The Corner

Feds Downplayed Risk of Deepwater Horizon Spill

The federal bureaucrats in charge of regulating BP’s Gulf of Mexico rigs badly underestimated the potential size and scope of a serious spill:

The Interior Department exempted BP’s calamitous Gulf of Mexico drilling operation from a detailed environmental impact analysis last year, according to government documents, after three reviews of the area concluded that a massive oil spill was unlikely.

The decision by the department’s Minerals Management Service (MMS) to give BP’s lease at Deepwater Horizon a “categorical exclusion” from the National Environmental Policy Act (NEPA) on April 6, 2009 — and BP’s lobbying efforts just 11 days before the explosion to expand those exemptions — show that neither federal regulators nor the company anticipated an accident of the scale of the one unfolding in the gulf.

[. . .]

While the MMS assessed the environmental impact of drilling in the central and western Gulf of Mexico on three occasions in 2007 — including a specific evaluation of BP’s Lease 206 at Deepwater Horizon — in each case it played down the prospect of a major blowout.

In one assessment, the agency estimated that “a large oil spill” from a platform would not exceed a total of 1,500 barrels and that a “deepwater spill,” occurring “offshore of the inner Continental shelf,” would not reach the coast. In another assessment, it defined the most likely large spill as totaling 4,600 barrels and forecast that it would largely dissipate within 10 days and would be unlikely to make landfall.

“They never did an analysis that took into account what turns out to be the very real possibility of a serious spill,” said Holly Doremus, a law professor at the University of California at Berkeley who has reviewed the documents.

I wouldn’t get too revved up about the waiving of the impact studies though, the point of which ( to report “what could reduce a project’s environmental impact”) seems not actuarial but cosmetic. The fact that Interior annually grants between 250 and 400 of these waivers just for Gulf projects suggests that even the regulators find this added layer of bureaucracy of limited usefulness. 

UPDATE: In somewhat good news, the Coast Guard reports that BP has managed to cap one of the three deep-water leaks in the Gulf. Unfortunately, on its own, the plug will not reduce the overall flow of oil into the sea.

UPDATE II: This reader gets it right, by my estimation:

The Gulf oil spill reminds me of the financial collapse.  Again we see that it is not the regulations that is a problem but the regulators — the flawed, fallen humans that man the bureaucracies.  There is a natural limit to what regulations, and government, can do — us.  As always, humility would be the appropriate response, but instead we’ll get instead Washington hubris.

Bruce Hall

Iloilo City, the Philippines

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