Updated at bottom.
President Obama may make a major proposal: breaking up the Minerals Management Service into two agencies. One of the agencies will continue to oversee the granting of leases or chartering of resources for exploration and extraction. The second agency, separate entirely from the first, will serve as a the government policeman overseeing industrial activities.
This is potentially a very positive move by the Obama administration; if well-executed, this breakup of the MMS could be the first positive major Federal agency change in a very long time insofar as environmental issues are concerned, and could be the first real, major, positive thing that Obama has done on "the environment" as a political issue. This breakup probably should happen regardless of any disaster or lack thereof, but if the MMS changes do occur, then we will all be able to say that the Horizon disaster was the major driving force. The MMS is famously corrupt and broken – taking away enforcement power from the part of the agency that is most prone to being (literally, at times) in bed with the oil and extraction industry is a part of a much-needed change.
Furthermore, any such serious execution of the creation of a separate safety agency is an example of the US following a superior, already existing European model:
… Mr. Danenberger: In 2004, Norway separated its safety and resource management functions. The U.K. had done this after Piper Alpha, and Australia recently established a separate offshore safety regulator. Can you comment on the pros and cons of being an independent offshore safety regulator?
Mr. Ognedal: This is a good example of the influence of the political system of a country on safety regulatory matters. Not that I disagree, but the change made to separate safety and petroleum administrative matters was probably also aimed at reducing political risk. We have had no problems relating to that fact. Our role and mandate has now become much clearer and we have been given all the necessary authority to fulfill our mission. However, it has placed a big responsibility on the PSA. We must ensure we make the right decisions and be able to defend them. For myself, I think our oversight of safety in the petroleum industry has become both better and stronger because of this change. But others shall have to judge that …
The Norwegian model, incidentally, followed the British model. The British made a safety agency change after … a horrible offshore oil drilling rig disaster:
… Britain similarly severed these functions after a 1988 oil rig explosion in the North Sea, known as the Piper Alpha incident, that killed 167 people. It remains the world’s worst offshore oil rig accident in terms of lives lost …
The importance of the US, finally, following a functioning European approach to dealing with similar issues cannot be understated. Historically, the US, politically, has faced troubles emulating successful European approaches due to widespread inaccurate, demonizing portrayals of any successful European government-based approach to solving problems.
Breaking up the MMS is not a complete response to the Horizon disaster – we must have a moratorium on new leases – forever – but it is a great step forward.
Elsewhere, the atrocious Mary Landrieu continues to try to sell her home state of Louisiana out to the extraction industry:
… But support for offshore drilling was not limited to the Republican side. Senator Mary L. Landrieu, Democrat of Louisiana, said, “We must find a way to do this more safely.”
But she added, “From 1947 to 2009, 175,813 barrels spilled out of 16 billion produced — one one-thousandth percent of the total production. I think it’s important to keep that in perspective.’’
“America uses 20 million barrels of oil a day, and we produce less than half of that,’’ she said. “Any constriction of domestic oil production, either onshore or offshore, will only further put us in a perilous situation.’’
If production moves abroad, Senator Landrieu said. “we will export some of these problems to countries less equipped and less inclined to prevent this kind of catastrophic disaster.” …
Notice her particularly disgusting attempt to spin the issue: if the US disallows offshore drilling here, then the oil companies will take their drilling to developing countries, where environmental disasters will occur, she tells us. What she doesn’t tell us is that the oil industry is paying her to tell the public these things.
I fully expect the industry to deploy Landrieu – their go-to girl on this issue now – against any attempt to break up the MMS.
For the last several days, the only key development on this issue has been the impressive, rapid failure of the attempt to cap the bigger remaining well leak by BP due to a buildup of methane hydrate ice. This spill is becoming a fantastic demonstration of the limits on human technology to respond to disasters we could have avoided, and is a great metaphor for the larger picture of global climate change. Over the last few days, the now commodified aspects of this issue: the expanding spill, the outrage, the industry’s internal witch hunt, and the political response – have all been amptly broadcast through mass media. I am trying to learn more about how pressure groups and environmental organizations are responding to this disaster, and what work is being done to stop the expansion of offshore oil drilling. I hope to have more on this important aspect – the hard work of moving past outrage and stopping drilling – soon.
Here is what we are up against:
… On Monday, BP said it spent $350 million in the first 20 days of the spill response, about $17.5 million a day. It has paid 295 of the 4,700 claims received, for a total of $3.5 million. By contrast, in the first quarter of the year, the London-based oil giant’s profits averaged $93 million a day …
Oil is so profitable that BP can cause a historic, unstoppable deep-sea oil spill, and still be expending only a fraction of their daily profits on oil addressing the disaster.
Certainly, any new Federal enforcement agency that polices the activities of the oil industry is going to need major funding. While the oil industry has scuttled previous attempts at taxing their profits, it is vital that the Horizon disaster become a driving force behind a new move tax oil profits. It is vital to fund the clearly needed policing agency. Furthermore, no company like BP that causes such a disaster should face only manageable daily profit reductions as a consequence, and the movement to greatly raise the "liability cap" for corporate-caused disasters like the Horizon disaster should go well beyond simply raising a total cap on liability but should demand large, daily fines guaranteed to drive an oil company’s profits immediately into the red after any such major disaster is determined by the new policing agency to have been caused by a company.
There is just no way that a company like BP should be able to cause a spill like the Gulf spill currently underway, and still have huge daily profits to dig into in order to pursue a combined lobbying strategy in Congress and massive public PR program on top of the cleanup costs and liabilities.
The corporations that are largest by market cap and global operational reach in general should never, never face a regulatory and liability picture in which the costs to them of even the worst disasters are well within a sustainable profitability picture for the corporations. That is the "crime pays" regulatory approach. "Crime pays" is not a viable response to the Horizon disaster, and all that came before it.