A Risky Business: Generation of Nuclear Power and Deepwater Drilling for Offshore Oil and Gas
Government regulation and licensing of industrial activities that create the possibility of catastrophic risk reflect “a political value judgment that these activities provide a social benefit that is greater than the social cost of the risks that they cause.” However, when a catastrophic accident occurs, the cost-benefit evaluations underlying the value judgment that authorized the activity may need to be rethought. Social rethinking is especially warranted when the accident could have been prevented had either the industry or the government more seriously assessed the risk of a catastrophic event and implemented precautionary steps to avoid it. This was the conclusion reached by the President's Oil Spill Commission with respect to the Deepwater Horizon drilling rig accident in April 2010, which killed eleven platform workers, injured seventeen more, discharged nearly five million barrels of oil into the Gulf of Mexico, devastated the area's economy and environment, and to date has cost hundreds of millions of dollars to clean up. Because the Deepwater Horizon debacle was not the first serious accident at an offshore drilling rig in recent memory, these failures in oversight are surprising. For reasons this Article will explore, the companies that engage in offshore drilling for oil and gas, and the agencies that regulate them, assess the risk of an operational accident as very low, despite the fact that serious well blowouts are not infrequent events. That assessment affects both the stringency of regulatory oversight and the precautionary steps a company takes to guard against the occurrence of accidents.