Later On

A blog written for those whose interests more or less match mine.

How the US "regulates" the oil industry

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John Cole of Balloon Juice:

I know Mistermix has touched on this already, but it is nice to see this splashed on the front page of the NYT:

Federal regulators warned offshore rig operators more than a decade ago that they needed to install backup systems to control the giant undersea valves known as blowout preventers, used to cut off the flow of oil from a well in an emergency.

The warnings were repeated in 2004 and 2009. Yet the Minerals Management Service, the Interior Department agency charged both with regulating the oil industry and with collecting royalties from it, never took steps to comprehensively address the issue, relying instead on industry assurances that they were on top of the problem, a review of documents shows.

In the intervening years, numerous blowout preventers and their control systems have failed, though none as catastrophically as those on the well the Deepwater Horizon drilling rig was preparing when it blew up on April 20 — an accident that has left tens of thousands of gallons of oil a day spewing into the Gulf of Mexico.

Agency records show that from 2001 to 2007, there were 1,443 serious drilling accidents in offshore operations, leading to 41 deaths, 302 injuries and 356 oil spills. Yet the federal agency continues to allow the oil industry largely to police itself, saying that the best technical experts work for industry, not for the government.

Critics say that, then and now, the minerals service has been crippled by this dependence on industry and by a climate of regulatory indulgence.

“Everything that’s done by the oil industry is done for profit,” said Senator Bill Nelson, Democrat of Florida, who demanded this week that the Interior Department investigate these backup safety systems. “Throw in the fact that regulators have taken a lax attitude toward overseeing their operations, and you have a recipe for catastrophe.”

It really is kind of amazing how successful industry has been at gutting almost every aspect of regulation in this nation. Not only was there no effective regulation of the oil industry, if regulators were simply allowing the oil industry to regulate themselves, there was no regulation at all, because that is what “regulating themselves” means. It means looking the other way. I’d sure like it if cops would let me regulate my own speed on the highway.

And adding insult to injury, we’re paying the regulators to not regulate.

Written by Leisureguy

7 May 2010 at 10:13 am

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