Abstract

http://ssrn.com/abstract=1685606
 


 



Regulatory Blowout: How Regulatory Failures Made the BP Disaster Possible, and How the System Can Be Fixed to Avoid a Recurrence


Alyson Flournoy


University of Florida

William L. Andreen


University of Alabama - School of Law

Rebecca M. Bratspies


City University of New York - School of Law

Holly Doremus


University of California, Berkeley - School of Law

Victor Byers Flatt


University of North Carolina (UNC) at Chapel Hill - School of Law ; University of Houston Global Energy Management Institute

Robert L. Glicksman


George Washington University - Law School

Joel A. Mintz


Nova Southeastern University

Dan Rohlf


Lewis & Clark College

Amy Sinden


Temple University - James E. Beasley School of Law

Rena I. Steinzor


University of Maryland Francis King Carey School of Law; Center for Progressive Reform

Joseph P. Tomain


University of Cincinnati - College of Law

Sandra B. Zellmer


University of Nebraska at Lincoln - College of Law

James Goodwin


Center for Progressive Reform


U of Maryland Legal Studies Research Paper No. 2010-49
UC Berkeley Public Law Research Paper No. 1685606

Abstract:     
The BP oil spill in the Gulf of Mexico is destined to take its place as one of the greatest environmental disasters in the history of the United States, or for that matter, of the entire planet. Like so many other disasters on that list, it was entirely preventable.

BP must shoulder its share of the blame, of course. Similarly, the Minerals Management Service (MMS) – since reorganized and rebranded – has come under much deserved criticism for its failure to rein in BP’s avaricious approach to drilling even where it was unable to respond to a worst-case scenario in a responsible and timely fashion. But the problems run much deeper than a single risk-taking company and a single dysfunctional regulatory agency.

This report sketches out widespread regulatory failure, touching several agencies of the federal government and affecting several critical environmental statutes. Prepared by Member Scholars of the Center for Progressive Reform (CPR), it has two goals: (1) to identify how and why the regulatory system failed to protect the public and environment and prevent the BP disaster, and (2) to recommend the priority reforms that are essential to correct these regulatory deficiencies.

The report begins by laying out the shortcomings in the primary statute under which deepwater oil drilling is regulated – the Outer Continental Shelf Lands Act (OCSLA) – and outlines key reforms needed to provide the authority necessary to protect the public interest.

It then turns to systemic problems within the agency charged with regulation of deepwater oil drilling under the OCSLA – the Mineral Management Service (MMS), renamed the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) in the wake of the disaster. These include problems of agency capture and inadequate funding.

The third topic addressed in the report is the role of the National Environmental Policy Act (NEPA) – how and why this landmark statute was disabled from performing its critical role in the case of the BP well, and what regulatory changes can ensure that it functions effectively in the future.

The report next details the problems that surrounded the implementation and enforcement of the Endangered Species Act (ESA) as it applied to oil drilling and recommends several key reforms.

The report then discusses a systemic problem that is a theme in each prior section and that specific statutory reforms cannot fully remedy: obstacles to making sound regulatory decisions in the face of uncertain, low probability risks of potentially catastrophic or irreversible harm. This section highlights a common sense solution: adoption of a precautionary stance. A precautionary approach would replace the current widely-adopted presumption that regulation must await a high – and often unattainable – degree of certainty, even when the potential costs are irreversible or catastrophic.

In the last sections of the report, we step back to look at the regulatory system from a broader perspective. We consider first how the regulatory system and its failures in this case were caused in part by the absence of coherent policies on energy and climate change. Our current policy provides vast incentives for risky oil and gas development like deepwater drilling and few for low-carbon alternative energy sources. In the wake of yet another painful lesson on the cost of our current incoherent approach, it is time to focus political attention on the difficult but necessary task of debating and adopting a coherent and sound energy policy.

In the final section, we step back geographically to suggest why another lesson of this disaster is that the United States should undertake to learn more from the experience abroad, offering the example of the North Sea. Had we been paying closer attention, the investigations and reforms in the wake of the infamous Piper Alpha spill or the Bravo platform blowout might have offered insights to help us avoid this disaster.

Number of Pages in PDF File: 70

Keywords: BP Oil Spill, Regulatory Policy, Natural Resources, Public Safety, OCSLA, NEPA, ESA, Precautionary Principle, Energy Policy

JEL Classification: K32

working papers series





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Date posted: October 2, 2010 ; Last revised: October 6, 2010

Suggested Citation

Flournoy, Alyson and Andreen, William L. and Bratspies, Rebecca M. and Doremus, Holly and Flatt, Victor Byers and Glicksman, Robert L. and Mintz, Joel A. and Rohlf, Dan and Sinden, Amy and Steinzor, Rena I. and Tomain, Joseph P. and Zellmer, Sandra B. and Goodwin, James, Regulatory Blowout: How Regulatory Failures Made the BP Disaster Possible, and How the System Can Be Fixed to Avoid a Recurrence. U of Maryland Legal Studies Research Paper No. 2010-49; UC Berkeley Public Law Research Paper No. 1685606. Available at SSRN: http://ssrn.com/abstract=1685606 or http://dx.doi.org/10.2139/ssrn.1685606

Contact Information

Alyson Flournoy
University of Florida ( email )
Gainesville, FL 32610-0496
United States
William L. Andreen
University of Alabama - School of Law ( email )
P.O. Box 870382
Tuscaloosa, AL 35487
United States
Rebecca M. Bratspies
City University of New York - School of Law ( email )
2 Court Square
Long Island City, NY 11101
United States
Holly Doremus
University of California, Berkeley - School of Law ( email )
790 Simon Hall
Berkeley, CA 94720-7200
United States
510-643-5699 (Phone)
Victor Byers Flatt
University of North Carolina (UNC) at Chapel Hill - School of Law ( email )
Van Hecke-Wettach Hall, 160 Ridge Road
CB #3380
Chapel Hill, NC 27599-3380
United States
HOME PAGE: http://www.law.unc.edu/faculty/directory/details.aspx?cid=1022

University of Houston Global Energy Management Institute ( email )
Houston, TX 77204-6021
United States
Robert L. Glicksman
George Washington University - Law School ( email )
2000 H Street, N.W.
Washington, DC 20052
United States
202-994-4641 (Phone)
HOME PAGE: http://www.law.gwu.edu/Faculty/profile.aspx?id=16085
Joel A. Mintz
Nova Southeastern University ( email )
Ft. Lauderdale, FL 33314
United States
Dan Rohlf
Lewis & Clark College ( email )
0615 SW Palatine Hill Road
Portland, OR 97204
United States
Amy Sinden
Temple University - James E. Beasley School of Law ( email )
1719 N. Broad Street
Philadelphia, PA 19122
United States
215-204-4969 (Phone)
215-204-1185 (Fax)
Rena I. Steinzor
University of Maryland Francis King Carey School of Law ( email )
500 West Baltimore Street
Baltimore, MD 21201-1786
United States
Center for Progressive Reform ( email )
500 West Baltimore Street
Baltimore, MD 21201
United States
Joseph P. Tomain
University of Cincinnati - College of Law ( email )
P.O. Box 210040
Cincinnati, OH 45221-0040
United States
513-556-6805 (Phone)
513-556-6265 (Fax)

Sandra B. Zellmer
University of Nebraska at Lincoln - College of Law ( email )
103 McCollum Hall
P.O. Box 830902
Lincoln, NE 68583-0902
United States
James Goodwin (Contact Author)
Center for Progressive Reform ( email )
500 West Baltimore Street
Baltimore, MD 21201
United States
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