EIN News says, "Shell's President Odum Calls to Ramp Up Oil Federal Regulators Shell Oil President Marvin Odum says the federal government's oil and gas regulators are understaffed, singing a similar tune to another Big Oil executive last week. (nationaljournal.com)".
More regulators? This borders on insanity! But, can two big oil executives be insane simultaneously? Unlikely. Let's take a look at their reasoning.
The reference article gives a more complete picture. Shell's Odum and Chevron's John Watson are trying to address the problem that new drilling permits are very slow in coming. They are presumably judging that increasing the federal staff will also increase the speed at which the permits will be issued. This is a reasonable supposition. While it is not insane, it certainly is naïve.
CEOs of major corporations have one thing in common. They are unusually adept in outmaneuvering their competitors within organizations for the top jobs. This means they have talent and experience in out-negotiating other highly intelligent contenders. It also means that they have little knowledge of how their organizations really work, in spite of the fact that they lead the organizations.
In industry and in government, the top boss has a philosophy of how his business should operate. Underlings quickly understand and conform to that philosophy for the purpose of improving their own careers. In the case of the Interior Department, Pres. Obama through Ken Salazar is the top boss. They have the philosophy that the US should reduce its dependence on foreign oil, not by developing local oil resources, but rather switching to renewable energy, such as wind and solar. To promote renewable energy, they take every opportunity to limit production of US oil, a portion of which program involves minimizing issuance of new drilling permits. The most effective way to do that is to micromanage all aspects of a drilling permit, which then requires additional time and ultimate delay in its issuance.
Because Odum and Watson do not understand that process, they assume that throwing more federal people at the drilling permit issuing problem will lead to increased speed at which drilling permits are issued. Wrong, wrong, wrong!
A simple fact of life is that if you want to speed up issuance of a permit, one must take a more cursory look at the permit and eliminate investigation of many of the minor details. This is not to say that we ignore major aspects, such as environmental considerations, but it would not be necessary to include the pay scale and qualifications of a person required for spill cleanup. That could all be covered by a general liability clause, which says that if you have a spill, you are required to clean it up within a certain period of time to the satisfaction of existing federal regulators and bearing all costs. Arguments among drillers, federal regulators, the general public and organizations thereof can be resolved in federal court. It is not necessary to foresee all eventualities on how to avoid going to court.
Odom and Watson need to look at the big picture. Increasing the staff of the federal federal regulators will only establish an opportunity for government to investigate more miniscule details on permit applications, which in the long run will further delay permit issuance. What is needed is a change in policy at the top levels of government (Obama/Salazar), and that is what Odum and Watson should be fighting for.
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