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Morning Bell: Did the Federal Government Enable the Gulf Oil Spill?

Posted By Conn Carroll On May 17, 2010 @ 9:53 am In Ongoing Priorities | Comments Disabled

An “angry” [1] President Barack Obama lashed out at those he feels are responsible for the Gulf oil spill Friday, telling [2] reporters in the Rose Garden: “You had executives of BP and Transocean and Halliburton falling over each other to point the finger of blame at somebody else. I will not tolerate any more finger-pointing or irresponsibility.” But as CBS News [1]‘ Chip Reid points out: “Mr. Obama’s been president for nearly 16 months. Does he get at least a little piece of the blame?” Pointing to President Obama’s staunch defense of Interior Secretary Ken Salazar, Reid answered his own question: “Not a bit. … He portrayed his administration as valiantly fighting the good fight against the oil companies from day one. …So while the president is pointing the finger of blame, he’s also working hard to make sure that over time the finger doesn’t do a 180.”

In the President’s mind the federal government apparently can do no wrong. The leading answer to every problem our nation faces is bigger, stronger, and more intrusive government regulations. But a closer look at the facts surrounding the spill shows that it was an already overly oppressive regulatory legal framework, coupled with lax enforcement, that created the mismatched incentives that led to the disaster.

The federal government is the owner of the waters where drilling takes place and bears ultimate responsibility for what happens on its property. Energy companies seeking to develop our natural resources must survive a phalanx of federal regulations before any action can be taken. For starters, any action taken by the federal government, including offshore drilling leases, requires a detailed environmental impact analysis mandated by the National Environmental Policy Act (NEPA) [3]. But NEPA is such a draconian law, and the process can be so slow thanks to litigation, that to get anything done the federal government often grants waivers to the NEPA process. Which is exactly what happened with the Deepwater Horizon oil rig in question.

Regulations also require the Interior Department to inspect rigs at regular intervals, and the Deepwater rig was supposedly inspected less than two weeks prior to the accident. [4] The rig’s emergency shutoff valve, which reportedly had a dead battery [5], also passed inspection just 10 days before it failed [6]. In addition to these intrusively written but leniently enforced regulations, the Oil Pollution Act (OPA) of 1990 set a $75 million liability cap [7] beyond direct cleanup costs for any offshore oil spill. The net result of all of all these policies is a situation where nobody is responsible for safety because everybody is.

The answer to the Gulf oil spill is not a new ban on domestic energy production or more intrusive regulations. The best way to make sure future spills do not happen is make energy companies responsible for safety but to then also hold them fully responsible for any accidents [8]. Combining liability with a responsibility for safety maintenance should minimize the likelihood of accidents by directly connecting profit motives to safe operations. It is also high time the entire NEPA process was reformed. NEPA’s pervasive application makes it highly burdensome and difficult to follow, which drives the need for waivers. As waivers become the norm, they become easier to attain even when, perhaps, they should be denied.

If the Obama administration insists on micromanaging every aspect of energy production then it should also be prepared to have the finger pointed at itself when things go wrong.

Quick Hits:

  • Days after Attorney General Eric Holder admitted he had not even read Arizona’s new immigration law, Assistant Secretary of State Michael Posner apologized to China [9] for the law during human rights talks.
  • According to the IMF, the U.S. national debt will reach 100% of GDP [10] by 2015.
  • Based on tax collection reports [11] from more than a dozen states, the recession may have taken a heavier-than-expected toll on employment last year.
  • A new Rasmussen Reports [12] survey finds that 51% of voters nationwide believe the United States is the last best hope of mankind.
  • The new health care law [13] will pack 32 million newly insured people into emergency rooms already crammed beyond capacity, according to experts on healthcare facilities.

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/05/17/morning-bell-did-the-federal-government-enable-the-gulf-oil-spill/

URLs in this post:

[1] “angry”: http://www.cbsnews.com/8301-503544_162-20005039-503544.html

[2] telling: http://www.nytimes.com/2010/05/15/us/politics/15obama.html

[3] National Environmental Policy Act (NEPA): http://www.epa.gov/compliance/nepa/

[4] inspected less than two weeks prior to the accident.: http://www.whitehouse.gov/the-press-office/press-briefing-bp-oil-spill-gulf-coast

[5] had a dead battery: http://seattletimes.nwsource.com/html/nationworld/2011851148_oill13.html

[6] passed inspection just 10 days before it failed: http://www.washingtonpost.com/wp-dyn/content/article/2010/04/30/AR2010043001044_pf.html

[7] Oil Pollution Act (OPA) of 1990 set a $75 million liability cap: http://www.heritage.org/Research/Reports/2010/05/Gulf-Oil-Spill-Washingtons-Response-Should-Not-Preclude-Future-Exploration

[8] The best way to make sure future spills do not happen is make energy companies responsible for safety but to then also hold them fully responsible for any accidents: http://www.heritage.org/Research/Reports/2010/05/Gulf-Coast-Oil-Spill-Does-the-Federal-Government-Share-Responsibility

[9] apologized to China: http://news.yahoo.com/s/ap/20100515/ap_on_go_ca_st_pe/us_us_china_human_rights

[10] U.S. national debt will reach 100% of GDP: http://thehill.com/blogs/blog-briefing-room/news/98045-imf-us-debt-approaching-100-of-gdp

[11] tax collection reports: http://online.wsj.com/article/SB10001424052748704247904575240663734802790.html?mod=WSJ_hpp_MIDDLTopStories

[12] Rasmussen Reports: http://www.rasmussenreports.com/public_content/politics/general_politics/may_2010/51_say_united_states_is_last_best_hope_of_mankind

[13] new health care law: http://thehill.com/business-a-lobbying/98025-health-reform-threatens-to-overwhelm-already-crammed-emergency-rooms

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