Thursday, September 16, 2010

Threat to Capitalism Warning Notice: Regulatory Overkill Again


No sooner had I begun to relax than I read of another manifest danger.  No, it's not ill-conceived regulations of the financial sector as one concerned bank CEO calls them.

It's regulatory overkill for offshore drilling.

In today's FT the Lex column thundered:
Regulatory overkill after BP's drilling accident has understandably soured the mood.
I've boldfaced two words from the quote.  A "drilling accident".  Sounds benign.  A company dedicated to "best practice" and with a highly environmentally friendly logo is drilling and for some unexplained reason there's an accident.  Probably not their fault at all.  Hard to see what all the fuss is about.

On the front page of the FT in an article hysterically titled "BP Cited for Safety Lapses on North Sea", I did learn that the newspaper had filed a request under the UK's Freedom of Information Act and learned that:
"All but one of BP's five North Sea installations inspected in 2009 were cited for failure to comply with emergency regulations on oil spills, raising questions about the company's ability to manage a disaster in the area."
Now some of you cynics out there might use this information to criticize the good folks at BP.  You might say the instead of describing the Gulf of Mexico as an accident, this bit of information suggests criminal negligence.

I for one look at this last bit of news with a less condemning eye.
  1. If there's an accident here, it's likely relating to the one out of the five wells in the North Sea.  BP has a pretty consistent record.  Besides preparation for disasters is a waste of shareholder funds, because in well managed operations disasters never occur.
  2. BP's disaster management abilities (or lack thereof) have been pretty well demonstrated and documented.  There's really no need to raised questions now to which we already have the answer.  The information obtained by the FT is therefore not explosive (at least in a news worthy sense).  
It's high time that pointy-headed bureaucrats in Washington and in London get off the back of the financial and oil industries.

They've demonstrated a remarkable rhetorical capacity for imaginary self-regulation.  It's time to end regulatory overkill.  Next thing you know there could be crackpot schemes for food or mining safety!  All this could wind up killing our very way of life.  That is, of course, if you're able to continue living after an economic and environmental collapse, assuming you didn't die from food poisoning first.

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