Industry’s undue influence
Published 3:19 pm Monday, May 24, 2010
Government regulators really do have a role to play, it turns out. They’re not just there to stifle economic activity.
On the Gulf Coast and on Wall Street, we’ve seen the damage that can result from a lack of adequate, and knowledgeable, oversight. In both cases, it appears, those who were supposed to be maintaining order and safety by enforcing the rules were in over their heads, or dismissed or overruled by superiors. Or some combination thereof.
The pushback against regulation, understandably, comes most forcefully from those being regulated. In capitalism, there’s nothing surprising about that, or even necessarily wrong. What’s distressing is when it comes from within the agencies that are supposed to be policing activities that, when they go wrong, can unleash widespread disaster.
That’s what appears to have happened inside the Minerals Management Service, the federal agency in charge of regulating offshore oil drilling. The Washington Post reported Monday that top MMS officials repeatedly disregarded warnings from government scientists that their push to approve permits quickly posed serious environmental risks.
The very rules adopted by the agency five years ago, in fact, tend to put the industries being regulated in charge of such decisions. The Post reported that the rule governing what information the MMS should review before approving drilling plans says, “The lessee or operator is in the best position to determine the environmental effects of its proposed activity based on whether the operation is routine or non-routine.”
Really? If the company doing the drilling knows all there is to know, why have any oversight at all? The fox knows plenty about chickens. Might as well station him at the henhouse door.
The Post also cited documents that show MMS officials blowing off the advice of one of its staff biologists regarding the long-term effects of oil spills, advice that would have delayed an oil lease by triggering an environmental review. The biologist’s finding was rewritten so the lease process could move forward without delay.
Now, even as oil from BP’s massive spill off the Gulf Coast invades sensitive marshes in Louisiana, the New York Times reported Monday that environmental waivers are continuing to be granted for drilling projects. How bad must the environmental damage get before the bureaucratic mess is addressed?
Yes, overregulation is a danger. But that card has been seriously overplayed in recent years. The oil and financial industries clearly had too much influence over the writing of the rules that govern them, and their execution. It’s past time for the regulatory currents to change direction.
