Oil Industry Needs More Regulation, Commission Concludes

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Shortly after blaming last summer's disastrous oil spill on systemic corporate and regulatory failures, a presidential commission has issued a final report calling for more government regulation of offshore oil drilling. The panel's suggestions for preventing future catastrophes include creating an independent safety agency within the Department of the Interior to monitor offshore drilling safety, establishing an oil industry-financed entity to enforce safety standards as in the nuclear power and chemical industries, and increasing the $75 million cap on liability for accidents.

Two Democrats--Senator Robert Menendez of New Jersey, and Representative Edward Markey of Massachusetts--say they will introduce legislation that incorporates many of the commission's recommendations.

What should we make of the panel's conclusions, and will they actually be implemented?

  • This Is About Balancing Risk and Reward, states Time's Bryan Walsh: "It all boils down to changing the risk/reward ratio at the heart of drilling and regulation, away from one that focuses almost completely on the financial reward of drilling (for industry and government, which makes tens of billions on lease sales and taxes) and towards one that gives risk its proper place."
  • And Panel Is Not Against Deepwater Drilling, The Economist points out:

Indeed the fact that deepwater drilling can be carried out safely is one of the key messages of the report ... But it is mindful of the fact that new frontiers for offshore development pose challenges that might not be met just by the improvements it has in mind for the industry as a whole. The Arctic is a particular worry, and the commission points to a need for a better Coastguard search-and-rescue capability there, as well as more thorough plans for the containment of leaks, if it is to be developed safely.

  • Industry Shouldn't Be Blamed For Single Incident, argues Erik Milito of the American Petroleum Institute in a statement:

This does a great disservice to the thousands of men and women who work in the industry and have the highest personal and professional commitment to safety.

An accurate assessment must acknowledge all the facts, such as the numerous concrete actions that industry has taken both before and since the accident to identify and implement additional safeguards ...

  • Political Climate Not Hospitable to Regulation, notes John M. Broder at The New York Times: "Republicans in Congress have blocked any new rules for offshore drilling and new spending for regulation and have not acted on proposals to raise the liability cap. There is little sign that these will be high priorities when lawmakers reconvene."

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