One of the great spectacles that the world gets to watch periodically is a US congressional hearing. The politicians are in fine form as they do their best to elevate the word “theatrics” to an entirely new level.
The world just witnessed such an episode as BP’s CEO Tony Hayward was put in front of the congressional committee that is “investigating” the oil spill. It goes without saying that BP is not without fault and will be held accountable. As the company has said, it will be there for the long term to see the job through with respect to clean up and addressing the financial obligations that it must honor to those impacted by this incident.
However, what needs a little more discussion is the behavior of Congress. The level of questioning at these types of hearings is often baffling. For example, when Fed Chairman Ben Bernanke appears at congressional hearings, he is often treated to a level of questioning that might be more befitting a kindergarten class. However, as Tony Hayward did this week, Bernanke is somehow able to keep a straight face, keep his cool and answer the questions that are so thoughtlessly put forward.
(BP Chief Executive, Tony Hayward. Photo by Suzanne Plunkett – Reuters)
The point is not to absolve BP or Tony Hayward for whatever the final outcome of the investigations is but rather to note that the very people who are supposed to put together the rules and regulations to safeguard the environment, look after worker safety and ensure that US energy policy is on sound basis do not engender the greatest of confidence.
Members of congress seem more interested in ensuring that they have made a big enough spectacle of themselves that the voters back home get a chance to see their congressional representative “put the boots” to BP or whoever happens to be in the hot seat. It was truly amazing to see Tony Hayward, who is perhaps the most disliked man in America, come out of the hearing looking arguably better than the congressional inquisitors. Some of the media coverage after the hearings was even sympathetic to Hayward.
One of the great fears of this tragedy should be whether or not politics will trump common sense and rationality. It is clear that business cannot go back to usual – the lessons from this crisis need to be taken into account so that a crisis like this can be avoided to the full extent possible in the future. But it should be noted that more and more drilling in future will have to take place at depths that are going to challenge existing technology – or even the limits of technological innovation.
It is now coming to light that the US Minerals Management Service (MMS) has had only 60 inspectors to cover the 4000 (approximately) drilling and other sites in the Gulf of Mexico and by the government’s own admission these individuals are often not trained properly.
It is also now well known that the relationship between MMS and the energy industry has been perhaps “too cozy”. In fact, the Interior Acting Inspector General Mary Kendall said last month that “…individuals involved in the fraternizing and gift exchange – both government and industry – have often known one another since childhood”.
Should the members of the committee questioning Tony Hayward not have been aware of this prior to this accident and could they have regulated offshore drilling better? After all, they badgered Hayward for not knowing what individual decisions were being made at a well in the Gulf of Mexico. As CEO, he can accept responsibility for the decision that might be found to be the root cause of the spill – but what good that really does is not quite clear. After all, it is doubtful that a member of Congress or the President might be too eager to accept responsibility for the consequences of a bad decision of a military commander or a government employee.
Can the members of Congress or the President accept responsibility for the alleged corruption and understaffing of the MMS? Recall, it was only a short time before this accident that the President had just proposed expanding offshore drilling in the name of energy independence. Therefore, it seems odd to have embarked on this expansion at a time when the MMS was not even doing an adequate job with existing drilling sites.
Perhaps no other aspect to this crisis bodes as ill for the notion of rationality triumphing over knee jerk policy making as the ban on offshore drilling. The thinking is that these drill rigs will not simply sit and wait for the ban to be lifted. They are already being shopped to other parts of the world where they will be under contract again – putting the US goal of weaning itself off of foreign oil out of reach once again.
Every US president since Richard Nixon has pounded the podium and made eloquent speeches advocating reduced dependence on foreign oil – but action has never followed. Many members of Congress would surely be surprised to learn that the largest source of foreign oil is Canada.
There are many questions that need to be answered as a result of this accident before final conclusions can be reached and better regulations put forward. The fear is that politics will once again trump sound judgment and the real issues will still not be dealt with. As Rep. Henry Waxman accused Tony Hayward “of kicking the can down the road” the same can be said for US lawmakers with respect to coming up with a national energy policy.
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