A d v a n c i n g E n v i r o n m e n t a l Pr o t e c t i o n T h r o u g h • A n a l y s i s • O p i n i o n • D e b a t e
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Galley Proof — The Environmental Forum
Regulating by
Regulators, Not
Industry
Rebecca M. Bratspies
C
hants of “drill, baby,
drill” had hardly faded
from the public mind
when BP’s Deepwater
Horizon exploded, killing 11 workers and spewing massive amounts of oil into the Gulf of
Mexico. The catastrophe highlights
just how inadequate regulatory
oversight over off-shore drilling had
been. But, regulatory failures surrounding Deepwater Horizon extend
well beyond a lone agency captured
by the industry it was supposed to
regulate. The BP disaster marks the
failure of deregulation itself. For two
decades, the American people have
repeatedly been told that private actors could be trusted to protect public interests. Coupled with a naïve
faith in technology, the assumption
that market forces could replace
government oversight drove calls for
deregulation, voluntary compliance,
and cooperative regulation — the
hallmarks of recent United States
regulatory policy.
Steeped in a “we’re all on the
same team” mentality, understaffed
regulators allowed industry to write
the rules and then assess their own
compliance with those rules. The
revolving door between government
and the private sector created an
overly cozy relationship in which
private interests replaced public interests.
BP and the rest of the oil industry took full advantage of this lax
oversight to cut corners on environmental safety. How many times
were we assured that off-shore oil
production posed little risk? Or that
the new technologies ensured oil
extraction “would not have an effect,
cumulatively or individually on the
environment.” Industry consultants
Galley Proof 1
❧ mass-produced generic environmental assessments, and the Minerals
Management Service blithely rubberstamped assertions that accidents
would easily be handled. Now we
see just how badly things can go
wrong when regulators abdicate
their watchdog function.
Among the lessons to be learned
from the Deepwater Horizon disaster
are two key principles that apply
across the modern regulatory state.
First, we must take risks seriously. Until April 20, few people
considered what would happen if an
offshore rig exploded and then sank,
causing oil to gush uncontrollably
into the ocean. The Coast Guard
did, but nobody listened to their
2002 call for rigorous regulatory
oversight to ensure that safety and
cleanup technology kept pace with
extraction technology. Indeed one
of the most striking aspects of this
catastrophe was how industry and
regulators alike completely disregarded the systemic risks inherent in
deepwater drilling. Industry had no
capacity whatsoever to respond to a
deepwater blow-out. Instead, the oil
industry assumed no such accident
would occur. And regulators let
them. As a result, three months into
the spill, BP cannot stop the flow of
oil — nor are it likely to do so anytime soon.
Going forward, the risk of catastrophic failure must be planned
for — with no exceptions. Generic
regional plans are no substitute for
real response plans for individual
wells. Regulators should require sitespecific worst-case scenario planning
before issuing any leases or permits.
This approach requires industry to
forecast what will happen if things
go disastrously wrong for a specific
well in a specific location. Armed
with this information, industry
would need to have technology in
hand, before drilling commences,
to reduce risks of that worst-case
scenario as much as feasible, and to
fix things, should an accident occur.
For example, Canada requires that
relief wells be drilled alongside any
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Galley Proof — The Environmental Forum
permitted well — the United States
should as well.
Second, we must unprivatize regulation. Private actors should never
be in the position of setting standards. Allowing them to do so guarantees that the resulting standards
will not be technology-forcing, and
increases the likelihood that inexpensive approaches will be favored,
even when demonstrably less effective. Private actors have one overriding concern — their bottom line.
All corporate decisions, by law, must
be made for the benefit of shareholders. Too often, this translates
into focusing on short-term, easily
monetized benefits. Regulation, by
contrast should protect the public’s
long-term interests, and must care
about unquantifiable benefits.
Protecting endangered marine
and shore animals, a thriving local
economy, healthy wetlands — these
are vital public interests that are
simply not on the corporate radar
screen. Private actors systematically
discount risks to these public goods
and overvalue benefits to themselves.
Only regulators, acting in the public
interest, can develop regulatory standards that will fully protect these
public interests.
As Deepwater Horizon demonstrates, we can and must do better.
Instead of adopting “hoping for
the best” as official policy, we need
robust, independent, and adequately
funded regulation focused on protecting the public’s right to a clean,
safe, and healthy environment.
Rebecca Bratspies teaches environmental law at CUNY School of Law. She is a
member scholar of the Center for Progressive Reform.
Galley Proof 2
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