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You are here: Home / Economics / Free Markets Solve Everything / Bad Company, Bad Regulator

Bad Company, Bad Regulator

by @heymistermix.com|  May 6, 20108:07 am| 37 Comments

This post is in: Free Markets Solve Everything

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The Minerals Management Service (MMS), which regulates offshore oil rigs, gave BP a big old pass:

A rule change two years ago by the federal agency that regulates offshore oil rigs allowed BP to avoid filing a plan specifically for handling a major spill from an uncontrolled blowout at its Deepwater Horizon project – exactly the kind of disaster now unfolding in the Gulf of Mexico.

If “MMS” rings a bell, perhaps this is why:

In 2008, the Interior Department took disciplinary action against eight MMS employees who accepted lavish gifts, partied and – in some cases – had sex with employees from the energy companies they regulated. An investigation cited a “culture of substance abuse and promiscuity” involving employees in the agency’s Denver office.

MMS workers were given upgraded ethics training.

Maybe this catastrophe will merit a sternly-worded letter, or a serious talking-to.

Also, too, the industry knew about big problems with blowout preventers years ago.

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Previous Post: « Bad Company, Good Regulator
Next Post: Lindsay Graham: Let Terrorists Have Guns, Not Miranda Rights »

Reader Interactions

37Comments

  1. 1.

    Linda Featheringill

    May 6, 2010 at 8:18 am

    Ohhhhh. THAT MMS.

    Yes. Who could forget? Gave depth and meaning to the cute little phrase of “being in bed with” people you are supposed to be regulating.

    And now we and the Gulf are paying dearly for their failure to proceed with intelligence and prudence.

    Are we going to have to pay this much for all of the other stuff that the don’t-regulate-business jerks did?

    Not fair. Sigh.

  2. 2.

    Svensker

    May 6, 2010 at 8:20 am

    Grrrr. That is all.

  3. 3.

    geg6

    May 6, 2010 at 8:22 am

    We will live with the fallout from W for the next fifty years. At least.

    I could just kill people who voted for that fuck.

  4. 4.

    Cat Lady

    May 6, 2010 at 8:25 am

    Heckuva job Bushie!

  5. 5.

    AhabTRuler

    May 6, 2010 at 8:28 am

    Well, guess the industry wasn’t wrong when they said that adding the acoustic switch wouldn’t help. Why spend $500k on a backup switch for equpment that probably won’t work anyway?

    Assholes.

  6. 6.

    Ash Can

    May 6, 2010 at 8:32 am

    SSDD. There was no fucking way anyone who was a part of the Bush clusterfuck was going to do anything remotely regulatory regarding the energy industry.

    I’m just glad the WaPo is reporting on this. I love Obama, but I do think he needs a kick in the slats on the whole issue of offshore drilling and its regulation. Hopefully this MMS shit will help.

  7. 7.

    ChrisS

    May 6, 2010 at 8:32 am

    But but but Obama took $70,000, somehow, in campaign donations from BP and Mary Landrieu took money from them as well.

    It’s funny the number of rightwingers suddenly concerned with how much influence big oil has on the US government, but when Cheney invited, INVITED, them to write the rules … silence.

  8. 8.

    Matt

    May 6, 2010 at 8:37 am

    Remember the “burrowing” of Bush loyalists within the federal government after the election? I wonder how much of that is in play right now.

  9. 9.

    rickstersherpa

    May 6, 2010 at 8:37 am

    Jack Tapper and the Washington Post, showing that when it is a conflict between real reporting (going out and working the phones and e-mails to talking individuals in the Minieral Management Service and BP about the whole process of granting oil leases and NEPA exceptions) versus planting a good meme of Obama hypocrisy and corruption, choose planting the meme! I would note that in April 2009, besides Secretary Salazar, I doubt that there were very many political appointees in the Department of the Interior given the Republican policy of obstruction and holds to hamstring the Administration. It is like the Bush-Cheney administration never happen.

    “White House press secretary Robert Gibbs today called “silly and ridiculous” any idea that the Obama administration granted BP an exemption to drill for oil in the Gulf of Mexico because of campaign contributions from BP and its employees.

    Yesterday the Washington Post reported that in April 2009 the Department of the Interior’s Minerals Management Service granted BP’s lease at Deepwater Horizon a “categorical exclusion” from a detailed environmental impact analysis under the National Environmental Policy Act.

    The Center for Responsive Politics noted last week that candidates for federal office have received more than $3.5 million from BP and its employees in the past 20 years. CRP reported that the “top recipient of BP-related donations during the 2008 cycle was President Barack Obama himself, who collected $71,000.”

    Asked his response to anyone wondering about any possible connection between the campaign cash and the regulatory exemption, Gibbs said “I would say that’s silly and ridiculous.”

    -jpt

    UPDATE: Some adminsitration officials got in touch with me about this blog post, to note that the process of BP having received an exclusion under the National Environmental Policy Act “is more complicated than the Post story” made it seem.

    “There are a lot of layers in the NEPA review process,” one administration official said, pointing out that it’s a five year process that began for BP in 2004.

    In 2004 and 2007 most of the decisions were made regarding the federal government granting the “categorical exclusion.”

    Then, the official said, “somebody buried deep in MMS made a determination in 2009 that this particular well could qualify for what was already an established routine action.”

    Officials from the president’s Council on Environmental Quality believe that these categorical exclusions may be granted too readily, so in February 2010 they informed agencies “that they need to review how we’re issuing categorical exclusions. That guidance is currently out for comment.”

  10. 10.

    Brian J

    May 6, 2010 at 8:44 am

    Speaking rather broadly, cost-benefit analysis seems like a fairly good way of deciding which regulations are worth it. And perhaps, after a thorough review, a lot of the ones on the books aren’t in fact worth having because of the inefficiency they bring. But can anyone really make that case in regards to fuel production, processing, and shipping? Exactly how would the increased costs associated with taking whatever precautions were necessary to lower the risk of a catastrophe like this from happening be so much higher than the cost of the clean up?

    Anyone who isn’t verging on accepting anarchy as a political system has a lot of answering to do.

  11. 11.

    Omnes Omnibus

    May 6, 2010 at 8:58 am

    @Brian J: I think I am about ready to accept the consequences of over-regulating industry for a little while. Let’s see how that turns out.

  12. 12.

    Maude

    May 6, 2010 at 8:59 am

    @Brian J:
    They believe that a spill will never happen. That’s the problem.

  13. 13.

    SGEW

    May 6, 2010 at 9:01 am

    I had a sudden vision yesterday, a possible portent: Dick Cheney will be indicted for his “energy task force” conflicts of interest, and not for war crimes. Like nabbing Capone for tax fraud.

    Works for me.

  14. 14.

    mistermix

    May 6, 2010 at 9:02 am

    @rickstersherpa: Hmm, the story I linked (which was an AP story reprinted in the Post), says:

    Oil rig operators generally are required to submit a detailed “blowout scenario.” But the federal Minerals Management Service issued a notice in 2008 that exempted some drilling projects in the Gulf under certain conditions.

  15. 15.

    WereBear (itouch)

    May 6, 2010 at 9:03 am

    I guess the “cost of over regulating” is the new marching order spat from Luntz’s fax tree. There was a
    new troll taking it for a spin yesterday.

    Show me. Then we’ll talk.

  16. 16.

    aimai

    May 6, 2010 at 9:04 am

    Maude,
    Actually, they believe that they will never suffer from the consequences of a spill of major proportions. And, to a certain extent, that’s true. Because there’s no there, there, in a large corporation. Capital punishment for Corporate heads when the damages their company has caused go over, oh, lets say 50 million dollars. Your average shoplifter spends more time in prison over 5 dollars worth of cigarettes than Corporate CEO’s spend after literally killing 11 people and destroying the livlihood and environment of millions more.

    aimai

  17. 17.

    Comrade Javamanphil

    May 6, 2010 at 9:06 am

    @rickstersherpa: White House Press Corps Barbie says “Journalism is hard!”

  18. 18.

    Mike in NC

    May 6, 2010 at 9:10 am

    MMS workers were given upgraded ethics training.

    Oh, no! Death by PowerPoint!

  19. 19.

    Mike

    May 6, 2010 at 9:11 am

    “upgraded ethics training” has great meme potential.

  20. 20.

    SGEW

    May 6, 2010 at 9:31 am

    @Mike:

    “upgraded ethics training” has great meme potential.

    I propose that we apply “Enhanced Ethics Training Techniques” to these people.

  21. 21.

    Michael

    May 6, 2010 at 9:43 am

    @geg6:

    We will live with the fallout from W for the next fifty years. At least.
    …
    I could just kill people who voted for that fuck.

    All I can do is to say I’m sorry. I really am. Had I known in 2004 what became evident in 2005, I’d have at least split my culpability.

  22. 22.

    Perfect Tommy

    May 6, 2010 at 9:51 am

    Here are the toxicity data for the chemicals being used to disperse the oil. For those not versed in ecotoxicology, LC50 is the concentration of the chemical in water that is lethal to 50% of the animals exposed to it, “Menidia” are the silversides (spearing) that are commonly used for bait and “Mysidopsis” are small shrimp.

    National Contingency Plan Product Schedule Toxicity and Effectiveness Summaries

  23. 23.

    russell

    May 6, 2010 at 10:00 am

    MMS workers were given upgraded ethics training.

    In China, official corruption at that level often earns you a bullet in the head.

    For good or ill, we don’t roll that way, but why the f**k can’t we fire them?

    “Upgraded ethics training” is warm spit.

  24. 24.

    geg6

    May 6, 2010 at 10:11 am

    @Michael:

    Well, at least you have admitted your mistake and promise to do better in the future rather than doubling down as so many (witness the Teabagger Brigade) have.

    But I have to say that I’ll never understand why people couldn’t see it back in 1999/2000. It was totally obvious to me exactly what he would lead to (not the specifics, but definitely the fact that we’d be a disaster area by the time he was kicked to the curb). I was never in any doubt.

    I just don’t get how anyone who has and a uses a single functioning neuron couldn’t see it, too. And I never really will, I’m sorry to say. It’s my own personal prejudice.

  25. 25.

    Michael

    May 6, 2010 at 10:15 am

    @geg6:

    But I have to say that I’ll never understand why people couldn’t see it back in 1999/2000. It was totally obvious to me exactly what he would lead to (not the specifics, but definitely the fact that we’d be a disaster area by the time he was kicked to the curb). I was never in any doubt.

    I was a Limbaugh listener and a FReeper back then, constantly reaffirming my own political biases.

  26. 26.

    Bill H

    May 6, 2010 at 10:16 am

    McClatchey used to be a pretty thorough and penetrating news organization, but that is just a bunch allegations of unspecified failures against unnamed companies. What has been the nature of the failures and how do they relate to this particular failure? McClatchey used to be a lot better than this. Here they got one piece of information and wrote the article without doing any followup investigation whatever to find out how that article related to today’s news.

  27. 27.

    celticdragonchick

    May 6, 2010 at 10:21 am

    It is actually possible I could go on to work at the Mineral Management Service, although the USGS would be my preference. I don’t think the oil companies would really like me at the MMS…

  28. 28.

    geg6

    May 6, 2010 at 10:26 am

    @Michael:

    Although so many bad things have happened since, I will never forget the dark, deep, hopeless level of despair I felt with the Bush v. Gore SCOTUS decision (or even the dread I felt when they granted cert). It may well have been the worst moment of my life, including the days my parents died.

    I went home from work every day for a month and cried for an hour or two before I could get on with the rest of my life.

    And then it went on for eight more years.

  29. 29.

    Gregory

    May 6, 2010 at 10:41 am

    @Omnes Omnibus:

    I think I am about ready to accept the consequences of over-regulating industry for a little

    Seconded.

  30. 30.

    PeakVT

    May 6, 2010 at 10:44 am

    The MMS, like the SEC and the BIA, is one of those agencies that is so broken it ought to be disbanded and reconstituted as an entirely new agency.

  31. 31.

    Zuzu's Petals

    May 6, 2010 at 10:44 am

    @ChrisS:

    But but but Obama took $70,000, somehow, in campaign donations from BP

    To be fair, those were individual contributions from people who identified BP as their employer:

    WaPo

  32. 32.

    salacious crumb

    May 6, 2010 at 10:52 am

    blowout preventers?

    maybe the people at MMS were confusing the word blowout with some other activity?

  33. 33.

    Zuzu's Petals

    May 6, 2010 at 10:55 am

    From Pro Publica:

    We spoke with two people involved in the industry, who have also worked with MMS, who said that the branch of MMS that deals with safety inspections has a solid reputation, unlike the scandal-ridden part that deals with collecting royalties from oil companies. …………
    ……………………………………………………………………….
    “They have a lot of good people doing their best,” said Tyler Priest, a professor at the University of Houston. Priest said he sits on an MMS advisory committee and has done studies for the agency. “I’ve seen what they do up close, and it is a quality organization.”

  34. 34.

    Zuzu's Petals

    May 6, 2010 at 11:01 am

    @geg6:

    I actually flew from California to DC and stood in the freezing sleet for hours just so I could hold up my “SHAME” sign when the limo passed on Inauguration day.

    At the end of the day, I went and hung my banner in front of the USSC.

  35. 35.

    Hob

    May 6, 2010 at 11:04 am

    @Bill H: What are you talking about? Are we reading the same McClatchy article? The one mistermix linked to is not about “allegations of unspecified failures against unnamed companies.” It’s describing a 2003 report in which Transocean was talking to other companies in the field about a type of problem they were all familiar with– advising them to give better specs to the manufacturers of failsafe devices, and saying basically “it’s natural to want to get everything back on line as soon as possible, but analyzing the failures would save money in the end.” There’s no reason for such a report to list names and dates of particular incidents. The point is that Transocean itself was clearly aware of these issues, and even made a point of telling all their competitors about them.

  36. 36.

    skippy

    May 6, 2010 at 12:17 pm

    it really is cheney’s chernobyl.

  37. 37.

    Linda Featheringill

    May 6, 2010 at 12:58 pm

    @Perfect Tommy: Dispersants:

    Quote from nola dot com:

    Soap-like dispersants applied to the water surface are working well to break down some of the oil, Rainey said. Seven aircraft are applying the dispersants, with additional aircraft acting as spotters.

    nola.com/politics/index.ssf/2010/05/bp_exec_says_gulf_oil_spill_re.html

    Soap-like? How? In that they break up the complex oils into short-chain thingies? Unbelievable. It sounds so benign.

    Besides, soap wouldn’t work in the ocean. There are too many dissolved minerals in the water. You would need detergents for that.

    Remember, the people that bathe animals caught in the oil don’t use Ivory soap. They use detergents.

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