Offshore Oil Regulation: Attitudes and Platitudes

The words "Be my guest," can mean different things, depending on the attitude and demeanor of the speaker.  If a host at a party says those words sincerely to invite an honored guest to open the first bottle of wine, they mean something encouraging and affirming.  But if two co-workers are discussing which one of them should go in and deliver bad news to a cranky boss, and one of them says to the other, "Be my guest" as a way of copping out, the words are meant ironically, to say the least.  So the meaning of a platitude or cliché like "Be my guest," can depend on a person's intent, and can't be discerned simply by a written record of the words spoken.  The same thing can be true of laws and regulations.

Offshore oil drilling and production can be dangerous and even deadly, as the 2010 Deepwater Horizon accident and subsequent months-long oil spill proved.  Leases of permits to drill by the U. S. federal government are made with the understanding that companies drilling and producing oil offshore (primarily in the Gulf of Mexico these days) will follow government regulations about safety and environmental protection.  Following the Deepwater Horizon spill, the Obama administration temporarily froze all drilling activities and then tightened regulations on the industry.  Work continued under those conditions, but the knowledge that the folks in charge in Washington were basically opposed to the oil and gas businesses was discouraging to those involved in them, to say the least.

A number of things have changed since 2010.  New drilling methods have forced energy prices down to about half of their former level, leading to a big decline in the drilling of new wells.  But those same new methods of enhanced extraction can be applied to existing offshore rigs, though with added difficulty, and so much of the oil and gas action in the Gulf now pertains to the aging inventory of existing rigs, some of which have stood in the water for decades. 

New York Times reporter Eric Lipton recently wrote a long profile of the industry and its fight to have some of the newer regulations modified—a fight that is showing signs of success, from the producers' point of view.  The reason that the tide has turned in the regulatory environment is, of course, the advent of the Trump administration, and the new top safety official at the Interior Department, Scott Angelle, is a good part of the reason why.

Lipton describes Angelle's political background, the main features of which are a stint as lieutenant governor of Louisiana and as a booster of the oil and gas industry, sometimes on the payroll of such companies, although he has now reportedly divested himself of any oil- and gas-related holdings.  Angelle has spent much of his time since joining the Interior Department meeting with production company representatives to see what can be done to increase production while still meeting safety requirements.

In contrast to the optimism of Angelle and the workers Lipton interviewed who are looking forward to a relief from burdensome regulations and a listless business environment, is the dark view of environmental groups and defenders of workers rights such as Lillian Espinoza-Galla, who is described as a former oil worker and is now an industry safety consultant.  It is her words which provided Lipton with his headline:  "These regulations were written with human blood." 

A chronic problem faced by those who wish to regulate any technically advanced industry is the fact that the same people who typically know the most about the industry also benefit from it financially—either directly by working in it, or indirectly by studying it or consulting for it.  And here we come up against the attitude problem again.

There are some people who can both believe in the fundamentally benign nature of an enterprise and also see how it needs to be regulated and controlled by a third party—usually the government.  I suspect Mr. Angelle may be one of these people—I hope so, anyway.  The problem that can always arise is that in paying attention to the requests of companies that want to do a dangerous thing to make money, regulators will ignore or neglect the safety and environmental "externalities"—things that workers and the rest of the world will end up paying for if something goes wrong.  This happened in a big way with the Deepwater Horizon, and Lipton describes the indifferent to poor safety track records of several of the companies that are operating older offshore rigs today.

On the other hand, there are those who believe in their heart of hearts that an entire industry should simply be wiped off the face of the earth.  When people like this are put in charge of regulating that same industry, the industry sometimes has to fight for its life, as the offshore oil business did after all offshore drilling was shut down for a few months following Deepwater Horizon.  Given the complex and inertia-laden nature of regulations, the regulatory environment can't turn on a dime.  But just as important as what the regulations are at a given time is the intent and spirit behind them. 

I see this kind of thing even in my own profession of teaching.  If an indifferent student gets encouragement from a teacher who conveys that she believes he can do better than he's doing, he sometimes surprises even himself by doing just that.  On the other hand, a teacher who decides that some students simply won't achieve anything, and conveys that message to them, well, that discouraging teacher is going to get exactly what she expects:  namely little or nothing from those students, even if the same objective teaching material comes from both types of teachers.

I am no regulatory expert, and the question of whether the changes proposed by Angelle and his Trump-administration cohorts with regard to offshore fossil-fuel activities will lead to more accidents and spills is one that I am not qualified to judge.  Maybe they will, and that would be too bad.  But at this point, what is already clear is that the attitudes in Washington toward that business have changed for the better, and there is a feeling of optimism in the Louisiana oil patch that even New York Times reporters can't ignore.  And that much seems to be a good thing.

Sources:  Eric Lipton's article headlined "Trump Rollbacks Target
Offshore Rules ‘Written With Human Blood’" appeared on Mar. 11, 2018 online at https://www.nytimes.com/2018/03/10/business/offshore-drilling-trump-administration.html.  I also referred to the Wikipedia website on the Deepwater Horizon accident.