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Golden Gate University Environmental Law Journal

Abstract

In learning from the BP disaster, there are two levels at which to understand what happened, and two kinds of lessons to draw: straightforward and complex. The straightforward lesson focuses on BP as a distinct entity, emphasizing the company’s culpability for its poor decisions. The complex lesson does not deny BP’s culpability but seeks to situate BP’s private actions within a broader regulatory context in order to identify systemic failures that contributed to the disaster.

This Article delves into both sets of lessons, concentrating more on the “complex” explanation, which involves recognizing gaps in the statutory scheme and conflicts in agency incentives. Part II begins with a retrospective of the scope and scale of the worst environmental crisis in U.S. history. It then explores the simple explanation for the disaster, situating BP’s environmental and safety record against industry norms and practices, and contrasting BP’s actions with the corporate ethos described in their “beyond petroleum” ad campaign.

Part III focuses on the complex explanation, identifying some of the regulatory dysfunctions that contributed to the disaster. While acknowledging that poor private decisionmaking was the central and primary cause of the Macondo blowout, this Part focuses on the regulatory and institutional structures that allowed the situation to unfold and details the points at which different regulatory choices might have fruitfully constrained or redirected private activities. It sketches out a widespread regulatory failure. In particular, this Part focuses on the Outer Continental Shelf Lands Act (OCSLA) permitting process, and the National Environmental Policy Act (NEPA) environmental analyses that are supposed to be required by that process. It details how structural aspects of the OCSLA, as well as cultural norms within the agency and regulated community, virtually assured that these processes would dwindle into mere paper-pushing exercises. Further, it suggests that these flaws had been obvious to critics for some time, in many ways making BP’s Gulf oil spill a wholly predictable disaster.

Having connected the dots between the various statutory and regulatory regimes that should have prevented this disaster, Part IV of the Article takes a more meta-perspective in order to identify some overarching structural inadequacies in regulatory oversight of private risk management decisions. It focuses on an often-overlooked aspect of the regulatory capture problem—the implicit privatization that occurs when an industry’s voluntary standards are adopted as regulatory standards. Finally, the Article ends by drawing some lessons for developing better regulation going forward, both for offshore drilling and environmental assessment more generally.

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