2 Responses to St. Petersburg Times slams BP and Big Oil: “It’s becoming increasingly evident that self-regulation has not worked.”
After oil disasters, there is outrage, then delay
You would think the change would have been almost automatic after such a disaster. But the oil industry was so powerful that Congress gave it until 2015 “” 25 years “” to comply. Even now, single-hulled oil tankers like the Exxon Valdez, which now operates as an ore carrier in Asia, can ply U.S. waters.
That was just one example of how the industry’s influence has slowed or stopped regulations that might have cut into profits.
The St. Petersburg Times is publishing a damning piece Sunday on Big Oil’s success in lobbying for voluntary, “trust us,” self-regulation. It’s the same point John Podesta and I made earlier this week in our Politico op-ed (see “Limited government can, and often does, lead to unlimited pollution and unlimited disasters“) — but they have a lot more detail.
The whole piece, “After oil disasters, there is outrage, then delay,” deserves to be widely read:
Environmentalist Richard Charter remembers watching the landmark 1990 Oil Pollution Act get watered down right before the vote. It made him skeptical that there will be stricter government oversight of the oil industry resulting this time around.
“There will be a lot of chest-beating in Washington and teeth-gnashing in Houston,” said Charter, senior policy adviser for Defenders of Wildlife. “Something will be sold to the American people as a solution so they can say ‘never again.’ And it will be in place until it does happen again.”
Until the cause of the April 20 explosion and fire on the Deepwater Horizon is known, it’s uncertain whether stricter federal oversight of offshore drilling would have made a difference.
But in the wake of the accident, which left 11 dead and more than 200,000 gallons of oil spewing into the gulf each day, it’s becoming increasingly evident that self-regulation has not worked.
- Earlier this decade, the oil industry successfully lobbied against efforts that would have required oil platforms to have remote control shut-off devices as back-up systems in case of spills. The systems, which cost about $500,000, are widely used on rigs in Norway and Brazil.
- When the federal agency charged with supervising offshore oil and gas production proposed stricter oversight of safety procedures last year, citing 1,443 incidents and 41 deaths over eight years, the industry said the new rules were too confusing. The agency backed down even though its safety data showed “no discernible trend of improvement by industry.”
- When BP, which was leasing the Deepwater Horizon rig, assured regulators last year that an oil spill at the site was “unlikely” and any impact on marine life would be “sublethal,” the Interior Department’s Minerals Management Service gave it a waiver on an environmental impact study, one of up to 400 waivers the agency issues each year in the gulf. In 2004, MMS had performed its own analysis of the impact of a leak from the site. Among its conclusions: less than half a percent chance any oil would reach Florida’s coast.
Last week, the Interior Department established its first-ever board to examine safety procedures for offshore drilling. “It will take a broad look at questions this incident raises about policies and safety,” said department spokesman Matt Lee-Ashley. “This is a heavily regulated industry and it should be.”
Meanwhile an executive with the oil industry’s trade association denied that lax regulation had anything to do with the gulf disaster.
“There’s actually been a pretty strict regime in place,” said Erik Milito, director of upstream and industry operations with the American Petroleum Institute. “There have been in excess of 30,000 Gulf of Mexico wells drilled in the last 40 years and there hasn’t been a major spill, so I’d say the safety rates were good. This was a freak accident.”
Milito noted that the owner of the Deepwater Horizon, Transocean, received a government safety award last year and the rig itself had been inspected by regulators and found in compliance three times since January.
But critics say the fact that a rig could pass federal inspection one month and collapse in a fiery explosion the next goes to the heart of the problem: While regulators check valves and gauges, a more comprehensive approach is missing.
In the early 1990s, a National Academy of Science report found that the oil industry focused on passing inspections but did not address the chief cause of accidents, human error. It wasn’t until 2005 that MMS implemented a safety program that addressed this issue, but even then it was written by the industry and voluntary. The effort to strengthen this program failed in the face of industry opposition last fall.
Mike Sawyer, an oil industry safety engineer, said MMS’s safety regulations represent only minimum standards.
“What is baffling to me is that long-term safety programs will protect a company’s profits,” he said. “If you’re rushing to production and cutting maintenance costs, you’re sure to capture short-term profits. But that can have catastrophic consequences.”
Sawyer declined to speculate on the Deepwater Horizon incident, but he is intimately familiar with safety issues at Atlantis, another BP deepwater drilling platform in the gulf. Over a year ago, a whistle blower alerted both BP and federal regulators that the Atlantis did not have mandatory operating documents that would be critical in an emergency.
Sawyer, owner of Apex Safety Consultants in Houston, volunteered to review the case for Food and Water Watch, a Washington, D.C., nonprofit. He concluded that production should be shut down on Atlantis until the design discrepancies are resolved. Sawyer said he agreed with an internal BP assessment he saw which said the discrepancies could lead to “catastrophic operator error.” In March, MMS said its investigation into the Atlantis, which is still in production, is continuing.
“When you talk about closing down production, you begin to get a CEO’s attention very quickly,” Sawyer said. “Government fines are designed to get a company’s attention; however, they are generally ineffective because most of the time you’re only talking about a few hours or days of profit on one facility to cover the cost.”
People who have watched the revolving door between the Interior Department and the oil industry say it should come as no surprise that regulators are reluctant to take a strong stand. Gale Norton, Interior Secretary under President George W. Bush, became Shell’s general counsel. Randall Luthi, most recent director of MMS, is now president of the National Ocean Industries Association, whose mission is to secure a “favorable regulatory and economic environment for the companies that develop the nation’s valuable offshore energy resources.” And in 2008, a scathing report by the Interior Department’s inspector general uncovered a “culture of substance abuse and promiscuity” at the MMS office in Denver involving staff and oil company employees.
Though new administrators now head both Interior and MMS, Jeff Ruch, executive director of Public Employees for Environmental Responsibility, said change is illusory at best.
“There’s been a memo that says you can’t date oil lobbyists, but there are also new restrictions on what the staff can say to the press or even other agencies,” said Ruch, whose group represents agency whistle blowers. “It’s transparency with an opaque overcoat.”
What worries him the most, however, is the Interior Department and Obama administration’s emphasis on energy independence rather than resource protection.
“The environment has been treated as a handmaiden to the energy policy,” Ruch said. “But this incident in the gulf has been such an unmitigated disaster, I hope some basic assumptions will be challenged.”
Don’t bet on it, said Defenders of Wildlife’s Charter. There will be Congressional hearings and multiple investigations into the Deepwater Horizon incident. Politicians may back off, at least temporarily, on plans for expanding drilling in the gulf.
But last year the oil and gas industry had 780 lobbyists who spent nearly $170 million, according to the Center for Responsive Politics. In the 2008 campaign, Barack Obama, then the Democratic candidate, received $884,000 from the industry. His Republican opponent, Sen. John McCain, received even more.
“The industry gives money or withholds money,” Charter said. “There will not be any more change than the oil industry is willing to allow.”
Unless, that is, enough people say, I’m mad as hell and I’m not going to take it anymore — including, of course, the President of the United States.
- Is BP the Goldman Sachs of Big Oil? CEO Hayward says to fellow executives: “What the hell did we do to deserve this?” Let’s see: How about a spotty safety record, insistence on voluntary ‘trust me’ self-regulation, a drilling plan that ignored key risks, and failure to use best shut-off technology to save a few bucks?