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Sex, Lies and Oil Spills is about the Bush administration’s deregulation of the oil industry and–particularly–removing the requirement for an acoustical regulator, a sort of dead-man’s switch that probably would have prevented the huge oil spill in the Gulf of Mexico.

Acoustic switches are required by law for all offshore rigs off Brazil and in Norway’s North Sea operations. BP uses the devise voluntarily in Britain’s North Sea and elsewhere in the world as do other big players like Holland’s Shell and France’s Total. In 2000, the Minerals Management Service while weighing a comprehensive rulemaking for drilling safety, deemed the acoustic mechanism “essential” and proposed to mandate the mechanism on all gulf rigs.Then, between January and March of 2001, incoming Vice President Dick Cheney conducted secret meetings with over 100 oil industry officials allowing them to draft a wish list of industry demands to be implemented by the oil friendly administration. Cheney also used that time to re-staff the Minerals Management Service with oil industry toadies including a cabal of his Wyoming carbon cronies. In 2003, newly reconstituted Minerals Management Service genuflected to the oil cartel by recommending the removal of the proposed requirement for acoustic switches. The Minerals Management Service’s 2003 study concluded that “acoustic systems are not recommended because they tend to be very costly.”

The trigger costs about 500,000 USD. The cost, even multiplied by all the rigs in the gulf, will probably not come close to the costs–both to business and the environment–of the big spill.  

Then Vice President Dick Cheney is accused of restaffing the Minerals Management Service with oil industry cronies who were wined and dined (and more) by industry execs, leading to illegal contracts and corrupt acceptance of compromised scientific studies.

The Inspector General characterized this orgy of wheeling and dealing as “a culture of ethical failure” that cost taxpayers millions in royalty fees and produced reams of bad science to justify unregulated deep water drilling in the gulf.

Halliburton is suspect in all of this too, because–

The blow out occurred shortly after Halliburton completed an operation to reinforce drilling hole casing with concrete slurry. This is a sensitive process that, according to government experts, can trigger catastrophic blowouts if not performed attentively. According to the Minerals Management Service, 18 of 39 blowouts in the Gulf of Mexico since 1996 were attributed to poor workmanship injecting cement around the metal pipe.

The deregulation encouraged by Bush and Cheney have left a lasting impression of irresponsible action in both industry and the financial world. History books will not be kind.

I used to teach a course that required reading The Tyranny of the Status Quo. Milton Friedman made the claim there that government regulation of industry was not required because unsafe production is bad for business and managers will naturally reject unsafe practice. Otherwise a fan of Friedman, I was happy to read that, late in life, Friedman changed his mind about that, perhaps faced with overwhelming evidence that the drive for profit often overwhelms the risk of long term costs.

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