Lessons From The Gulf

From The American Enterprise Institute:

Lessons from the Gulf By Kenneth P. Green

The European

Monday, June 28, 2010











Although the oil is still gushing into the Gulf of Mexico, adding to what is already the largest oil spill in American history, and investigations into the explosion are far from over, there are some preliminary conclusions that we can draw from the uman and ecological disaster that commenced with the explosion of the Deepwater Horizon.



First, the Deepwater Horizon disaster actually had at least two "fathers." One of them, clearly, was BP, which has a terrible track record when it comes to safety, and seems to have a general culture of recklessness and deceit: prior to the blowout, the United States Occupational Safety and Health Administration had logged 760 "egregious" or "willful" violations of safety laws by BP. Yet while BP was operating less environmentally than other oil companies, the company spent uncounted millions of dollars green-washing itself, adopting a pretty green logo, re-branding itself as "Beyond Petroleum."



Beside the scandals and mismanagement, however, lies a fundamental problem at the heart of the MMS missionBut BP wasn't acting alone: the second "father" of the disaster was the Minerals Management Service (MMS) of the United States Department of Interior. The MMS has been plagued by a long track record of scandalous behavior and mismanagement. Scandals involving alcohol, drugs, sex, and excessive intimacy with people in the oil business were relayed to Congress in 2008, by the inspector general of the Interior Department himself. Beside the scandals and mismanagement, however, lies a fundamental problem at the heart of the MMS mission: On the one hand, MMS is responsible for leasing offshore areas for minerals production (which includes oil and gas), and bringing in revenue for the federal government: According to a 2004 report, lease revenues are the second largest source of federal revenues after taxes. On the other hand, the MMS was tasked with evaluating, approving and monitoring environmental, health, and safety plans of those applying for leases.



Both BP and the U.S. federal government share responsibility for the disaster that is now afflicting coastal and oceanic ecosystems in the Gulf of Mexico. While BP should ultimately pay for the damages and punish anyone found negligent in the disaster, action must also be taken to by the U.S. government to reform the leasing process, to separate safety permitting and oversight from leasing activities, and to increase the ability of the Coast Guard and Navy to prevent oil from reaching American shores.



Kenneth P. Green is a resident scholar at AEI.