never works, but instead to that hoary old truism of the backlash: Government never works. The only thing to do is to grab a nine iron and smash it up even more.

The Obama administration, for its part, seems to believe it can solve the problem by rearranging the flowchart. Yesterday it announced plans to split the MMS into two separate agencies. Much more than that is in order. If the administration wants to vindicate government, it must begin by acknowledging that a certain philosophy of governance has failed.

The president's task is to name and shame that form of governance, and to do it in such a conspicuous and convincing and memorable way that it changes forever how we think about Washington. If he does it well, future presidents just might hesitate before they install, say, another investment banker at the Treasury Department or another coal lobbyist at the Interior Department.

If the administration continues to ignore the larger problem, we have nothing to look forward to but failure and fury, all the way to the oily horizon.

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