I wonder when people are going to realize that the catastrophe in the Gulf was caused by BP’s reckless decisions, but also by reckless U.S. government regulators. I keep calling this a moral catastrophe above all, at least in its causes, because it is the outcome of both industry and government not taking their grave responsibilities seriously. The New York Times has a long report on why the fail-safe device that was supposed to seal the well in the event of disaster failed. Check this out:

They wondered if the blades had by chance closed uselessly on one of the nearly indestructible joints that connect drilling pipe — a significant bit of misfortune, given a decision years before to outfit the Deepwater Horizon’s blowout preventer with just one blind shear ram when other rigs were already beginning to use two of them to guard against just this possibility.
But the questions raised by the failure of the blind shear ram extend well beyond the Deepwater Horizon.
An examination by The New York Times highlights the chasm between the oil industry’s assertions about the reliability of its blowout preventers and a more complex reality. It reveals that the federal agency charged with regulating offshore drilling, the Minerals Management Service, repeatedly declined to act on advice from its own experts on how it could minimize the risk of a blind shear ram failure.
It also shows that the Obama administration failed to grapple with either the well-known weaknesses of blowout preventers or the sufficiency of the nation’s drilling regulations even as it made plans this spring to expand offshore oil exploration.

Folks, try to hoist yourself outside your usual political trenches. This was an epic failure of both the government and industry. It is not the case that we shouldn’t have oil drilling in the Gulf, at least in my view, but if we’re going to do it, considering the stakes — the survival of life in the Gulf of Mexico, and cultures and economies of coastal regions — we’re going to have to take the utmost precautions. That has not been done. And as terrible as BP’s response has been so far, I have not seen the CEO of USA, Inc., fire a single person for his or her catastrophic failure to regulate. Sure, he got the resignation of the head of MMS, but Elizabeth Birnbaum was a lousy scapegoat, having come to the MMS less than a year ago, years after critical decisions that led to the disaster were made. From the NYT story (read past the jump; it’s well worth your time):

Even in one significant instance where the Minerals Management Service did act, it appears to have neglected to enforce a rule that required oil companies to submit proof that their blind shear rams would in fact work.


As with BP, the rig’s owner, Transocean, was aware of the vulnerabilities and limitations of blowout preventers.
But they were not the only ones.
The Minerals Management Service knew the problems, too. In fact, the agency helped pay for many of the studies that warned of their shortcomings, including those in 2002 and 2004 that raised doubts about the ability of blind shear rams to cut pipe under real-world conditions.
In some cases, the agency did not act on the recommendations of its consultants. But in 2003, it adopted a regulation requiring companies to submit test data proving that their blind shear rams could work on the specific drill pipe used on a well and under the pressures they would encounter. Companies had to submit this information to get drill permits.
At least, that was the way it was supposed to work.
Last year, when BP applied for its permit to drill the Macondo well, its application was reviewed by Frank Patton, an engineer in the New Orleans office of the Minerals Management Service. With nearly three decades of experience working for the agency and the oil industry, Mr. Patton was fully aware of the blowout preventer’s importance.
“It is probably the most, in my estimation, the most important factor in maintaining safety of the well and safety of everything involved, the rig and personnel,” he testified last month during the Coast Guard’s inquiry into the disaster.
Yet Mr. Patton said he approved BP’s permit without requiring proof that its blowout preventer could shear pipe and seal a well 5,000 feet down. “When I was in training for this, I was never, as far as I can recall, ever told to look for this statement,” he explained.
Mr. Patton said he had approved hundreds of other well permits in the gulf without requiring this proof, and BP likewise contends that companies have never been asked to furnish this proof on drilling applications.
In subsequent testimony, Michael Saucier, the agency’s regional supervisor for field operations in the gulf, insisted that the regulation was enforced. But asked if anyone ensures that a blowout preventer functions properly, Mr. Saucier replied, “I don’t know if somebody does or not.”

Why are these men still on the government payroll? Could it be because the government serves not the public good, but the interests of the oil and gas industry?

Capt. Hung M. Nguyen, the co-chairman of the Coast Guard inquiry, seemed incredulous at the agency’s deference to the industry on the most critical of safety devices.
“So my understanding,” Captain Nguyen said, “is that it is designed to industry standard, manufactured by industry, installed by industry, with no government witnessing oversight of the construction or the installation. Is that correct?”
“That would be correct,” Mr. Saucier said.

And do not miss this part:

Representative Henry A. Waxman, chairman of the House Energy and Commerce Committee, asserted last week that the common thread behind all of these decisions was that they saved BP time and money but raised the risk of catastrophe. “BP has cut corner after corner to save $1 million here, a few hours or days there, and now the whole Gulf Coast is paying the price,” Mr. Waxman said.
However, as Tony Hayward, BP’s chief executive, repeatedly told Mr. Waxman’s committee last Thursday, many of these decisions were approved by the Minerals Management Service.

Read the entire NYT report, which is fantastic journalism. This is crazy-making, all of it. I cannot help thinking of this as another version of the government-industry moral failure that resulted in the Wall Street collapse. It’s a harsh thing to say, but I have little to no faith left in government or industry to do the right thing. A cheap and easy conclusion? Yeah, maybe. But look at the evidence around you. Eventually, there is a price to be paid for lies and corruption. As usual, those paying the heaviest prices are not the presidential golfers or the corporate yachtsmen, but the “small people” who can least afford it.

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