Let's consider the author's main point about oil drilling, it will help us establish context for the phrase in question. Instead of simply responding to disasters after they occur, she believes that a more proactive approach to research should be taken in order to prevent such disasters.
"Regulations currently govern the kinds of casing and cement that can be used in these practices; however, the hazards of insufficient knowledge persist."
Which hazard is the author referring to? We should be able to identify it within the passage. The author has not mentioned poor testing anywhere in the passage, which is how we are able to eliminate C. I suppose that the barriers set in place to protect the groundwater could be considered "new technologies." Their long-term stability may be uncertain, but we cannot say this is a result of poor testing.
The word "rudimentary" in answer choice E seems too strong. Is the author suggesting that we have a rudimentary understanding of metal and cement? I don't think so. Rather, she is saying that other factors like bacteria, traffic vibrations, and groundwater chemistry may come into play. This is where we are more likely to have a rudimentary understanding, but not in the materials themselves.
B is the correct answer, because we can point out the specific example on line 55. There was a serious lack of geographical research before this project was built. It resulted in a catastrophic spill, which is a perfect example of the "hazards of insufficient knowledge."