Soon, Congress will schedule hearings. The people deemed responsible will be raked over the coals on C-Span. Lawmakers will piously declare that we need new and stronger laws and regulations. These usually pass swiftly and with little opposition, often because lawmakers seldom bother to read them or consider the consequences.
The rest of us live with those consequences—higher prices, fewer job opportunities—for years to come. Eventually there’s a new incident, and the process starts over again.
The latest example comes from the Gulf oil spill. While petroleum was still pouring from a damaged well head 42 miles off the coast of Louisiana and 5,000 feet below the surface, lawmakers were already grilling executives from BP, the company responsible for the drilling.
Sen. Jeff Bingaman, D-N.M., chairs the Energy and Natural Resources Committee. “If this is like other catastrophic failures of technological systems in modern history, whether it was the sinking of the Titanic, Three Mile Island, or the loss of the Challenger, we will likely discover that there was a cascade of failures and technical and human and regulatory errors,” he announced.
The most important word in Bingaman’s statement is the first one. “If.” We don’t yet know what caused the blowout on the Deepwater Horizon drilling rig.
Yet that hasn’t stopped lawmakers or opinion shapers from concluding that the appropriate remedy is to lower the regulatory boom even harder on the oil industry. After Interior Secretary Ken Salazar announced that he intends to restructure the federal Minerals Management Service, The New York Times editorial page cheered and called for more.
“We are also waiting to hear Mr. Salazar’s plans for building a robust and impartial regulatory system, one able to ride herd on a large and lucrative industry that cannot be trusted to police itself,” the editors wrote on May 12.
We need to find out what went wrong, of course, and take steps to make sure it can’t happen again. But it’s highly doubtful that heaping more regulations on industry is the only way—much less the best way—to prevent another accident.
Look at it this way: The oil BP has already lost was worth millions. The company will shell out billions to clean up the Gulf, and deal with lawsuits. Its stock price will take a hit, and negative publicity from the incident will haunt the company for decades.
All told, the market will impose a multi-billion dollar price tag on BP. It’s a far stronger punishment than any regulator could impose. And you know other oil companies are paying attention and taking steps to ensure they don’t pay a similar heavy price.
The fact is, extracting oil from the ground and delivering it to buyers is difficult, dangerous work. The United States now imports most of the oil we use, and a good deal of that is shipped by sea. So even if we ended offshore drilling today, the possibility of a marine disaster would remain very real.
We need to develop more on-shore oil fields, including ANWR in Alaska and the shale oil deposits in Colorado. Salazar is dragging his feet on both prospects. These offer our best long-term hope to reduce oil imports. Meanwhile, we need to focus on safety (which, despite the Gulf incident, has vastly improved in recent years) while we keep developing offshore fields.
That’s the best way to break the cycle of dependency on foreign oil, and on over-eager lawmakers and bureaucrats.