Government Oversight Committee Demands Economic Considerations for Gulf Safety Regs

It is misguided at best and counter to any reasonable concept of independently established regulatory protection to factor economic considerations into the formula for safety regulations.
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The Committee on Government Oversight and Responsibility released its report The BP Oil Spill Recovery Effort: The Legacy of Choices Made by the Obama Administration on the BP blowout last week and it is strongly positioned as a broad attack on the Obama administration's response to the BP oil spill. In public hearings the committee was split along party lines with Republican members voicing their support for industry and attacking the administration and the Natural Resources Defense Council (NRDC) for new safety regulations on exploratory drilling in the Gulf. Chairman Darrell Issa labeled the NRDC a "radical" organization for using litigation and the courts combined with Congressional action to enforce existing regulations and enact additional environmental safeguards. Bureau of Ocean Energy Director Michael Bromwich was clearly astounded by these statements, which illustrate that the true radicals are the members of Congress who side with industry and far from being conservative Republicans, are willing to compromise our nation's greatest resources for short-term profits at the expense of the public trust. Bromwich was also incredulous under questioning when asked if MMS/BOE had taken economic impacts into account when drafting safety regulations and imposing a temporary moratorium on exploratory drilling in the Gulf. Economic considerations have no bearing whatsoever in determining safety regulations and minimum standards of acceptable behavior in pursuing oil reserves. Republican committee members, through ignorance or willful misrepresentations of facts, repeatedly stated that the moratorium affected gasoline prices on the domestic and world markets. The fact that production in the Gulf was never even slowed down, much less halted, during the BP disaster and furthermore that the amount of oil produced in the Gulf is near irrelevant in factoring global pricing levels continues to be denied by some Republican committee members.

For example the report states:

In the aftermath of the explosion aboard the Deepwater Horizon, Department of Interior Secretary Ken Salazar twice ordered a six month moratorium on deepwater drilling in U.S. waters. The Secretary's orders effectively banned much of the economic activity that sustains the Gulf states, particularly Louisiana.

This is absolutely not true. Production in the Gulf was unaffected and the economic devastation the region experienced had little to do with the drilling moratorium; it was caused by the BP spill and the resultant loss of seafood stocks, poisoned beaches and lost revenue from tourism, sickness from exposure to toxic chemicals in crude and dispersant. Conversely, the cleanup efforts and compensation by BP to victims did provide some measure of economic support to the region (until Kenneth Feinberg and GCCF took over and payments stopped).

The report goes on to state:

Moreover, the Department of Interior executed this sweeping decision without making any effort to consult with safety experts on the wisdom of imposing an outright ban on all drilling activity in the Gulf, and without conducting a thorough economic analysis of the impact a moratorium would have on the local or national economy prior to making the decision.

The industry proposal that economic considerations should be considered when drafting safety regulations has been an elusive goal. Given the threat from disasters ensuing from accidents in extractive industries whether it be oil or coal, it is misguided at best and counter to any reasonable concept of independently established regulatory protection to factor economic considerations into the formula.

The report could have been drafted by virtually any oil company working on the Gulf Coast, and their influence is obvious. It represents a one-sided industry supported wish list of deregulation and concessions which, if implemented, would undoubtedly lead to even more loss-of-control situations with deepwater rigs and subsequent devastation to the economic vitality, health, welfare, and environment of the Gulf Coast.

Moreover, Director Bromwich was aware that the moratorium would
disproportionately harm small operators. An internal memorandum circulated at DOI on June
21, 2010, states, "Smaller companies and those drill rigs that cannot find work in shallow water
or conducting allowed activities in deepwater or be transported across open oceans may face
losses that are insurmountable. These companies may no longer be open after the moratorium

The key question not raised by the committee is; What if the Deepwater disaster had been the result of a smaller companies operations and not a giant mulitnational like BP? Were that the case, it would be left to the federal government to clean up the mess and the American taxpayer to foot the bill. If a small business can not afford to comply with safety regulations, they should not be allowed to drill at all. As is clear from the report, the Republican majority on the committee are willing to roll the dice with certain knowledge that disaster is likely, in order to appease their supporters in the petroleum industry. They are perfectly willing to place on the altar of sacrifice everything of lasting value, the very air we breath, our water and our very lives, for short-term profits.

The report is critical of the Obama administration's decision to allow BP to dictate the response and cleanup of the spill, and rightly so -- this one decision has caused tremendous damage to the Gulf Coast, and the administration continues to work aggressively with BP to portray the situation as normal and the spill cleaned up. Nothing could be further from the truth. As the map below shows (provided by a public official in Alabama) by permitting the use of the Corexit dispersants the oil was sunk and now resides on the sea floor labeled as "technologically unrecoverable" or "mechanically unrecoverable." The dispersant has not degraded as promised but rather worked as a preservative so that thousand of pounds of fresh toxic tarballs and slabs of crude continue to wash ashore daily.

New Orleans native and leading environmental attorney Stuart H. Smith after reviewing the report commented;

BP has come up short on everything from fairly compensating victims to failing to fund the removal of cleanup-equipment debris to dragging its feet on providing mental health services for those people who need it. That's reprehensible behavior, but what makes matters even worse is that our federal government has abdicated its responsibility to intervene on behalf of spill victims. That's unforgivable in my mind.

While focusing on economic impacts that are largely exaggerated the report ignores important questions related to the BP oil spill. What plans and technologies are available in the event of a hurricane during a significant oil spill event? How will the federal government fund cleanup operations if a smaller or medium-sized company bears responsibility for a loss-of-control spill in deepwater? What is the final disposition in terms of dispersant use after the disastrous consequences of large scale use in the Gulf? What will be done in future responses to ensure adequate protection from health threats to both cleanup workers and the general population?

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