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The BP Oil Spill and the Disappearing Louisiana Coast

Cross-posted from Legal Planet.

In his book Bayou Farewell, Mike Tidwell tells some haunting stories about the rapid disappearance of the Louisiana coast from his time with Cajun fisherman.  Here’s one story:

“We all pile into the crab boat and Tim tells his son to head down the bayou. A few hundred feet away . . . Tim points toward a watery stretch of march grass oddly littered with bricks and concrete.

“’It’s a cemetery,’ he says.

“There, shockingly, along the grassy bayou bank, I can now make out a dozen or so old tombs, all in different stages of submersion, tumbling brick by brick into the bayou water. . . The bayou is swallowing the dead here.”

The fact is that even before the BP Oil Spill, the Gulf Coast and the Gulf of Mexico itself were under siege from damage to wetlands, a poorly regulated oil and gas industry, rising seas, an immense marine “dead zone,” invasive species, and damaged ecosystems.  As a result, the fishing communities along the coast were already under siege, along with their unique histories and cultures.  The BP Spill was just one more impact to this damaged ecosystem.

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Missing the Lessons of the BP Spill

The report of the President’s Gulf Oil Spill Commission answered some questions and raised others. But one thing still puzzles: Why didn’t the Gulf Oil Spill start a national conversation about our dependence on oil development and the need for renewable energy?

At first, it appeared it might, but the focus quickly turned to reforming the regulatory agency with oversight for the spill and fixing the technical failures that caused the well blowout in the first place. Both were important areas of inquiry, but the focus on oversight failures and technological quick fixes allowed us to avoid more fundamental questions that had to do with our failure to make the investments necessary to create a future grounded in renewable energy.

We know from history that a larger policy conversation might well have been triggered. In the mid-1970s, Love Canal triggered such a national reexamination, and indeed the name remains a household term today, emblematic of a transformative moment in environmental law and in the nation’s attitude toward chemicals and waste.

So think about the scale of Love Canal versus the scale of the BP oil spill. Love Canal involved 36 square blocks, 21,000 tons of toxic waste, and a few hundred homes. It’s not clear whether any deaths were specifically caused by the toxic waste, although it’s certainly likely that some illnesses or deaths were, and that similar waste dumping elsewhere took lives.

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Deepwater Horizon Spill Commission Waivers on Self-Regulation, Endorses Wrong-Headed British 'Safety Cases' System

Despite its strong condemnation of the industry-wide problems that caused last year’s BP Oil Spill, the report today from the President’s commission waivered on a crucial subject: it significantly embraced the essentially self-regulatory British "Safety Case" model of regulation that industry and its consultants have been promoting. So while the commission has done some terrific work, one of its key recommendations is very disturbing.  The safety case approach ultimately leaves to the oil companies, rather than regulators, the difficult but crucial work of making sure another rig does not explode. We can do better, if Congress gives the regulators adequate funding, moves them to an agency like the EPA or OSHA whose mission is to crack down on bad actors, and gives them the authority they need to make the oil industry internalize the American people’s expectation that it operate safely.

A number of industry advocates promoted the British model; members of the Deepwater Horizon Study Group (an ad hoc group of academics headquartered at the University of California/Berkeley) suggested the concept in a letter to the Commission; and the Department of the Interior has been reportedly considering it. Given the popularity of self-regulation for the oil industry in a number of countries, it is extremely unfortunate that the Commission missed the opportunity to set a higher standard for America. Instead, it said safety cases should be part of a future regulatory system. It wrote (p. 252-253):

Government agencies that regulate offshore activity should reorient their regulatory approaches to integrate more sophisticated risk assessment and risk management practices into their oversight of energy developers operating offshore. They should shift their focus from prescriptive regulations covering only the operator to a foundation of augmented prescriptive regulations, including those relating to well design and integrity, supplemented by a proactive, risk-based performance approach that is specific to individual facilities, operations, and environments. This would be similar to the “safety case” approach that is used in the North Sea, which requires the operator and drilling rig owners to assess the risks associated with a specific operation, develop a coordinated plan to manage those risks, integrate all involved contractors in a safety management system, and take responsibility for developing and managing the risk management process.

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Darrell Issa Struggling to Get his Anti-Regulatory Message Straight

Representative Darrell Issa, the incoming chair of the House Oversight and Government Reform Committee, has made his views on regulations fairly clear. Earlier this week, for example, he scored headlines when his office gave out a document publicizing the issues his committee will take up. From the document: "The committee will examine how overregulation has hurt job creation..."

No surprise; that's about the line we'd expect from Issa.

But someone in Issa's office must have recognized a problem: Won't the investigations not quite have the same credibility or punch if the investigator himself has already announced his conclusion?

Perhaps that’s why Rep. Issa's spokesman, Kurt Bardella, took a different tack this same week, telling Politico: "Is there a pattern emerging? Is there a consistent practice or regulation that hurts jobs? Until you have all the facts, you really can't make a lot of determinations and judgments."

Note the use of question marks instead of conclusions. Quite a step back. But he better tell his boss, who’s already on the record with his determinations and judgments.

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False Choices: Senator Warner's Plan to Adopt a Regulation, Drop a Regulation

A particularly revealing story in The Washington Post this weekend reported on a sordid tale of regulatory failure that may have helped contribute to this spring and summer’s outbreak of outbreak of egg-borne salmonella that sickened more than 1,900 people and led to the largest recall of eggs in U.S. history. In an agonizing case of closing the chicken coop door after the tainted eggs had escaped, FDA finally adopted a long-delayed regulation in July – two months after the outbreak – that might have helped prevent it. And this month Congress may give FDA new authority to regulate the safety of food in light of the salmonella case and other highly publicized outbreaks of food poisoning in the last few years.

Yet, under a proposal floated in an op-ed by Sen. Mark Warner (D-VA) in the same newspaper two days later, regulators would be forced to drop existing regulations in order to pass needed new regulations. So, for example, FDA might have to drop a regulation covering peanuts in order to promulgate additional regulations for eggs. 

Senator Warner’s proposal would require federal agencies to identify and eliminate an existing regulation of similar estimated economic cost for each new regulation they want to add. The Chamber of Commerce touts it as an "interesting proposal" but it's not actually a new one. In fact, I testified before the Senate Committee on Government Operations in opposition to the "regulatory budget" idea in 1999, and the proposal dates back to at least the 1980s (see the American Enterprise Institute's Chris DeMuth, writing in 1980). Nothing that has occurred since makes this into a good idea. As we unfortunately know, it was a lack of regulation, not too much regulation, that was responsible for the collapse of the financial sector, the event that precipitated the economic recession from which we now suffer. And it has been too little regulation and enforcement that has led to the almost yearly outbreaks of food poisoning that have killed many and injured thousands more. See also: the West Virginia mine collapse, the BP oil spill, and runaway Toyotas.

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Obama’s Path Forward: Impart a Sense of Urgency to Regulatory Agencies Protecting Health, Safety and the Environment

There’s a lot of punditry left to be committed about whether and how the GOP majority in the House and the enhanced GOP minority in the Senate will work with the Obama Administration. I’m not optimistic. But even if the President and House Republicans are able to find some small patch of common ground, the hard reality that progressives need to swallow is that whatever major progressive legislation will bear Barack Obama’s signature has already become law, at least for his first term.

The same is not true, however, for what Barack Obama might accomplish simply by infusing the health and safety  agencies in his Administration—from EPA to OSHA to FDA—with a sense of urgency, clearing away barriers to regulatory progress within his own White House, and insisting that the agencies enforce existing laws with newfound vigor. A string of catastrophes have shown that we need proactive government at least as much in these areas as we need cops on the beat in neighborhoods and airport security, even as Americans claim to hate government in a larger sense.

Resurrection of these agencies was a low priority for the President during his first two years. He made great appointments, but then left the agencies to cope with budget shortfalls and inadequate legal authority. As just one especially shocking example, FDA cannot order a recall of salmonella-poisoned food but instead must depend on the producer’s cooperation to get the food off the shelves. Worst of all, Cass Sunstein, his appointee to the post of “regulatory czar,” where he essentially supervises the agencies from the White House, has in many ways continued the Bush II pattern of red tape and neglect. “Yes we can” became “No we won’t” in too many instances. His small office continues to serve as a lobby for any powerful business interest—from coal companies to chemical manufacturers—intent on consigning the cops to desk duty.  

Republicans followed the pattern of the Bush II Administration, screaming about overregulation and even going so far as to protest the rough treatment of British Petroleum in the Gulf. As usual, they gained traction by ranting against government writ large, not by acknowledging the need—no, the expectation and rock-solid demand—that these first-line responders keep Americans safe.

The predictable result was a mixed record--some regulators seized the opportunity and moved briskly ahead. Others bogged down.  

All of that is squarely within the President’s power to fix. But will he?

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The Oil Spill Commission, the White House, and the Next Election

Whatever happens at the polls this November, President Obama will get a chance to turn the electoral tide in 2012, perhaps without the loadstone of recession around his political neck.  And, while the economy and many other issues will continue to occupy the President for the best and most obvious of reasons, it’s fair for everyone in the country to expect him to multi-task. For progressives who care about the environment, I’d suggest one critical criterion for judging the Administration: Can the President and his senior appointees stop running from the bogus claims that they stand for big, bloated, ineffective government and instead explain to the American people why government makes a vital difference to our daily lives?

Just last week we got another distressing, preliminary answer to this crucial question when the Administration stiffly dismissed the preliminary findings of staff at the bipartisan National  Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. The staff working papers provide discouraging insights into White House efforts to micro-manage the frantic efforts of a phalanx of agencies, while trying to get a grip on a catastrophe incubated by Bush II. 

According to the staff report, it turns out that for the first several weeks, Coast Guard Admirals Thad Allen and Mary Landry systematically underestimated the amount of oil pouring from the broken well by more than 1,000 percent (5,000 as opposed to 60,000 barrels flowing each day). By taking an “overly casual approach” to these figures, the staff write, “the federal government created the impression that it was either not fully competent to handle the spill or not fully candid with the American people about the scope of the problem.”

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CRE's Proposed Interactive Public Dockets—Tilting the Regulatory Process Further in Industry's Favor

Back in the 1970s, when many of the great environmental, health, and safety statutes were adopted, public interest groups shared an overwhelming optimism that greater public participation held the key to maintaining—and even expanding upon—their successes. All they needed was a seat at the  table where decisions are made, and their ideas would ultimately prevail. At first, they were right—public interest groups were able to advance their cause through participation in the regulatory process. But before long, regulated industry discovered that they could beat public interest groups at their own game by using their superior resources. The number of “public input” tables grew, and each increasingly became filled with more and more industry groups, while the seats for public interest groups often go empty.  If the public interest groups are able to be present, they are often drowned out.

Once a dream, public participation in the regulatory process has too often become a nightmare for public interest groups. A number of different studies of the regulatory system confirm the extent to which regulated industry is dominating participation in the regulatory process, including for rules aimed at environmental, health, and safety issues. A 2006 study of 40 rules promulgated by four agencies (the Occupational Safety and Health Administration, the Employment Standards Administration, the Federal Railroad Administration, and the Federal Highway Administration) issued between 1994 and 2001 found that of the total number of comments, business interest filed 57 percent, governmental interests filed 19 percent, and non-business, nongovernmental interests submitted 22 percent. Public interest group comments constituted only six percent of the total comments submitted by non-business, nongovernmental interests.  Another study, by Marissa Martino Golden, examined comments filed on eleven proposed regulations at three agencies (the Environmental Protection Agency, the National Highway Traffic Safety Administration, and the Department of Housing and Urban Development) and found that corporations, public utilities, and trade associations filed between 66.7 and 100 percent of the comments concerning these rules, and neither the EPA nor the NHTSA received any comments from public interest groups concerning five of the eight rules.

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New CPR Study Chronicles Series of Regulatory Failures that Produced BP Oil Spill

A new CPR white paper today argues that the BP oil spill and its attendant environmental and economic harm were entirely preventable, and indeed, would have been avoided had government regulators over the years been pushed and empowered by determined leadership and given sufficient resources to enforce the law.

The paper, Regulatory Blowout: How Regulatory Failures Made the BP Disaster Possible, and How the System Can Be Fixed to Avoid a Recurrence (press release), examines the performance of multiple regulatory agencies, most conspicuously, the Minerals Management Service (MMS), since reorganized and rebranded as the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).

Among the recommendations:

  • Congress should amend the OCSLA to overhaul environmental review procedures, require inter-agency consultation, extend deadlines for review, increase penalties, and create incentives for continual safety innovation.
  • The President should request, and Congress should provide, adequate funding for BOEMRE so that it can perform its regulatory functions and hire, train, and retain competent staff. In addition, the reorganization that led to the creation of BOEMRE should be built upon with further organizational reforms, including further separating several of the new agency’s existing programs into separate shops.
  • The CEQ should reinstate the regulatory requirement for worst-case analysis planning.
  • With respect to the ESA, the Services should revise their regulations to ensure better assessment of low probability risks of harm to listed species, and to account for the aggregate impacts of low probability risks of serious harm.
  • Congress should ensure that BOEMRE undertakes an ongoing, systematic evaluation of the lessons learned elsewhere in the wake of serious accidents off the shores of other nations, and of alternative regulatory measures and techniques that have proven effective in those settings. 

The report also focuses on the general importance of using the precautionary principle in decisions over risk, rather than essentially dismissing catastrophic outcomes as too unlikely to warrant serious consideration.

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Sen. Landrieu's Counterproductive Hold on the Lew Nomination

Senator Mary Landrieu (D-La.) currently has a hold on Jacob Lew’s confirmation to become the next director of the Office of Management and Budget, and says she won't release it until the Obama Administration ends the moratorium on deepwater oil and gas drilling. She said that while Lew “clearly possesses the expertise necessary to serve…he lacks sufficient concern for the host of economic challenges confronting the Gulf Coast.”

Sen. Landrieu seems to be ignoring the impacts of too hastily allowing oil companies to engage in risky drilling operations – something that came sharply into focus when BP’s Deepwater Horizon oil rig exploded, killing 11 rig workers and spilling an estimated two hundred million gallons of oil into the Gulf.  But the impacts of too quickly rushing back into the same inadequate regulatory oversight that contributed to this oil spill don’t seem to factor into Sen. Landrieu’s calculus.  People living on the Gulf Coast are faced with the consequences of the spill’s aftermath – and effects such as stress and depression don’t easily translate into quantifiable dollars and cents.

Sen. Landrieu said Tuesday that "This moratorium is doing almost as much damage and I think more damage than the spill itself." But the predictions of widespread job losses haven't panned out.

The Obama administration wants the hold ended.  After meeting with Interior Secretary Ken Salazar, Landrieu said she is still firm in her position. In addition to lifting the moratorium on deepwater drilling, Sen. Landrieu would also like to see an acceleration of permits for shallow water drilling in the Gulf.

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