Rachel Maddow tonight discussed reports that BP's application to the US government for a drilling permit basically said there was a zero percent chance of a spill having any effect on the land 48 miles away. If you have the time to watch the story (13:43), it's worth a listen to at least the first four minutes. But for now, let me excerpt a few remarks.
First, she quoted the application for a permit:
“... 14.2.3.2 Wetlands ... due to the distance to shore (48 miles) and ... the response capabilities that would be implemented, no significant adverse impacts [on the wetlands] are expected...”
She then went on to analyze it this way:
That's what BP said. And the government took their word for it and gave them the permit to drill. That's how easy it is to get a drilling permit. You say it. The government believes it. No questions asked. Welcome to America.
...
BP could have told the government anything and they still would have been approved to drill that well. That's how seriously they took this drilling application process. That's how seriously they took the possibility of a spill. ... But perhaps the most significant revelation is that they did not take seriously: safety. Or the possibility of having to mount a cleanup effort—ever. And because the government regulation of the oil industry has been so lax for so many years, BP never had to take that seriously. ...
Now here's what I'm wondering. Pure speculation, mind you...
What if they didn't just not care? What if they deliberately misrepresented? What if it's not the case that they didn't just fail to take this seriously because they didn't think it would happen? What if taking it seriously would have drawn attention to the fact that there was risk? What if having any materially interesting plan for fixing things would have caused someone to ask “why are you planning for something that will never happen?” What if they didn't want someone to pay too much attention to the risk for fear they wouldn't get the approval? And so what if they specifically didn't put in a safety plan because having a safety plan might have kept them from getting approved?
Now, certainly, I think you have to partly blame the regulators. Obama said he would fire BP CEO Tony Hayward. Well, speaking of firing someone, what about the person who accepted a zero in the risk box for spill on an oil drilling application? That should never have happened, we can be sure of that.
I really do fear deliberate fraud, not negligence, on the part of BP, though it would take a lot of digging to get evidence one way or the other. Certainly investigators should explore the possibility. What I fear is that BP somehow knew that these regulators would feel calmer about seeing a report saying there was no safety plan than about seeing a plan that felt a safety plan was needed. If so, that has to be fixed. And if not, it has to be fixed anyway, because it could still happen in the future.
We should have regulations that absolutely require you to list every substantive problem that similar endeavors have ever encountered and offer credible contingency plans for each of them. They should penalize you with a fixed delay time (let's say “one year”) to go back and “think harder” if you ever submit an application that even hints that a problem that has historically happened before has zero chance of recurring or needs no substantive plan of action in case it does recur. A claim of zero risk? That's not just unacceptable. It shows dangerous incompetence on the part of the applicant to suggest such a view of the situation, and it shows incompetence on the part of the regulatory agencies to let stuff like that go through.
Here's the relevant portion of the video:
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Comments
I may be oversimplifying things, but it seems beyond ridiculous that they couldn't have foreseen that this might happen. I think most reasonable people would assume that BP woud have had a safety plan in place to deal with an occurence such as this.
As always, rated for your wonderful and informative writing.
Yeah, as long as you're a big corporation, and oh yeah, it helps if you give big contributions to political campaigns. ~nodding~
Try that as just a peon citizen, and see what happens!! There'll be hundreds of pounds of forms you will need to fill out, lots of red tape, etc. etc. etc.
I'm not sure if BP lack of a safety plan was accidental or planned, I know it was a stupid part on the government. I mean, you have the means to drill at these depths, and you're telling me, you have no way to stop things when "situations" arise as happened almost 2 months ago?
Awesome. F*cking awesome!!!!
I just can't believe that we put our trust and our voices in the hands and mouths of these people(aka elected officials!!), and it just amazes me that the seem shocked when stuff like this makes the poop float to the top. "Oh my, did that really happen!?"
~shakes head, rates and Tink Picks this~
Now I fear that with their stock at half value and the cost of remediation soaring that they'll just fold and leave the mess.
As with most everything the government has their hands in, we end up with stuff like this happening.
Can only wonder if somehow, collectively, we have all allowed this disaster to happen? I love that Rachel has the wit and wisdom and courage to ask hard questions and look for evidence to support her points. Have there been earlier Rachels working for BP and/or the government or whatever agencies involved in oversight over the years who have dared to ask those questions when they might have been addressed to avoid something like this who were silenced? Don't know how we could know now but there is blame in many places and the real cost will be paid by everyone who claims at least to love the beauty of the planet we inhabit for what have we managed to lose?
Tink, as I noted in my recent post about Libertarianism, there's something to be learned here from the financial disaster. To quote one of the quotes from that piece, “Ben walked around with some very tiny fraction of his mind alert to the probabilities of disasters in real life. People underestimated these too, he believed, because they didn’t want to think about them.”
Trig, if they are left to continue business as usual, I think the American people, if not the people of the world, may finally act. I don't think because we've suddenly gained a brain. But rather because it's suddenly hitting home, and it will continue to hit our pocketbooks and disturb our routine. Until now, these things have been largely theoretical. This spill could destroy the entire livelihood of several states and small countries. That will be hard to not notice.
Bleue, thanks for the words of support. :)
Fay, glad to provide you a forum where you can speculate in comfort. I don't know about the State vs. Federal theory but I'll mull it awhile. I personally think their strategy is to hope that the dispersant will make it hard to notice it's anywhere. I don't think that's working, but I think it's what they're banking on. Still, I'm not the source of authority here, I'm just the host of a discussion.
The problem with developing SPECIFIC plans is that effective response to disasters requires broad capabilities and flexibility to adjust plans in accordance with current conditions. As soon as you develop an oil spill plan with steps 1 - 100 in order, something comes up that means steps 25 - 100 are inappropriate and something else needs to be developed. Guaranteed.
Some of the principles of good planning -
1. Make sure everyone knows their role and responsibilities. We may not know exactly what to do beforehand, but we need to know what types of decisions will be necessary (i.e. which types of containment devices to use) and who is responsible for making the decisions when the time comes (a joint command, a director, etc). This is especially important when jurisdiction is an issue - and in the Gulf, jurisdiction is a HUGE issue. Federal, State, local, international private corporation...
2. All planning must start with a hazard and risk assessment. Throughout, planners must consider two different factors: (1) how likely is the disaster to occur (the Deepwater Horizon scenario, as it has played out, was VERY unlikely), (2) how severe is the event (this is a catastrophic scenario). So its the least likely event, but with the worst consequences. The next step is to assess vulnerability - how will the disaster affect people/property/the environment? Who is most vulnerable to this disaster? We know that aquatic life is hugely threatened, coastal communities are at risk, and entire industries (fishing, tourism) have been devastated. The combination of these assessments (for all possible hazards) is how planning priorities are established - we identify those things that are the "worst" and dedicate most of our efforts to them. Some states plan for hurricanes, others for blizzards - it doesn't make sense for everyone to extensively plan for everything because we don't share the same risks and vulnerabilities.
3. Although we use scenarios to focus our planning efforts (giving us assumptions and details to help understand what we're aiming for), we use these only to identify the CAPABILITIES that are required for effective response. We don't focus on what caused the disaster - we plan for the expected consequences. For all of the hazards facing BP, they should have noticed a theme - nearly all of them have the potential to cause an oil spill in the Gulf! So while we could spend all day talking about how to prevent underwater explosions and fixing backflow valves, the most important planning is ensuring that BP can respond to oil spills into the Gulf. A similar example - since we can't fully predict (or in any way prevent) tornados, we just need to know what is likely to happen - high winds will destroy buildings and people will be injured/killed in damaged buildings. Search and rescue teams will be needed and hospitals will be dealing with injuries/trauma from debris. The same could be said for a terrorist attack - the need for search & rescue teams and hospitals prepared for traumatic injuries from damaged buildings. So "all-hazards" response focuses on building capabilities to deal with expected and predictable consequences from a wide variety of disasters. Same for BP - regardless of what triggered the explosion, they should have known to prepare for oil spill response.
The safety conditions on the Deepwater Horizon are the responsibility of BP as a regulated entity. Much like chemical plants and manufacturing plants, there are basic safety standards and requirements for how activities are conducted. Once an accident happens, different agencies are responsible for mitigating the consequences and organizing response efforts. Central to all of this, BP has primary responsibility for effective planning for its operations - whether you take the cynical view (i.e. effective planning is best for shareholders who are now dealing with declining stock prices) or the ethical view (i.e. preventing environmental catastrophe in the Gulf). Not having a specific plan for this disaster isn't a failing, but having a lack of understanding, ability, and planning for even the most predictable requirements IS a huge failing.
Its a simple understanding of motivation - do we really think that regulated agencies are generally going to do more than what is expected? Especially if that comes at huge expense? That's why we have government regulation - we know that the "tragedy of the commons" is what occurs when people aren't forced to take responsibility for their impact to others.
Regulatory agencies in this case have failed as well - not necessarily because they didn't care, but because we have failed to equip them with the right powers, capabilities, and leeway to implement the rules to make them fully effective.
So we gave away our commons (valuable minerals owned by the citizens of the US) to a foreign company for nothing more than the chance they may employ a few people. And yet it turned out they hired 2 other foreign companies to do the work on the rig and drill the well. All of this while claiming that no real problems could be expected due to the distance from land. Incredible.
If there ever was the reason for a special prosecutor, this is it. Because what we can expect if the govt investigates itself is a few low level flunkies who may have signed off on the application will lose their jobs, BP will pay a large fine which they will cover with tax credits and production from other US wells that they dont pay royalties on and 11 men will still be dead.
LibMom, regarding profits, I've written already about the issue of “legal sociopaths”; at some level it's no surprise companies are like this since they are required by law to be. But if we can make it unprofitable enough for them to do this, which is hard for a company so fabulously profitable but could be done, their fiduciary duty could be interpreted as a mandate to avoid hurting the environment.
Firestorm, BP is the industry leader in OSHA violations, so I think you're wrong that the evidence doesn't show evidence of willfully trying to work around safety issues.
anna, I don't know how to answer your questions. Maybe no one does. I personally am not even worried about the beauty of the planet just now. I'm worried about the food supply of the planet. If it falters, expect that to manifest as riots and wars in a kind of domino effect. This might cause it or might not. But it brings us closer for sure. And it's not like we're not doing anything else in the world that can add to the problems.
I'm so angry and scared, really. I think that the handshake, good old boy thing in ALL corporate transactions leads to disaster. That's how the economy collapsed. And now it's finger pointing at a bunch of golfers who make deals behind closed doors.
This is not a well reasoned comment - I'm just so sick about the information that is spewing out - worse than they feared, no way to stop it. The religious fanatics are calling for armageddon, and suddenly I'm listening. Not because of their wingnut version of Christianity - but because I feel like I am bearing witness to this planet's destruction. Of course, the planet can heal. But human beings are going to suffer, greatly.
Two huge reasons not to have a contingency plan is that when you have no plan to follow, you can fail to mobilize workers and materials which is a real money saver. Any contingency plan would have also included a plan for communicaton at all levels and that would have made it harder for BP to control the message.
It's a win-win-win for them.
Ardee, same thing almost addresses your point. By deliberate negligence, I'm wondering not just about “saving money by being spartan” but “spending money to be spartan.” Like someone saying, “No, I don't want to see a detailed plan like that. Take it out. There's no chance that will happen, so I don't want plans in evidence. ”
If you have watched Rachel, you know that this all has happened before (70s). Oil leaks out, it is burned, they use chemicals, they use topkill, junk shot, etc. (but called the with different names). None of these works well or reliably. They knew it then and they know it now.
You might ask why oil companies haven't invested in finding technologies that work? The surprising answer is that there is such a safety plan and all experts agree that it works, but it costs serious money.
It's called relief well.
Relief well is reliable safety measure. Just drill relief well before the accident happens. Everybody in the business knows this.
You might be interested to know that at the same time this accident is ongoing, BP is lobbying Canadian regulators to drop a requirement that companies operating in the Arctic had to drill relief wells in the same season as the primary well.
I would make the analogy to a car. There are probably a lot of ways the brakes can fail. Mechanical failure, brake fluid, general wear, etc. But the basic concept of a car is that it's a gigantic hurling thing and while you can't really solve all of its problems, a redundant on-board “emergency brake” just makes sense to address the big problem in the way that at least makes sense. It still won't stop you from hydroplaning, so maybe an on-board parachute would be good, but instead we have airbags, which are sort of the personal equivalent of same, turning the problem inside out. Now back to our oil well, I'm sure it has a zillion working parts. But at some level it's a long tube through the ground with oil under pressure coming up and a history of sometimes that happening in an uncontrolled way. I think it's not too much to ask for a kind of, pardon the grim term, “dead man's switch.&rdquote;
I keep saying that a ring of explosive charges not to blow the thing up but to create an instantaneous pressure from all sides to crimp the pipe in an emergency would have been much easier to build than a relief well, and if built in from the beginning could have been launched at any time. Maybe that's not exactly the right thing, but I don't have the training or money that BP does. So they can start with that and work with it. But they can't tell me it's rocket science to predict the top ten bad things that could happen especially when it's known they have happened. If you believe recent news and blogs, there is more than one case (perhaps several) going on now.
So as soon as you get to identifying this using the “no one could think of everything” paradigm, I'm afraid my eyes are glazing over with disbelief... or maybe I'm reading you wrong when you say “Not having a specific plan for this disaster isn't a failing, but having a lack of understanding, ability, and planning for even the most predictable requirements IS a huge failing.” I think not having a specific plan for this disaster, assuming this disaster is correctly characterized as “something mechanical failed and oil is pouring out” is in fact a failing. If you overly narrowly characterize this as “this failure of this particular piece” then no, I agree no specific plan is needed but mainly because there is an overarching general plan to cover... At the highest level, “how do we shut the thing down” is a must and they didn't have that other than “hope our finely crafted machines will be able to work reliably.”
I do agree with some of the middle part of what you wrote, by the way, just mainly not the bookend characterizations, which I think are too generous and leave too much wiggle room. I think it would help a lot if things with big environmental impact required posting the risk analysis for public review and then responding to public comments. If that eats away at the multi-billion profit for some quarter (and I doubt it would make a dent), then too bad.
To summarize: Due diligence isn't about preparing for every issue, it's about preparing for the ones that any reasonable person on the street could think of. If you played Family Feud and just said "Oil [BLANK]", I'm quite sure "Spill" would have a high number of people responding. So I think omitting coverage of that is a failing.
Let's assume that the probability of this accident happening to BP during long time investors time horizon (~40 years) is 0.5%. BP's market capitalization without accident is $200B and after the accident it's $0B. Rational investor would calculate that expected market capitalization of BP is (1-0.5%)*$200B = $199B without safety measures.
If BP market cap can be increased by more than $1B by skipping expensive safety measures (like relief well drilled beforehand) risk is worth taking for rational investor.
All my numbers are inaccurate, but I think it's not relevant for the discussion. I would not be surprised if BP and other oil companies use actuaries for calculating risks they are willing to take.
Jane, I didn't say incompetence. I think they're highly competent. I just don't think the game at which they are highly competent is the one we want them playing. I agree with you there's surely graft in there as one of the components. I sense you and I (and many other rational people looking on) are on the same page here.
aim, I didn't think your point was that incoherent, actually. It seemed to make a point, even if an emotional one. Emotions do have a place here.
o'steph, yes, that's what I meant in responding to Jane about where their competency lies. Their competent at what we've incentivized rather than at what we want (and probably have not incentivized).