The End Game of Deregulation: Myopic Risk Management and the Next Catastrophe

Abstract

On December 22, 2008, the contents of an enormous impoundment containing coal-ash slurry from the Tennessee Valley Authority’s (TVA) Kingston Fossil Fuel Plant poured into the Emory River. The proximate cause of the spill was the bursting of a poorly reinforced dike holding back a pit of sludge that towered 80 feet above the river and 40 feet above an adjacent road. The volume and force of the spill were so large that 1.1 billion gallons of the inky mess flowed across the river, inundating 300 acres of land in a layer four to five feet deep, uprooting trees, destroying three homes, and damaging dozens of others. Miraculously, no one was killed.

In the aftermath, EPA Administrator Lisa Jackson promised to reevaluate by the end of 2009 the agency’s decades-old reluctance to regulate the disposal of some 129 million tons of coal ash generated annually, a startling large figure when compared to the 250 million tons of every category of household garbage that Americans generated in 2010. Jackson met this deadline. But her efforts were thwarted when an intensive industry lobbying campaign provoked the White House to rewrite the EPA proposal, adding two significantly weaker options and derailing the momentum of Jackson’s proposal.

Historically, events like the Kingston disaster resulted in dramatic governmental reforms, pushing the law forward to meet new challenges and provide expanded protection for public health and the environment. Congress enacted most of the regulatory statutes of the Progressive Era, the New Deal, and the Public Interest Era after widely publicized tragedies or abuses stirred public opinion to levels sufficient to overcome the inertia that otherwise overwhelms Congress and the regulatory agencies. But more recently, the passive response to the Kingston spill was not an outlier. The past decade has witnessed a confluence of crises across a broad array of federal regulatory programs. The response by Congress and the regulatory agencies to most of them has been tepid at best. This trend raises the question of why the twentieth century dynamic of crisis and reform has apparently disappeared in the early twenty-first century.

Using the Kingston disaster as a case study, this article offers several explanations for this unfortunate trend. We argue that regulated industries dominate regulatory debates on Capitol Hill and at the federal agencies to an unprecedented extent. Rather than stressing the importance of science-based rulemaking, the White House has engaged in its own intemperate interventions, upping the ante for flexing raw political muscle at both ends of Pennsylvania Avenue. The growing weakness of the media’s investigative reporting has exacerbated both trends.

These factors have sparked the deeply disturbing evolution of the administrative process into a kind of blood sport. This degeneration’s most obvious and immediate threat is to our shared commons, but over the long run it is equally likely to cause irrevocable harm to individual businesses and to the efficient functioning of regulated markets.

Keywords: environmental reform, coal ash, Kingston Fossil Fuel Plant