Our guest blogger is Andy Rowell, with Oil Change International.
We know that BP was to blame for the Deepwater Horizon oil catastrophe. So too were Transocean and Halliburton. So too was the failed regulatory regime, which was tasked with maximizing revenues for drilling at the same time it was responsible for oversight of the operations. You can’t do both, and that is the reason that former regulator, the Minerals Management Service, has been changed into the Bureau of Ocean Energy Management, Regulation and Enforcement — which has no responsibility for revenue collection.
But the industry lobby group, the American Petroleum Institute (API), is as “compromised” as the MMS was, according to the official Oil Spill Commission, whose report was published yesterday. As well as being a lobby group pushing to promote offshore drilling, API also runs technical committees that write safety standards for the offshore industry:
Based on this Commission’s multiple meetings and discussions with leading members of the oil and gas industry, however, it is clear that API’s ability to serve as a reliable standard-setter for drilling safety is compromised by its role as the industry’s principal lobbyist and public policy advocate. Because they would make oil and gas industry operations potentially more costly, API regularly resists agency rulemakings that government regulators believe would make those operations safer, and API favors rulemaking that promotes industry autonomy from government oversight.
While drafting industry standards and safety rules, API also spends tens of millions of dollars a year on political lobbying, advertisements, and Astroturf campaigns on behalf of the oil industry. Due to this compromised role, the API’s safety standards were flawed and therefore regulatory standards were flawed too:
According to statements made by industry officials to the Commission, API’s proffered safety and technical standards were a major casualty of this conflicted role. As described by one representative, API-proposed safety standards have increasingly failed to reflect “best industry practices” and have instead expressed the “lowest common denominator”—in other words, a standard that almost all operators could readily achieve. Because the Interior Department has in turn relied on API in developing its own regulatory safety standards, API’s shortfalls have undermined the entire federal regulatory system. As described in Chapter 4, the inadequacies of the resulting federal standards are evident in the decisions that led to the Macondo well blowout.
For years, the API led industry efforts into preventing further regulatory reform, asking the regulators to instead to rely on self-regulation by the API. The Oil Spill Commission’s report argues that, historically, the oil industry served as “an initial impediment” to the reforms being proposed by the MMS in the early nineties “and has largely remained so.”