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Obama Says System 'Failed Badly' in Oil Spill, Calls Hearings 'Ridiculous Spectacle'

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President Barack Obama walks out to deliver remarks in the Rose Garden following his closed meeting with his Cabinet and other senior administration officials on the ongoing effort to stop the BP oil spill, Friday, May 14, 2010. (AP)

A clearly frustrated President Obama on Friday said that the system for preventing accidents like the April 20 oil spill in the Gulf of Mexico "failed badly," while calling the "blame game" among oil executives at Senate hearings this week "a ridiculous spectacle."

Earlier this week, executives of BP, Transoceans and Halliburton blamed each other for the widening environmental catastrophe at back-to-back Senate hearings. 

"I did not appreciate what I considered to be a ridiculous spectacle during the congressional hearings into this matter," Obama said in brief remarks from the Rose Garden. "The American people could not have been impressed with that display and I certainly wasn't. ... But it is pretty clear that the system failed, and it failed badly. And for that, there's enough responsibility to go around." 

Obama vowed to halt the "cozy relationship" between oil companies and federal regulators, as he called for new permitting rules and procedures governing offshore oil drilling.

Obama said he has ordered Interior Secretary Ken Salazar to do a "top-to-bottom" reform of the Minerals and Management Service, the agency now under fire for allowing oil drilling in the Gulf of Mexico without requiring oil companies to provide necessary permits from a separate agency. 

"For too long, a decade or more, there's been a cozy relationship between the oil companies and the federal agencies that permits them to drill," he said. "Seems as if permits were too often issued based on a little more than assurances of safety from the oil companies."

"That cannot and will not happen anymore," he said, adding that the government "will trust, but we will verify."

Salazar has called for a plan to split the agency in two. One agency would be charged with inspecting oil rigs, investigating oil companies and enforcing safety regulations, while the other would oversee leases for drilling and collection of billions of dollars in royalties. 

That would separate the agency's two core responsibilities, which critics say are diametrically opposed — making money off the industry, while also cracking down on it in ways that may affect the industry's bottom line.

Environmental groups have criticized the agency for giving the Deepwater Horizon a "categorical exclusion" from a environmental impact study of the operation or a serious assessment of its inherent risks. That exemption was granted 11 days before the underwater exploratory rig exploded. The agency, which is part of the Interior Department, has also given a light regulatory touch to other offshore projects.

Obama also said  that no one knows exactly how much oil is leaking because human inspectors cannot reach the mile-deep well head.

He said he would not rest until the leak is stopped, the oil is contained and cleaned up, and people of the Gulf region resume normal lives.

Fox News' Major Garrett contributed to this report.