Thursday, June 24, 2010

Government data and the oil spill

This seems like kind of a big deal:
BP PLC and other big oil companies based their plans for responding to a big oil spill in the Gulf of Mexico on U.S. government projections that gave very low odds of oil hitting shore, even in the case of a spill much larger than the current one.

The government models, which oil companies are required to use but have not been updated since 2004, assumed that most of the oil would rapidly evaporate or get broken up by waves or weather. In the weeks since the Deepwater Horizon caught fire and sank, real life has proven these models, prepared by the Interior Department's Mineral Management Service, wrong.

...The government's optimistic forecasts reinforced the oil industry's confidence in its spill-prevention technology, leading to decisions that left both oil companies and the government ill-prepared for the disaster that has unfolded in the Gulf since April 20.

...BP has come under heavy fire from Congress and environmental groups for its lack of readiness to handle a worst-case spill. But that criticism has overlooked a key fact: BP was required by federal regulators to base its preparations on Interior Department models that were last updated in 2004.

The government's spill models have been at the center of years of debate among scientists that study oil spills. One study in the late 1990s used satellites to track almost 100 "drifters" set loose in the Gulf of Mexico to mimic floating oil. The paths of the drifting objects were compared with what the model predicted. After 30 days, the average discrepancy was 300 miles. "We have observed differences of some magnitude," a 2003 paper said, summarizing the study.

But the researchers, led by a team of scientists from the Interior Department's MMS, concluded that the results were "neither surprising nor disappointing," and "do not negate the utility" of the model. The scientists said the findings could lead to improvements in oil-spill modeling.
Let's review all of the different ways government screw-ups have contributed to the oil spill mess:
  • A big reason deep-sea oil drilling is taking place is because of vast restrictions on oil drilling in coastal waters. Drilling in shallower waters is safer and less prone to accidents.
  • Regulators, which we are constantly told are all that stand between the public and abuses perpetrated by greedy, evil corporations, were quite literally in bed with those they were charged with regulating. This is the very definition of regulatory capture.
  • Oil companies were required to base their plans for responding to an oil spill on inaccurate government models.
Suffice to say the entire episode hasn't covered BP in glory, but how exactly is this a justification for more government intervention? It seems to me the push for more regulation is best understood as never letting a serious crisis go to waste in the pursuit of one's ideological goals.

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