An in depth article in the New York Times titled, “Lapses Found in Oversight of Failsafe Device on Oil Rig,” covers at length the problems surrounding the technology and methods employed to prevent the disaster that we see every day on our television screens, newspapers, and the Internet. It also points to the nearly complete lack of oversight and enforcement by the federal government to protect us. Politicians like to write legislation and put flowery titles on the same and gather for the cameras for signing ceremonies, but when it comes to the heavy lifting of enforcing the laws put in place they often fall down on the job.
When disaster strikes the typical Washington reaction is to add more regulations that eventually become so complex and contradictory that compliance becomes nearly impossible (e.g., Internal Revenue Code). In the case of the oil spill in the Gulf the article points out that studies were conducted in 2003, seven years ago, on failure points to prevent the situation we are living with today, but no requirements to put them in place or test them were instituted.
The article focuses on a device called a blind shear, whose purpose is, in the event of an accident like what happened on the Deepwater Horizon, to activate a pair of shear blades to cut the pipe that rises from the well and seal the well shut. The reliability of single blind shears has only proved to be about 46%. With this empirical data, new wells are installing two such devices for redundancy and backup. Such a recommendation was made to the Materials Management Service (the government agency regulating drilling) in 2001, nine years ago, but the MMS took no actions on the recommendation. In 2003, the MMS received a recommendation that would require the necessary underwater robots and testing of emergency backup systems, but again the MMS, demurred. The practice has been that the MMS simply took the drilling industries word that they were taking steps to prevent problems.
In 2003, the Deepwater Horizon rig has a problem in a storm that caused the rig to break away from the well it was drilling, the blind shear worked perfectly in that case giving the company a false sense of confidence in the technology. What happened next is revealing:
The following year, BP opted to remove a layer of redundancy from the blowout preventer. It asked Transocean to replace one of the blowout preventer’s secondary rams with a “test ram” — a device that would save BP money by reducing the time it took to conduct certain well tests. In a joint letter, BP and Transocean executives confirmed that BP was aware that the change “will reduce the built-in redundancy” and raise Transocean’s “risk profile.” – New York Times, 20 June 2010, pA1
Since the MMS did not require two blowout preventers, BP was in the clear to remove one. Also, consider the term “risk profile,” and think of this in terms of a free market where insurance companies played a role. If you increased the risk profile and didn’t want to have your policy canceled in its entirety for hiding that fact, the insurance company would no doubt increase BP premiums for the increased “risk profile.” Since this effort was a cost saving measure, having to pay more in insurance might have changed the equation such that BP would leave things as they were with two blowout preventers. But the government encouraged deep water drilling, the government put a cap on the amount of damages that a drilling company would have to pay that created a moral hazard, the government ignored recommendations to required greater safety measures and the government was lax in enforcing those regulations it had in place, instead relying on taking the industry’s word that all was well.
On a separate issue regarding the cleanup, in an article in the Wall Street Journal titled, “The President Does a Jones Act,” it states that in the two weeks following the disaster, thirteen countries contacted our government offering assistance with the clean up. Our government turned the offers down. As the State Department put it:
“While there is no need right now that the U.S. cannot meet, the U.S. Coast Guard is assessing these offers of assistance to see if there will be something which we will need in the near future.” One month later, many of these offers are still outstanding. – Wall Street Journal, 19 June 2010
The Belgians reportedly have the ships and technology that could clean up the mess in the Gulf in one-third the time than is currently estimated. All it requires is suspending the Jones Act of 1920. Bush did it almost immediately in the wake of Hurricane Katrina so that foreign ships could come in and provide temporary housing for the hurricane victims. Officials in the Obama Administration weakly respond that “no one has asked them yet,” to suspend the Jones Act. What are they waiting for? Doesn’t Obama and everyone in his administration to hit the Sunday talk shows tell us that they has been on top of this since day one? One plausible reason for the hesitation is that it might offend the maritime unions.
We are continually told by this administration that we need more government expertise telling us how to run our lives. Surrender your liberties, we’ll take care of you. I don’t think so. What do you think?
