Homeland Security Watch

News and analysis of critical issues in homeland security

January 7, 2011

Is the perfect the enemy of the good? New recommendations emerging from the Deepwater Horizon explosion

Filed under: General Homeland Security — by Philip J. Palin on January 7, 2011

Using a marketing technique common to film and books, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling has released a preview chapter.  The full report is forthcoming next week.

It’s a good read: strong narrative, short paragraphs, declarative sentences. Crucial details are reported as in a better-than-average feature story.

In the preview chapter the Commission concludes:

The well blew out because a number of separate risk factors, oversights, and outright mistakes combined to overwhelm the safeguards meant to prevent just such an event from happening. But most of the mistakes and oversights at Macondo can be traced back to a single overarching failure—a failure of management. Better management by BP, Halliburton, and Transocean would almost certainly have prevented the blowout by improving the ability of individuals involved to identify the risks they faced, and to properly evaluate, communicate, and address them. A blowout in deepwater was not a statistical inevitability.

Retrospectively, this is no doubt accurate.  The report does a commendable job setting-out specific decision points, what decisions were made, and the consequences of those decisions.  With compelling evidence and narrative, the report goes on to conclude:

Corporations understandably encourage cost-saving and efficiency. But given the dangers of deepwater drilling, companies involved must have in place strict policies requiring rigorous analysis and proof that less-costly alternatives are in fact equally safe. If BP had any such policies in place, it does not appear that its Macondo team adhered to them.  Unless companies create and enforce such policies, there is simply too great a risk that financial pressures will systematically bias decisionmaking in favor of time- and costsavings. It is also critical that companies implement and maintain a pervasive top-down safety culture… that reward employees and contractors who take action when there is a safety concern even though such action costs the company time and money.

The Commission also criticizes failures of government regulation.  The Minerals Management Service (MMS) of the Department of the Interior is treated almost as a public sector analogue of the private sector’s failure of management.

MMS’s cursory review of the temporary abandonment procedure mirrors BP’s apparent lack of controls governing certain key engineering decisions. Like BP, MMS focused its engineering review on the initial well design, and paid far less attention to key decisions regarding procedures during the drilling of the well. Also like BP, MMS did not assess the full set of risks presented by the temporary abandonment procedure. The limited scope of the regulations is partly to blame. But MMS did not supplement the regulations with the training or the processes that would have provided its permitting official with the guidance and knowledge to make an adequate determination of the procedure’s safety.

I look forward to reading next week’s full report. The preview chapter suggests a well-crafted document that should contribute to greater understanding of this particular event and, perhaps, a range of risks.

I will be especially interested if the full report avoids aspirations to Nirvana. Will it deal with the world as it is, not as we might hope and imagine?  The preview chapter suggests some temptation to deny dukkha.  If so, the Commission would not be alone.

Over forty years ago the distinguished UCLA economist Harold Demsetz offered, “The view that now pervades much public policy economics implicitly presents the relevant choice as between an ideal norm and an existing ‘imperfect’ institutional arrangement. This nirvana approach differs considerably from a comparative institution approach in which the relevant choice is between alternative real institutional arrangements.” (“Information and Efficiency: Another Viewpoint,” Journal of Law and Economics, April 1969)

While I am writing this (on Thursday afternoon) the new House of Representatives is listening to the Constitution being read in its entirety.  The brilliance of the Constitution, it seems to me, is its embrace of human imperfection.  The goal of the Founders was not perfection, but the Good.

In my experience Voltaire was correct, Le mieux est l’ennemi du bien.

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Comment by william R. Cumming

January 7, 2011 @ 9:51 am

The Commision Report looks like it will make a permanent contribution to the knowledge base! But as with all reports of this nature it could have even more impact! Require each Presidential or Congressional Commission to prepare a follow up report 5 or 10 years later.
The 9/11 Commission follow-ups I found very useful to me and others.
Surprisingly much was done on Homeland Security prior to 9/11 and the recommendations of the Hart-Rudman and Gilmore Commissions should be reviewed for their implementation or rejection!
Part of the biggest problem in Washington is lack of any formal or informal institutional memory. In fact the four year cycle of Presidential elections may not be conducive to good governance. Solution? The Loyal Opposition announce by this time next year their top ten candidates and C.V.s for the top 50 appointed positions. The list would not be binding but might help the long delays experienced in the appointment process! After all the Presidential transition may already be starting!
The big issue of reform for both parties this year oddly is not economics or business legislation but Immigration Reform! That one issue could have a huge impact on 2012 elections. No really good studies exist of the impacts for better or worse of illegal immigration on federalism. Now largely left to the Courts some may be quite surprised by the outcomes of judicial review! And perhaps the $12 trillion backdoor financing of the FIRE sector might be wortha hard look. Perhaps Nation-states focus on armed violence by other such units and a force structure to contest with other such units is no longer the essence of national security.

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January 8, 2011 @ 11:47 am

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Comment by William R. Cumming

January 12, 2011 @ 8:25 am

If the Commission report’s recommendations are adopted it will cause a revolution in the Nation’s oversight of the extractive industries.

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