Over at Legal Planet, friend of Cyclingprof Holly Doremus has an interesting post surmising that the National Environmental Policy Act (NEPA) might have helped to avoid the massive oil spill that is now threatening environmental catastrophe off the Gulf Coast. Under NEPA, federal executive-branch agencies must prepare Environmental Impact Statements (EISs) before engaging in activities, including approving offshore oil-drilling projects, that are likely to have significant environmental impacts. As originally interpreted by the President's Council on Environmental Quality (CEQ), EISs had to incorporate so-called "worst case analyses" in case of complete failures of systems designed to prevent, for example, large oil spills.
As Holly notes, the CEQ abandoned "worst case analysis" during the Reagan Administration in favor of a less onerous requirement that federal agencies consider only "reasonably foreseeable" environmental impacts, including low-probability but high-magnitude impacts “provided that the analysis of the impacts is supported by credible scientific evidence, is not based on pure conjecture, and is within the rule of reason.” Just how much of a difference this makes in any case, or the specific case of the Deepwater Horizon Oil Spill, is difficult to ascertain. At the very least, it provides oil companies with the ability to claim that certain accidents are too speculative, not reasonably foreseeable, or based on pure conjecture.
But for the abandonment of the worst-case analysis, Holly surmises, the oil spill might have been averted because, instead of being persuaded by British Petroleum (BP), the operator of the oil rig, that a catastrophic spill was not reasonably foreseeble (see here), the US Department of Interior would have been forced to confront that potentiality, and might have required the installation of a remote back-up shut-off switch, which is state-of-the-art and required for all off-shore rigs in places like Brazil and Norway (see here). BP did not install them voluntarily. In fact, it fought recommended safety measures (see here), which the federal government unfortunately did not mandate.
It is, of course, speculative to suggest that a worst-case analysis would have led the government to require BP to install back-up safety systems. One cannot prove a counterfactual. But we know for sure that, in the absence of such an analysis, or any other regulatory imposition on BP, that the oil company was perfectly willing to impose non-trivial probabilities of immense environmental harm simply to avoid the expense of investing in state-of-the-art safety equipment.
Moreover, the Deepwater Horizon Oil Spill is only the latest reminder that worst-case scenarios do tend to occur every so often. Remember the Exxon Valdiz (1989), the Amoco Cadiz (1978), the Burmah Agate (1979) oil spills (among others) (see here)? The added cost of performing a worst-case analysis in all EISs can be easily covered by the prevention of a single, large-scale environmental catastrophe. This presumes, of course, that the US Department of Interior would actually use a NEPA worst-case analysis to impose additional conditions on an oil-drilling permit; and that presumption may not always be correct. After all, NEPA itself does not require the government or a government permittee to do anything other than to "consider" environmental impacts. Nevertheless, an EIS that includes a worst-case analysis is more likely to result in additional safety measures being imposed than an EIS that does not include one. For that reason, I support Holly's call for CEQ to reintroduce a worst-case analysis requirement into its NEPA regulations.
Alternatively, I would support new, substantive legislation that requires oil companies to install or retrofit state-of-the-art safety equipment on all off-shore (and on-shore, for that matter) drilling rigs, a la Brazil and Norway.