The regulatory response

May 17, 2010
You're seated at a restaurant table when your waiter accidentally stumbles and spills lasagna onto your favorite jacket.

You're seated at a restaurant table when your waiter accidentally stumbles and spills lasagna onto your favorite jacket. How do you respond?

If you're human, your first impulse probably is rage. If you're emotionally developed, you probably suppress the anger in order to attend to the immediate requirements of clean-up. Later, hopefully still holding anger in check, you'll work with the restaurant manager to assess damage to the jacket. If the manager has a proper sense of responsibility, he or she will clean or replace the garment and seek ways to prevent recurrence of the accident.

Do you demand that the manager fire a waiter who made a mistake? Do you want the restaurant to quit serving lasagna or start making the dish without tomato sauce? Answers depend on your maturity and sense of realism.

Model for response

A tragic oil spill in the Gulf of Mexico is massively different from spilled food, of course. The consequences are much more sweeping, much more serious. But responses to the imaginary lasagna spill offer a possibly useful model for responses to a regrettably real oil spill.

To the Deepwater Horizon semisubmersible's fatal explosion and horrible aftermath, a regulatory response is inevitable and appropriate. Everyone can imagine a recurrence of the disaster. Regulation and industry practice must shrink the risk.

The first step, to determine precisely what happened, is under way in legal depositions and congressional hearings. Possibilities fall into three categories: personnel error, mechanical failure, or manifestation of an unanticipated hazard.

Underlying the first two categories are two possible causes: negligence and complacency. To imminent regulation, the distinction is very important.

Negligence in a drilling operation is inexcusable. It's also improbable, especially when the drilling occurs far at sea in deep water. People who work in that environment understand better than anyone else the risks of what they do. Those risks are personal and potentially fatal. While recognition of risk can't eliminate mistakes, it nevertheless provides a powerful deterrent against carelessness. Self-preservation is more compelling than any regulation ever can be.

Complacency is another matter. Before the Deepwater Horizon accident, the offshore producing industry had a solid safety record. Yes, blowouts and spills occurred. But they were infrequent in relation to total activity and usually did little damage. Maybe time without a harsh reminder of what can happen dulled, in some places, the careful edge essential in hazardous work. If so, a painful new reminder is at hand. Regulation can help keep it ever in mind.

Assessments of what happened on the Macondo well will focus on people and equipment. But they should not ignore the possibility of a heretofore unknown peril lurking in the extreme dynamics of deep water. Maybe everyone and everything on the Deepwater Horizon worked correctly, and the accident occurred anyway. If so, the industry and its regulators need to learn more than they know now about deepwater operating conditions. And deepwater operations under way now need to proceed with greatly enhanced caution if they proceed at all.

Responses of Congress and regulators must navigate quickly but carefully through considerations such as these. Anger over an accidental and massive mess will be a strong undercurrent. The urge to inflict punishment and extract revenge will be strong. Amplifying the pressure will be the oil and gas industry's chronic and unfortunate unpopularity.

Context of need

Even worse, but maybe constructively in the long run, regulation will proceed in the context of America's ineluctable requirements for oil and gas. Much of the public has been tricked into construing this need as addiction rather than the economic reality that it is. Too much of it angrily repels any suggestion that America can't will itself away from hydrocarbon energy as long as hydrocarbons retain their overwhelming superiority of scale and cost.

The regulatory response to the gulf spill must not pretend otherwise. Suppressing anger, it must seek ways to respond to a real need, a need as potent as a taste for lasagna and far more important, while helping a vital industry address inescapable hazards.

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