Wednesday, May 26, 2010

Deepwater Horizon: Government Failure

The explosion of the Deepwater Horizon presents us with a true teachable moment. But the lesson isn’t that offshore drilling is bad or dangerous or wrong, or that oil companies are evil. No. The oil companies do bare the brunt of the blame and should be made to pay for all of the damage they have caused. But the real lesson here is that it’s time to reform our government because it keeps failing to do the few tasks it should be doing.

Under federal law, the Minerals Management Service is charged with inspecting offshore drilling rigs to make sure that they comply with all federal safety regulations. The MMS is supposed to inspect each rig at least once per month. We are now learning that they haven’t been doing that.

The exact number of times MMS inspected the Deepwater Horizon is not clear because MMS has been giving different numbers. They originally claimed to do 26 inspection in the last 64 months. But then they mysteriously raised this number to 48 out of 64, no explanation given. In either event, MMS failed to conduct between 25% and 59% of the required inspections.

This follows a citation in July 2002, when the Deepwater Horizon was shut down because the company had failed to conduct a pressure test of the blowout preventer -- a device that is supposed to stop the kind of gusher they can’t seem to stop right now. And in September 2002, the rig was cited again for problems with the blowout preventer.

Moreover, several years ago, MMS weakened its testing requirements on the very cutoff valves that should have prevented the current disaster. Indeed, they weakened these testing requirements so much that there is virtually no oversight of these key safety features. As a result, there have been repeated failures of these cutoff valves on other rigs in recent years -- at a time when inspections have been falling. This time, it went seriously wrong, costing eleven lives and billions of dollars in damage.

So why was this rig allowed to operate? Did BP trick MMS? No. Believe it or not, it turns out that the Deepwater Horizon was allowed to operate without providing safety documentation showing that these valves were functioning. Apparently, many of these rigs are. And Team Obama has ruled out stopping the process of granting such waivers, despite all the sound and fury coming out of the White House about this incident.

The problems here are obvious. First, the government is wasting so much money doing things it shouldn’t be doing that it has lost focus on the things it should be doing. Moreover, the government is too rife with conflicts of interest. For example, last year, MMS awarded the Deepwater Horizon an award for its safety history. Aside from the obvious of “you gave an award to people who kept being cited for violations?”, is the bigger question of why is MMS giving awards in the first place? Their job is to inspect. They are to shut down those who fail and pass those who do. Their job is not to pass out awards or to play footsie with these companies.

And lest you think this is a minor point, a report by the Interior Department's Inspector General now reveals that the relationship between the agency employees and the oil companies was so close that it bordered on bribery. Apparently, agency personnel accepted sporting-event tickets, meals, and other gifts from the oil companies they were supposedly monitoring. The report also finds that agency personnel, rather than doing inspections, were using government computers to view pornography.

Further, why is the agency doing inspections with the one hand, but collecting billions of dollars in royalties with the other? How can it make sense to give the inspection role to an agency whose primary incentive is to maximize output? Where is their incentive to do honest inspections?

The time has come to remake the government. It is time to strip out the conflicts of interest, it is time to hold everyone in the agency chain of command accountable for their failures, it is time to divorce government from its incestuous relationship with industry, it is time to focus these agencies on doing the job they should be doing and doing away with all of the distractions.

It is a scandal that the government allowed defective gear to be put into place without a substantive inspection. And it is a bigger scandal that Team Obama is not planning to fix this situation.


CrispyRice said...

So, once again, the government causes more problems than it solves. Ugh!

Thanks for the article, Andrew!

AndrewPrice said...

Well said CrispyRice. Don't get me wrong -- the companies are at fault. But so is the government, and both need to be fixed.

AndrewPrice said...


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Joel Farnham said...


I expect this will be blamed once more on Bush. The thing of it, Obama still doesn't know what to do.

AndrewPrice said...

Joel, I'm sure they'll try to blame Bush. But the truth is, this is a failure that everyone involves shares equal blame for -- Bush, Obama, the individual employees, Congress for not doing its oversight job, and the oil companies.

This is one of those moments where we need to learn and reform to correct these problems. Unfortunately, Obama is trying to cast blame and has steadfastly refused to make the kinds of changes that are needed -- though there is talk of breaking away the royalty collection function. That's a start, but much more is needed.

BevfromNYC said...

I still maintain that the time to cast blame is after the crisis has passed. Obama & Co. have wasted too much time trying to point the fingers away from themselves and not enough time coordinating a solution. The wetlands of the Gulf Coast are being decimated because Washington can't seem to focus on the problem at hand. Gov. Jindal has been waiting for weeks for the okay from Washington to build sandbars or anything to protect the coastline.

Joel Farnham said...


That is what is wrong with Gov Jindal. Waiting? For Washington?

Why wait? Do what has to be done.

Patti said...

you are right about remaking the government. the time has come for a clean sweep. i am sick of waking up every single day and wondering what the hell is wrong today with washington. i needs a vacay from the insanity. problem is, there is no escape. at the moment.

BevfromNYC said...

Joel - Absolutely! I don't know WHY he is waiting either! But then I don't know WHY people in New Orleans waited to leave when a Cat.5 Hurricane was coming their way either. And why no one bothered to move all of the school buses, city owned construction vehicles, etc. to high ground either. But that's just me.

These are some of the reasons why Louisiana will not be asked to join Texas when it secedes...

AndrewPrice said...

Bev, That's the problem with Washington, is that they spend all their time pointing fingers but never doing anything constructive.

I do think there are things they could and should do immediately to address this. For one thing, get out there and inspect every other rig before this happens again.

I do agree that reforming should be done thoughtfully and not in the heat of the moment. But there are some obvious things they should do to address the conflicts problems.

AndrewPrice said...

Joel, I think it's time that our governors came to realize that they can't wait for Washington. Like I said, everyone deserves blame in this one.

Bev, Very good point! And some sports announcer is in trouble right now for making that very point -- he compared Nashville to Katrina and openly wondered why the people in New Orleans couldn't help themselves and even to this day are waiting for others to help them. He's being called "racist" for making that point. But he's absolutely right. Compare neighboring Mississippi with New Orleans -- they got hit just as bad but they went about rebuilding right away. New Orleans waited for others to come help them.

AndrewPrice said...

Patti, Agree! Government should be small, efficient and effective. It should do its job and we should rarely hear about it.

Instead, our government is run by attention seeking clowns and morons who don't know the first thing about managing anything.

LawHawkSF said...

In defense of Gov. Jindal, his people are doing everything they can do with state resources. Only the Corps of Engineers and FEMA have the resources of the magnitude to build the barrier islands. And unlike the previous idiot governor of the state, Jindal acted immediately on requesting the federal deployment of resources. State sovereignty is a genuine issue.

The feds are forbidden by the Constitution and law to act independently in state territories without the request of the governor. Jindal made that request immediately. His predecessor during Katrina agonized, cried, dithered, and waited before finally asking for the federal government to assist.

In addition, Bush understood the Constitution, and held his federal assistance back until receiving the request from the governor. But he had everything in place, complete with "rescue" ships waiting just outside New Orleans, ready to act the moment he got the request from the governor.

In the current situation, the governor asked for federal assistance the minute he could do so, and Obama has nothing in place, nothing ready, nothing planned, and no sign of even bothering to return the governor's call.

Anonymous said...

LawHawk, that's a good point. Living in coastal NC, we are always watching hurricanes closely. We've come close enough so many times, that our Governor usually doesn't wait to declare a state of emergency. I was amazed all through Katrina that Louisiana's governor didn't do the same thing, yet everyone in the media and on the left were quick to blame Bush when it was the mayor and the governor who failed to act in a timely manner. No one in the media bothered to mention the fact that it's the governor who has to declare a state of emergency to get federal help. Unbelievable! TJ

AndrewPrice said...

Lawhawk, Excellent points. I do wonder though, how much states are going to need to start acting on their own without waiting from help from the federal level. The feds have shown themselves to be incompetent in disaster after disaster. At some point, it might be wise to stop looking to Washington, even if that's where most of the resources are?

AndrewPrice said...

TJ, I don't think Bush handled Katrina well at all -- not from a PR standpoint to how they handled it on the ground.

BUT, the vast, vast majority of the fault on that one lies with the state government. I think it was ridiculous that the governor down there (can't remember her name. . . Landrieu?) waited so long to call for help. And then spent days trying to blame everyone but herself. And it really annoyed me that the MSM intentionally didn't get that point.

Also, I think it was insane how the "government" of New Orleans botched every step along the way.

The whole thing was a total disgrace. I note, by comparison, how well other states have handled the disasters they've encountered. North Carolina seems to do quite well with hurricanes, as does Florida. Both always seem to respond quickly and correctly, to learn any lessons that need to be learned, and to rebuild better each time. Same thing with Texas and Mississippi. The real outlier here has been Louisiana and the Feds.

BevfromNYC said...

So instead of working with the Governors of the coastal states to get the requested resources to protect the coastline while BP tries to stop the flow of oil, Obama & Co. been spending their time deflecting the blame away from themselves.

I am guessing, since Obama et al. have lived and worked in the Chicago area most of their careers, they haven't had any experience dealing with crises like hurricanes, floods, oil spills...well, any real crises actually. Where's big hotshot FEMA guy from Florida?
This is bad enough, but what happens when we have a real terrorist attack that has to be dealt with?

Does anyone have a bunker I can hide in??

BevfromNYC said...

Andrew - FYI - Kathleen Blanco was the name of the LA Governor who boo-hooed her way through Katrina.

Mary Landrieu is the LA Senator that got a special healthcare deal...

LawHawkSF said...

Andrew: We must get back that old fashioned concept of helping ourselves and helping our neighbors. San Francisco and Los Angeles recently showed some of the differences. After the Loma Prieta quake, San Francisco depended way too much on federal help. Los Angeles acted largely on its own with incidental federal help after the Northridge quake. Even though the Northridge quake occurred after the Loma Prieta quake, and was much worse, Los Angeles recovered far more quickly.

The problem in Louisiana is a little different. What can be done is being done on the dry land (not counting the federally-dependent people of New Orleans), but all the air boats, catfish boats and private pleasure boats in the Gulf states would not be enough to do what needs to be done to build barrier islands, particularly to protect the bayous. That's something only a nation has the resources to do.

For national emergencies, we should be able to rely, well, on the nation. But the Obama administration is too busy excoriating BP for its negligence to be bothered doing that national job. The Talker-in-Chief should be providing whatever assistance he can immediately, and worry about placing blame later. But then, Obama needs his political cover. Real people, real nature, and real executive management are secondary to his political image.

Anonymous said...

Andrew, I didn't mean to imply that Bush was blameless, but it irritates me to no end that the media made it sound like it was all his fault when the bulk of the blame should have been directed at the mayor and the governor.

By the way, who was the sports announcer that has come under fire? I haven't heard about that yet.

AndrewPrice said...

Bev, Thanks. I just couldn't remember her name.

And you make a very good point. If this is how ready they are to handle a relatively simple crisis like this, what will they do when it gets really serious?

AndrewPrice said...

Lawhawk, All great points. Sadly, only the feds have the power to deal with national emergencies -- and I don't generally have a problem with that, except that the Feds seem to be getting less and less competent every year.

Thanks for the insight on the California quakes. Once they left the news cycle, you never really heard much about how things went afterwards.

And you're right about Obama -- he's only concerned with the politics of this, not with actually solving it.

AndrewPrice said...

TJ, Agreed about Bush and the media. It annoyed me to no end as well. That was pure politics by the media.

The announcer was Chris Myers of Fox Sports. Here's what he said:

"It's a great country here. We have disasters issues when people pull together and help themselves and I thought the people in Tennessee, unlike -- I'm not going to name names -- when a natural disaster hits people weren't standing on a rooftop trying to blame the government, okay. They helped each other out through this."

StanH said...

What in the hell did people expect electing the inexperienced Barry as Commander-n-Chief. In a crisis, action is required lickity-split, and mistakes will be made, however inaction will only lead to atrophy. Quick, on your feet thinking, is counter intuitive to every fiber in Barry’s being, his end of the deal was supposed too be, to look good and read the teleprompter, and his side kick Biden is as useless as teats on a boar hog. If BP doesn’t figure it out no one will!

Katrina was a cluster on many levels, Blanco, Nagin then Bush. It’s the states responsibility to “declare a state of emergency.” Blanco refused, and Nagan went along. Once the emergency declaration was made Bush moved fairly well, General Honore’ was the perfect choice and is ever famous statement, “we’re not stuck on stupid, down here.” Other that the infirmed, or the indigent, what kind of fool doesn’t get out of the way of a Cat. 5 hurricane, in my mind the bulk of that disaster is the fault of the people that stayed behind.

AndrewPrice said...

Stan, Very true. I have nothing to add.

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