Deregulation of Oil Drilling

From a number of perspectives the governmental approach of deregulation of industries doesn’t work.

The oil industry is supposed to be regulated by Minerals Management Service (MMS). Last Wednesday a Coast Guard Captain asked a regional supervisor, federal regulator:

It’s my understanding that [a blowout preventer is] designed to industry standard…manufactured by the industry, installed by the industry, with no government witnessing or oversight of the construction or installation. Is that correct?

The regional supervisor, federal regulator MMS answered:

That is correct…

Senator Bill Nelson stated it this way in the Wall Street Journal:

If MMS wasn’t asleep at the wheel, it sure was letting Big Oil do most of the driving.”

Critics say MMS was too close to the industry and had an inherent conflict of interest.

This story lays bare the far-reaching (and largely unnoticed) emasculation of government regulatory power, as it has succumbed to corporate agendas over the past several decades. Janines examines this, and other disturbing trends, in her book Shadow Elite, writes Linda Keenan and Janine R. Wedel in The Huffington Post.

And it’s imperative that we dissect the modus operandi of BP, its elite hired guns, assorted patrons, and compromised, enfeebled regulators, to better spot their tactics being used across government, corporate America, and Wall Street. This pernicious M.O. could be detected in both the recent Upper Big Branch Mine disaster, the bank industry collapse and the bailout that followed. So we should ask ourselves not just “how did these catastrophes happen?” but also, “how do we spot the next one waiting to happen?”

This deregulation trend had it’s etiology in the Reagan era.

[T]he push for “small government”, and often deregulation. Ironically, this drive led them to create a bigger, far less transparent “shadow government” — by steadily passing government work, cache — and, crucially, power — over to business interests. One result: the lines between business and government have blurred, making it hard to figure out who’s in charge, or what an agency even is. Case in point: the MMS. Was MMS a government regulator or an arm of the industry? You be the judge of this description, from the Wall Street Journal.

It is supposed to be a watchdog that halts drilling when it spots unsafe behavior. But it is also supposed …. to generate government revenue from drilling on government lands…..Of MMS’s fiscal 2010 budget of $342 million, nearly half comes from the oil industry….

Related posts:

1. Drill, Baby, Drill
2. The Republican view on compensation limits of corporate CEOs
3. Government for the Corporation and by the Corporation