Friday, November 19, 2010

BP and the Minerals Management Service

This New York Times article talks about a recent report compiled by a committee of experts within the National Academy of Engineers. The report puts blame not only on BP for the gulf coast oil spill, but also on the Minerals Management Service. The Minerals Management Service was the federal agency in charge of monitoring offshore drilling. Since the spill the agency has been dismantled and replaced by the Bureau of Ocean Energy Managment. The article says that there were insufficient checks and balances for the decisions made at BP and the committee found that "the minerals agency had failed to put in place the oversight that could have helped prevent the blast, as well as procedures that could have saved lives." Our recent study of bureaucracy identifies two different camps that address the relationship between government agencies, Congress, and the resulting inefficiency in bureaucracy. First, we can consider that the bureau was acting autonomously and decisions they made were insulated from both Congress, and from American citizens. They had no incentives to put in extra monitoring effort of BP and as long as nothing terrible was happening, everyone was content with the results. Alternatively, we can consider the congressional dominance model and would then need to place blame on BP, on the Minerals Management Service, and also on Congress. This model asserts that agencies are controlled by incentives and rules put in place by Congress. In this case, this kind of analysis would assume Congress either put limits on the investigatory power of the Minerals Agency and/or did not provide incentives for the agency to provide sufficient oversight. If the congressmen essentially controlling the Minerals Agency are elected by voters who support big business and receive campaign contributions from BP and other big oil companies this view definitely makes sense and would then extend blame for the oil spill to Congress as well.

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