Throwing Precaution to the Wind: NEPA and the Deepwater Horizon Blowout

Abstract:     
On April 20, 2010, BP’s Deepwater Horizon oil platform blew up. Eleven workers were killed in the explosion. When the platform sank to the bottom of the Gulf of Mexico two days later, oil erupted out of the riser - a 5,000-foot pipe connecting the platform to the well on the ocean floor. After a number of failed attempts to stop the leak, BP eventually capped the well in July, three months after the explosion. Nearly 5,000,000 barrels of oil were released into the Gulf, making the Deepwater Horizon the largest offshore oil spill in world history.

In this paper, we uncover some of the regulatory failures that led to the disaster. We focus on the National Environmental Policy Act of 1969 (NEPA), and describe how the government’s failure to take NEPA seriously reveals significant flaws in the oil and gas program as a whole. The precautionary nature of NEPA’s “look before you leap” mandate was completely undercut by the failure to prepare a “worst case analysis,” by the abuse of categorical exclusions, and by over-reliance on flawed assumptions provided by the industry. We assess how these shortcomings resulted in disaster, and suggests reforms to ensure that all potential risks of harm are identified and analyzed in a rigorous, accurate, and unbiased manner before a project like the Deepwater Horizon goes forward.

Number of Pages in PDF File: 14

Keywords: NEPA, Worst Case Analysis, Precautionary Principle, Oil Leasing, Categorical Exclusion

JEL Classification: K23, K32

Accepted Paper Series