What's Ahead for Regulation of Deep Water Oil Drilling?
It's been instructive this week to compare how three major English-language newspapers--arguably the three most influential of all--handled the Federal government's report on the Gulf oil disaster. The New York Times, the Wall Street Journal, and the Financial Times each gave the report rather different emphasis and a distinctly different spin on what lies ahead.
The Wall Street Journal offered up a story of modest length at the top of its second page on Wednesday, opening with the finding that "identifiable mistakes" by BP, Halliburton,, and Transocean had led to the catastrophe. The next graf went on to say that "fundamental reform" of offshore oil drilling would be required and that the industry would have to "dramatically" improve safety practices. Inconclusive analysis of the prospects for such reform and self-improvement followed.
The Financial Times gave the Gulf oil story the biggest play, leading with it on the front page and following up on p. 4 with a detailed description of the report and its recommendations. The lead opening sentence said that the report called for a "transformation" of the offshore oil industry's safety and environment practices. A bulleted list of points in the followup opened with the finding that offshore drilling can be done safely in principle and is vital to the United States. Next came the commission's call for a new independent agency to regulate the industry, increased funding for regulators, a self-policing industrial entity like the nuclear industry's INPO, certified blowout prevention technology as a precondition for drilling, a sharp raising of the liability cap for individual drillers, and so on.
The Financial Times quoted commission co-chairman Bob Graham, a former Democratic Party senator from Florida, as saying it was flatly unacceptable that the United States has a weaker system of offshore drilling regulation than countries like Britain and Norway. By implication, the Financial Times seemed to say pretty clearly that the commission's report will have a quite drastic impact on offshore oil drilling practices and costs. Tthe Wall Street Journal's article seemed to suggest as much, though more cautiously
It was the New York Times that was most skeptical about the report's likely impact. Though it too quoted strong statements from Graham and commission co-chairman William K. Reilly, a former administrator of the Environmental Protection Agency, on the need for strong regulatory reform, it also gave prominent attention to mixed signals emanating from the White House--including a statement by President Obama that getting most costly regulation through the new Congress would be a tough sell.
Nobody would compare the president with the legendarily tone-deaf Tony Hayward, BP's deposed chairman (photo, above). But one cannot help but wonder in light of what's at stake whether a slightly pessimistic note is the right way to begin this important political negotiation.
"The report is scathing in it indictment of the industry . . . and of the government," the Times notes, and yet it "undertook its study without benefit of subpoena powers, under a right deadline, and without access to a number of critical components, like the well's failed blowout preventer." But it is not the last word. The three companies all face private law suits that will result in more airing of technical and managerial issues, and the Justice Department is conducting both civil and criminal probes of the companies' leaders.