Regulating by Regulators, Not Industry

• Author: Rebecca M. Bratspies
• Position: Teaches environmental law at CUNY School of Law. She is a member scholar of the Center for Progressive Reform
• Pages: 48-48

Page 48 ❧ THE ENVIRONMENTAL FORUM Copyright © 2010, Environmental Law Institute®, Washington, D.C. www.eli.org.

Reprinted by permission from The Environmental Forum®, Sept./Oct. 2010

Th e fo r u m

mass-produced generic environmen-

tal assessments, and the Minerals

Management Service blithely rub-

berstamped 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 seri-

ously. 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. e 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 disre-

garded 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 ac-

cident would occur. And regulators

let them. As a result, three months

into the spill, BP cannot stop the

f‌low of oil — nor is it likely to do so

anytime soon.

Going forward, the risk of cata-

strophic failure must be planned

for — with no exceptions. Generic

regional plans are no substitute for

real response plans for individual

wells. Regulators should require site-

specif‌ic worst-case scenario planning

before issuing any leases or permits.

is 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

permitted well — the United States

should as well.

Second, we must unprivatize reg-

ulation. Private actors should never

be in the position of setting stan-

dards. Allowing them to do so guar-

antees that the resulting standards

will not be technology-forcing, and

increases the likelihood that inex-

pensive approaches will be favored,

even when demonstrably less ef‌fec-

tive. Private actors have one overrid-

ing concern — their bottom line.

All corporate decisions, by law, must

be made for the benef‌it of share-

holders. 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 stan-

dards that will fully protect these

public interests.

As Deepwater Horizon demon-

strates, 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 pro-

tecting the public’s right to a clean,

safe, and healthy environment.

Rebecca m. Bratspies teaches environ-

mental law at CUNY School of Law. She is a

member scholar of the Center for Progres-

sive Reform.

Regulating by

Regulators, Not

Industry

R M. B

Chants of “drill, baby,

drill” had hardly faded

from the public mind

when BP’s Deepwater

Horizon exploded, kill-

ing 11 workers and spewing mas-

sive amounts of oil into the Gulf of

Mexico. e catastrophe highlights

just how inadequate regulatory

oversight over of‌f-shore drilling had

been. But, regulatory failures sur-

rounding the Deepwater Horizon

extend well beyond a lone agency

captured by the industry it was sup-

posed to regulate. e BP disaster

marks the failure of deregulation

itself. For two decades, the Ameri-

can 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 regu-

lation — 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. e

revolving door between government

and the private sector created an

overly cozy relationship in which

private interests replaced public in-

terests.

BP and the rest of the oil indus-

try took full advantage of this lax

oversight to cut corners on envi-

ronmental 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