Conflict of Interest That Led to the Gulf Oil Disaster

• Date: 01 May 2011

41 ELR 10414 ENVIRONMENTAL LAW REPORTER 5-2011

C O M M E N T S

Conf‌lict of Interest That Led

to the Gulf Oil Disaster

by Peter Jan Honigsberg

Peter Jan Honigsberg is a Professor of Law, University of San Francisco.

On April 20, 2010, BP’s Deepwater Horizon drill-

ing rig in the Gulf of Mexico exploded, killing 11

people and spilling billions of gallons of oil into

the Gulf. In the days and weeks that followed, the media

pointed to the Minerals Management Services (MMS), the

regulatory agency responsible for managing oshore drill-

ing, as being complicit with BP. e MMS issued permits

for deepwater drilling in violation of its regulations, pro-

vided hundreds of exemptions to the regulations, and had

allowed the companies to draft the reg ulations that suited

their interests and objectives.1 e MMS was accused of

being in bed, both literally and guratively, with BP and

other oil companies.2

Consequently, the origin of the oil disaster can be traced,

in signica nt part, to the MMS and its close relationship

with the industry it had been charged with regulating. e

roots of the disaster date back to the early years of the Ron-

ald Reagan Ad ministration when, in 1982, controversial

U.S. Department of the Interior (DOI) Secretary James

Watt restructured the agencies responsible for revenue col-

lection and regulatory oversight of the oil and gas indus-

try, merging the responsibilities of two agencies into one.

Even if we ascribe t he best intentions to President Reagan

and James Watt, the road they paved in 1982 led directly

to the BP disaster nearly 30 years later. e only question

left open after t hey restructured the agencies in 1982 was,

when would the disaster strike?

1. Jason DeParle, Minerals Management Service Had a Mandate to Produce

Results, N.Y. T, Aug. 7, 2010, http://www.nytimes.com/2010/08/08/

us/08mms.html (last visited Mar. 30, 2011).

2. Juliet Eilperin & Scott Hingham, How e Minerals Management Ser-

, W. P, Aug. 24, 2010,

http:// www.washin gtonpost .com/wp -dyn/con tent/ar ticle/2 010/08/2 4/

AR2010082406754.html (last visited Mar. 30, 2011); C. R

S., R   M M S  

A   D H O S (Nov. 10, 2010)

[hereinafter CRS R].

I. James Watt and His Natural Resources

Agenda Leading to the Creation of the

MMS

By the time President Reagan assumed oce in January

1981, he had selected James Watt a s his Secretary of the

Interior. Watt, who had ea rned his B.A. a nd J.D. degrees

at the University of Wyoming and had been a n aide to

Sen. Alan Simpson (R-Wyo.), came with experience and

controversy.3 Prior to his DOI appointment, Watt had

been the Secretary to the Natural Resources Committee

and Environmental Pollution Advisory Panel of the U.S.

Chamber of Commerce, the Deputy Assistant Secretary

of Water and Power Development in the DOI, and Vice-

Chairman of the Federal Power Commission.4 Watt was a

fervent supporter of private development of federal lands.5

Because of his background, environmentalists challenged

Watt’s selection as guardian of our natural resources and

the environment.6

Soon after he was conrmed, Watt—conjuring up

the recent memory of the Iran hosta ge crisis and the

consequent long line s of f rustrate d Americans lining

up around city blocks waiting for their t urn at the gas

pumps—announced that the United States would never

again be beholden to t he oil-rich states in t he Middle

East.7 e United States would henceforth embark on

its own dome stic oil production and pursue independent

oil policies. And Secret ary Watt wa s determined to “dril l

more” and “mine more”8 to achieve the n ation’s indepen-

dence from foreign oil.

e Administration’s initial goal wa s to promote deep-

water dril ling along the extended coastlines on three

sides. However, when Watt encountered resistance from

the states along the eastern and western seaboards, the

Reagan Administration shifted its focus to deepwater

drilling in the Gulf of Mexico. e Gulf states, particu-

3. , in C A O (Gale 2003).

4. Id.

5. Id.

6. Id.

7. Eilperin & Hingham, supra note 2.

8. Id.

         

     

       

 



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