WILLIAM GALSTON MAY 4, 2010
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While it may take months to stop the BP oil spill in the Gulf of Mexico, it’s not too soon to begin asking some questions about why it happened and what can be done to minimize the chance that something like this will happen again. Thanks to The Wall Street Journal’s terrific reporting last week, there are two important things we already know.
First, an oil-drilling procedure called cementing—which is supposed to prevent oil and natural gas from escaping by filling gaps between the outside of the well pipe and the inside of the hole bored into the ocean floor—has been identified as a leading cause of well blowouts. Indeed, a 2007 study by the Minerals Management Service (or MMS, the division of the Interior Department responsible for offshore drilling) found that this procedure was implicated in 18 out of 39 blowouts in the Gulf of Mexico over the 14 years it studied—more than any other factor. Cementing, which was handled by Halliburton, had just been completed prior to the recent explosion. The Journal notes that Halliburton was also the cementer on a well that suffered a big blowout last August in the Timor Sea off Australia. While BP’s management has been responsive to press inquiries and relatively forthcoming as to its responsibility, Halliburton has refused to answer any questions—an all-too-familiar stance on its part.
Second, the oil well now spewing large quantities of crude oil into the Gulf of Mexico lacked a remote-control acoustic shutoff switch used by rigs in Norway and Brazil as the last line of defense against underwater spills. There’s a story behind that. As the Journal reports, after a spill in 2000, the MMS issued a safety notice saying that such a back-up device is “an essential component of a deepwater drilling system.” The industry pushed back in 2001, citing alleged doubts about the capacity of this type of system to provide a reliable emergency backup. By 2003, government regulators decided that the matter needed more study after commissioning a report that offered another, more honest reason: “acoustic systems are not recommended because they tend to be very costly.” I guess that depends on what they’re compared to. The system costs about $500,000 per rig. BP is spending at least $5 million per day battling the spill, the well destroyed by the explosion is valued at $560 million, and estimated damages to fishing, tourism, and the environment already run into the billions.
There’s something else we know, something that suggests an explanation for this sequence of events. After the Bush administration took office, the MMS became a cesspool of corruption and conflicts of interest. In September 2008, Earl Devaney, Interior’s Inspector General, delivered a report to Secretary Dirk Kempthorne that has to be read to be believed. One section, headlined “A Culture of Ethical Failure,” documented the belief among numerous MMS staff that they were “exempt from the rules that govern all other employees of the Federal Government.” They adopted a “private sector approach to essentially everything they did.” This included “opting themselves out of the Ethics in Government Act.” On at least 135 occasions, they accepted gifts and gratuities from oil and gas companies with whom they worked. One of the employees even had a lucrative consulting arrangement with a firm doing business with the government. And in a laconic sentence that speaks volumes, the IG reported: “When confronted by our investigators, none of the employees involved displayed remorse.”
So here’s my question: what is responsible for MMS’s change of heart between 2000 and 2003 on the crucial issue of requiring a remote control switch for offshore rigs? What we do know is that unfettered oil drilling was to Dick Cheney’s domestic concerns what the invasion of Iraq was to his foreign policy—a core objective, implacably pursued regardless of the risks. Is there a connection between his infamous secret energy task force and the corrupt mindset that came to dominate a key program within MMS? Would $500,000 per rig have been regarded as an unacceptably expensive insurance policy if a drill-baby-drill administration hadn’t placed its thumb so heavily on the scale?
It’s possible that my dark suspicions are baseless, and there’s no connection between the Bush-Cheney administration’s energy policy and the sad events of the past two weeks. But I’m just one guy with a keyboard reading documents and asking questions. I hope that some entity—public or private—with the needed staff and resources will do what’s necessary to get to the bottom of these questions. Before we even consider going forward with any more offshore drilling, we need some answers.
16 comments
Great article, William. I've heard that shut-off valves SHOULD have been "de rigueur" for our fragile, offshore rigs ... and you'll probably NOT see any evidence, to the contrary.
- JohnBorder
May 4, 2010 at 12:23am
Another example of the Reagan/Bush economic ideology: privatize profits and socialize losses. Who are the real socialists now?
- desertdog
May 4, 2010 at 10:03am
"I hope that some entity—public or private—with the needed staff and resources will do what’s necessary to get to the bottom of these questions. Before we even consider going forward with any more offshore drilling, we need some answers." You're kidding, right? And who will investigate? This administration? No way. And the press? Again, no way. They can't be bothered since we don't want to finger point, you know. At a minimum, I'm glad you brought this sorry story to light but I'm afraid it won't go any further than what you wrote.
- tnmats
May 4, 2010 at 10:13am
Galston overlooks the fact that Halliburton paid Dick Cheney $400,000 in salary during his first term as vice president. It's not just the secret meetings and the deregulatory push: Vice President Cheney was on Haliburton's payroll during the period Galston discusses.
- rhubarbs
May 4, 2010 at 11:05am
We get the leaders we deserve. If Dick Cheney is to blame for the gallons of oil gushing their slimy way towards our shores, then so are the good Americans who voted for him - twice. So are those of us - most of us - who sat on our behinds and let a tilted Supreme Court select the man to fill our highest office. There is a terrible poetic justice in all of this. The country that has no limits to its thirst for oil will finally get its thirst quenched. May God protect the innocents - the wildlife - that will be punished alongside of us.
- gmodell
May 4, 2010 at 11:26am
Can there be any doubt that Cheney was the most amoral criminal ever to hold the office? The great injustice is that the man will never be prosecuted and personally suffer for the tragedies he engineered while controlling the Bush presidency.
- appleton
May 4, 2010 at 12:11pm
Gmodell, you basically said what I posted in JChait blog post yesterday, about the GOP looking to reap big gains this fall: Americans get and deserve the government they (we) have. This is why I quit listening to those who bellyache about government, then bellyache when something big and bad happens and scream "where is the government"? My retort is "you wanted it off your back, so now you got it". I still have to wonder where the press is, who used to do a decent job uncovering all of this unseemliness. Come to think about it, I know where they are: covering what Tiger Woods or Riley Hunter are doing today. They know what is really important.
- tnmats
May 4, 2010 at 12:33pm
On a darkly humorous note, that Department of the Interior OIG report linked to in the article actually is great reading. My two personal favorites: “Sexual relationships with prohibited sources cannot, by definition, be arms-length.” Also, one of the report's principals definitely deserves a slow clap for not just soliciting a subordinate for cocaine and sex while at work, but then paying for the coke with a personal check. Sigh.
- janus
May 4, 2010 at 1:54pm
The de-regulatory culture of the US Government spans the Clinton, Bush, and Obama administrations, not to mention the Thatcher, Blair, and Brown governments. This is also true of just about any government in West Africa or the ex-Confederate states where there is always a religious explanation for whatever the political establishment will not or cannot explain honestly. Ideology is the major theme, corruption the minor note in what is becoming a culture of catastrophe. Eventually, there will be hysteria as the political elites prove utterly untrustworthy. North Sea drilling conforms to Det Norske Veritas (DNV) standards. But, just as Moody's signs off on whatever Goldman Sachs pays it to, the American Bureau of Shipping (ABS)signed off on Deepwater Horizon and Exxon Valdez. We have no more serious engineering than credit or accounting standards in our clerically-mediated collusive-bargaining regime: Here national or international, military, economic, or food "security" are not being produced by the secretiveness of a propertied and educated, but unpatriotic, elite. The engineering is done by bankers and lawyers. It may be that this spill will never be explained factually, so all sorts of speculation from Galston or lies from Luntz can fill up the vacuum. We do not have a US Attorney in Houston, much less a forensic team. And, when do we recognize that litigation cannot undo the damage of de-regulation? Such humbug just shifts the cost of failure to taxpayers, ratepayers, and the people who vote but do not fund campaigns. So, why will anybody but Tea Part crazies vote this Fall? President Obama does not have a warrant, supoena, or lien on anybody or anything in this incident. The Coast Guard will accept whatever BP offers by way of compensation, and the President will take whatever he is offered in money. He won't even have to bargain over a plea. Congress has already limited the liability of whatever sort of entity might be subject to a judgment. Listening to the terminology being thrown around, it does not sound like anybody responsible for any of this has been the least bit diligent. So, sure, everybody inside the Beltway and from BoWash to Londinium will be looking for a scapegoat. But, they already let the banks steal or destroy a trillion or so and walk away. So, I think that "BP Will Pay" is going to be right up there with "Heckuva Job". The particulars of this incident begin under the Clinton administration with the lease of this block off of Louisiana and end with Tony Hayward and Barack Obama sitting on top of their respective management silos with little capability -- not even competent legal teams -- to more than spin. There may be a lot of Cheney in between, but there may be none. Offshore drilling, like offshore banking, is buried in sedimentary legal obfuscation that benefits both political parties in the US and the UK.
- JRBehrman
May 4, 2010 at 2:05pm
Big Government off lowly Interior Dept employees backs! Let em' get their coke on credit for chirissakes!
- WandreyCer
May 4, 2010 at 4:19pm
janus....I read that fascinating report, too. I wonder if Smith's check bounced? I do have to admit, though, that the original reporting on this scandal made it sound like the whole office was having wild sex and drug parties with agency regulated clients during work time, but the sex and drug part seems to have involved just two people on a few occassions. Granted, she was an employee of his and he was abusing his authority over her, but it didn't have the over-the-top, orgiastic bacchanal narrative that I had in my mind from the previous MSM reports (dammit!). The real scandal was the gross, flagrant conflict-of-interest Smith pursued for his own personal gain using agency resources. I know I keep harping on with the partisanship thing, but, this again points out the whole mindset of permissiveness and coziness with industry that seemed to permeate the entire Bush administration.
- desertdog
May 4, 2010 at 4:25pm
"Sexual relationships......, by definition, cannot be arms-length" Now there's a picture for your mind's eye!
- desertdog
May 4, 2010 at 4:53pm
In 2007, when the dems took control of congress, they could have passed almost anything they wish, almost. In 2009, when Obama took office, the could have passed anything they wish. And Obama issued several exec orders. But for some curious reason, they didnt' change rules around drilling. Why? And in spite of this, you want to blame Bush/Cheney? For rules Obama could have changed but didn't? Own up. Man up.
- seattleeng
May 5, 2010 at 4:31am
Seattle - you just don't give up do you? The post reports that the MMS, not normally a government agency that is viewed as particuarly anti-business, had identified (through a rather rigorous review process) a clear and present danger in offshore drilling and was strongly proposing a counter countermeasure with (what appears to be) a solid track record elsewhere in the world. Then suddenly in 2003 the MMS changes its mind, through a process that is usually referred to as political interference. And this is Obama's fault? Yes the buck stops with him, he is in charge, but your apparent lack of understanding as to the complexity of running the United States is breathtaking. Guess they had nuthin' better to do! Perhaps the Democrats should have just started reversing every bad decision that was made in the preceeding 8 years. And in this case, just like the recent mine tragedy, people are dead, likely because profits came before safety, and so a strong case can be made for that. Should this have received more attention? Probably. Or are you saying that this is an inexcusable oversight on the part of the Democrats because there just simply were no other piles of excremental public policy waiting to be cleaned up? You know, when those planes crashed on 9/11, I was surprised to find out that it was Clinton's fault. Funny how that doesn't apply when the shoe is on the other foot.
- Nari224
May 5, 2010 at 8:01am
What kind of sprezzatura got into Bill Galston's milquetoastish mind and had him post a item accusing our former Vice President of criminal negligence in the BP oil spill? Doesn't he know that Democrats are supposed to stay 1,000 miles away from this kind of stuff if they are ever to win elections anywhere outside Berkelely City Council? Hasn't he been telling us that for, oh, the last 25 years?
- wildboy
May 5, 2010 at 9:08am
If we use Seattle's logic, 9/11 was completely the Bush administration's fault. The Clinton people had nothing to do with it. The security disasters caused by that fiasco was all the GOP's fault. So was invading Iraq on a lie. Man up, own up. See how easy that is? Two can play that game. I can use selective facts and twist them to benefit my argument just as easily.
- tnmats
May 5, 2010 at 9:48am