Conflict of Interest that Led to the Gulf Oil Disaster

9 Pages Posted: 20 Jan 2011 Last revised: 28 Apr 2013

Peter Jan Honigsberg

University of San Francisco - School of Law

Date Written: January 19, 2011

Abstract

On April 20, 2010, British Petroleum’s Deepwater Horizon drilling rig in the Gulf of Mexico exploded, killing eleven people and spilling billions of gallons of oil into the gulf. In the days and weeks that followed, the media pointed to the Minerals Management Services (MMS), the regulatory agency responsible for managing offshore drilling, as being complicit with BP. The MMS issued permits for deepwater drilling in violation of its regulations; provided hundreds of exemptions to the regulations; maintained lax monitoring and enforcement procedures; allowed the companies to draft regulations that suited their interests and objectives; and engaged in inappropriate relationships with the oil and gas industry.

This brief essay of 2,500 words describes how the origin of the oil disaster can be traced, in significant part, to the MMS and its close relationship with the industry it had been charged with regulating. The roots of the disaster date back to the early years of the Reagan Administration when, in 1982, controversial Interior Secretary James Watt restructured the agencies responsible for revenue collection and regulatory oversight of the oil and gas industry, merging the responsibilities of two agencies into one. Even if we ascribe the best intentions to President Ronald Reagan and James Watt, the conflict of interest they created in 1982 directly led to the BP Oil Disaster nearly thirty years later. The only question left open after they restructured the agencies in 1982 was when would the disaster strike?

Keywords: British Petroleum, BP, Gulf of Mexico, Gulf oil spill, Gulf oil disaster, Minerals Management Agency, MMS, Deepwater Horizon, Administrative agency, Administrative Law, Conflict of Interest, captive agency, regulation, regulatory oversight, revenue collection, oil and gas, deepwater drilling, enviro

Suggested Citation

Honigsberg, Peter Jan, Conflict of Interest that Led to the Gulf Oil Disaster (January 19, 2011). Environmental Law Reporter News & Analysis, Vol. 41, No. 10414, 2011; Univ. of San Francisco Law Research Paper No. 2011-03. Available at SSRN: https://ssrn.com/abstract=1743768

Peter Jan Honigsberg (Contact Author)

University of San Francisco - School of Law ( email )

2130 Fulton Street
San Francisco, CA 94117
United States
415-422-6478 (Phone)
415-422-6433 (Fax)

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