Last week the Connecticut Commission investigating the Kleen Energy plant explosion released its initial findings. Their recommendation (pdf) included establishing regulations on the “gas blow” procedure, in which high-pressure natural gas is blown through pipes to clean them.
Meanwhile, attention in Washington has been understandably fixated on the Minerals Management Service, the federal agency responsible for regulating off-shore oil drilling. As the New York Times reported a month ago: “Federal regulators warned offshore rig operators more than a decade ago that they needed to install backup systems to control the giant undersea valves known as blowout preventers, used to cut off the flow of oil from a well in an emergency.”
Let’s not forget that just before the massive oil leak in the Gulf of Mexico dominated headlines, the talk in Washington was about new regulations on Wall Street, which witnessed its own explosion of sorts a couple of years ago.
Legislation to reform Wall Street appears to be headed to the President’s desk in a matter of weeks. That’s a good thing. The Obama administration is also proposing a badly needed overhaul at the Minerals Management Service. Also a good thing.
But this approach to regulation feels an awful lot like closing the stable door when the horse is already in the next town.
In the case of the Minerals Management Service, it’s clear that the problem stems from what policy wonks call “regulatory capture.” Ordinary people call it letting the fox guard the hen house (yeah, for some reason, farm metaphors spring to mind). Again from the New York Times: “The office’s history of corruption and coziness with the industry it was supposed to regulate had been the subject of years of scathing reports by government auditors, lurid headlines and a score of Congressional hearings.”
It’s easy to see the parallels with the financial services industry, where there is a revolving door between Washington’s hodgepodge of regulatory agencies and Wall Street’s biggest firms. Let’s not forget that the big bank bailout that Republicans and Tea Baggers like to complain about was designed by Henry Paulson, Bush’s Treasury Secretary, whose previous job was CEO of Goldman Sachs, to name just one of the countless examples.
What is a little astonishing is that this the worst environmental disaster in U.S. history, following quickly on the heels of the worst economic calamity in over a generation – both unquestionably aided and abetted by the negligence of regulatory agencies under the influence of big corporations they were supposed to regulate – hasn’t dampened demands for reducing regulations further.
Linda McMahon, who says she wants to “change Washington” calls for reducing regulations on her website, and increasing off-shore drilling. “Review and repeal all mandates that inhibit growth” is one of the planks in her economic platform. I guess I should not be surprised. Professional Wrestling isn’t known for its strict adherence to rules (or even having rules).
In McMahon’s line of work, they’ve always been more interested in the big explosion — but at least those were usually fake.