Posts Tagged ‘regulation’

Weighing Risk, and Justice

Author: Gary Hart

In the second half of the 20th century major technologies, mostly having to do with energy production, emerged.  These included offshore oil drilling platforms, giant tanker transportation, and nuclear power plants.  Almost all energy production facilities, such as hydroelectric dams, tar sands, experimentation with oil shale, coal production, and so forth, also got much bigger.  Economies of scale was the usual justification.  If you are going to the trouble of drilling a mile or more down in the ocean or building a nuclear reactor, you got more bang for the buck by doing it on a grand scale.

Chernobyl and Three Mile Island, and now Deepwater Horizon, showed that with high production comes high risk.  High risk ventures such as these in the U.S. are licensed by the United States government.  Certain standards have to be met to obtain both a construction and an operating license for a nuclear power plant.  Presumably, some standards of safety and efficiency are also required for an offshore drilling permit.  British Petroleum had a five-story tall “fail-safe” apparatus on the ocean floor to prevent a well blow out.  It failed.

The U.S., and possibly all advanced nations in the world, require a public policy that authorizes high-risk ventures, ones whose failure produces catastrophe, only after very serious requirements are met: every system that might fail must be clearly identified; every system to respond to failure must be thoroughly tested and demonstrated; every technical and human response to failure and catastrophe must be drilled, tested, and proven; every operator must maintain highly-skilled emergency response teams at every facility around the clock; all levels of government emergency response must be integrated, drilled, and ready (including emergency evacuation of civilians); the costs of catastrophic failure must be included in the public record; a large emergency response fund must be maintained by the operator (that is to say, every operator must be self-insured); well-trained government monitors must be at every high-risk facility around the clock and have instant communications access to emergency response teams and senior government officials; and licenses to construct and operate these massive facilities must be signed by cabinet-level officials who personally assume responsibility in cases of catastrophic failure.

This final measure would certainly sober up those, including “drill, baby, drill” politicians, who might have their names on the line.  Right now we do not know what officials in the U.S. government finally authorized Deepwater Horizon, what safety measures its drilling permits required, what tests of the “fail-safe” apparatus were conducted, what plans, if any, BP and government agencies had for catastrophic response, and a host of other questions.

The alternative, of course, is to accept the risks of major failures, more Deepwater Horizons, as the way the world works.  Stuff happens.  Public memory is short.  Rare brown pelicans are expendable.  Gas in our tanks is not.  Gulf fishermen are on their own.  Besides, offshore drilling, massive coal extraction, and nuclear power plants create jobs.  Get rid of government, eliminate regulations, let free markets work, accept risk, forget catastrophies.  What are a few Deepwater Horizons in the great scheme of modern life.

The arc of the moral compass bends toward justice.

It is universally acknowledged that the United States is a capitalist economic system embedded in a democratic republic political system. When both system function smoothly, few question this arrangement.

But when one system or the other malfunctions, fingers are pointed and blamed is shifted…all according to one’s ideological beliefs. Take the British Petroleum/Gulf of Mexico oil spill for instance. The people of Louisiana and the vehicle drivers of the nation were happy to have the oil the offshore facilities produced. Jobs were created in Louisiana and the rest of us had gas for our cars. Both assumed the operator, British Petroleum, knew what it was doing and that the appropriate agencies of the U.S. government were regulating its behavior.

Problems arose, however, when BP’s “fail safe” system failed. Turns out it didn’t know what it was doing. And regulators in both the Bush and Obama administrations weren’t paying enough attention. Now the “free market” disciples are blaming the government, and the critics of corporate excess are blaming BP. The purpose here is not to join one side or the other (though both entities and both systems failed), but rather to encourage both warring sides to consider a new model.

Anyone who takes the trouble to read American history knows that, left to their own devices, corporate interest more often that not put profits ahead of the public interest. (Consider not only British Petroleum but also the operators of the West Virginia coal mine.) Likewise, the same history tells us that, when government relaxes its protection of the public interest and the common good, whether out of lassitude or belief that government should not reign in excessive corporate excess, bad things happen.

A mature society, one that understood both history and human nature, would reach a thoughtful balance that permits private corporate interests to drive economic growth, and make a reasonable profit, under conditions where the public interest, the common good, and the interests of future generations and nature were represented by well-trained, alert, dedicated, disinterested (that is to say, not regulators drawn from the industries they are sworn to regulate), and knowledgeable government officials made fail safe systems work.

This is not an impossible dream. It is how reasonable people behave. It is how a mature nation, which the United States of America should be by now, acts. It is the very least the people of the United States should expect from both corporate interests and their own government.