Ron Amundson’s Political Blog

Desire and Finance always win out over safety, even when it comes to regulation… well, unless of course those on the safety side of things have more money or desire at stake. It doesnt seem to matter whether its oil, bio, transportation, or even ones own personal choices, desire is an incredible motivator. It may be time, it may be money, power, jobs, politics… but desire wins. Well, at least it wins over safety in the short term; statistics and physics are always the ultimate winners.

This plays out in nearly every risk/benefit decision made, whether it be the purchase of a family car. Ie do you buy a clone of Cadillac One or a used Hyundai? Obviously the chances of an encountering an IED, or a sniper in a family car are low, so armor plating and bulletproof glass would be overkill. Yet, an encounter with an out of control semi is much much greater in the Hyundai than Cadillac One, or even spinning out of control on ice, but such events are virtually never considered when it comes to car buying.

It plays out in the regulatory arena too…. case in point, the experience requirements for being an airline pilot make great financial sense, from a hiring perspective. However, when the chips are down…. not so well, case in point Colgan 3407, where in both pilots had thousands of hours, said hours were not of the quality needed to prevent the tragic loss of life.

A similar deal in oil regulation, ie if multiple relief wells were required for deep water drilling, oil companies would make less money, there would be less profit, less taxes to government, and ultimately higher consumer costs and fewer jobs. On the other hand, we (the taxpayers) will likely have $50billion+ to pay in cleanup costs, society will have untold amounts of human suffering, and the environment in some areas may take generations to recover, due to extended time needed to drill them now. Even now… one relief well is being drilled, one is on hold… and what if both fail? We then start on well #3 in September?

Future blog posts, which will be hotlinked as I get to them

Justification due to Operating in Deficiency Mode

Money is Almost Always Available After the Fact

Changes in Safety are Usually Short Lived

Second Guessing will Haunt many for Years

Can anything be done?

some background bits
from http://www.theoildrum.com/node/6524#comment-633217

Judgement calls

from Rockman

IF I suddenly thought I could use the RW BOP to deal with the leak and IF I felt the other RW was doing OK I would delatch and move to the blow out. And my two prime motives: to do the BOP move as fast as possible and to pinch pennies. I’m VP Operations and there are times when I make such decisions on an almost daily basis. And sometimes I make decisions based on a minimal (but never zero) risk vs. costs. I don’t always take the most expensive route to minimize risk. So yes, there are times when I accept a certain risk to the environment, the rig and the lives of the hands working for me as well as myself. As yes, I’m still on crutches after my double knee surgery so I would always be the last one to get away from a rig if something goes wrong. It’s a judgment call. No different than when everyone here bought his or her last car. Did you spend the most money possible for the safest car available? No in most cases. Then you must value your money more than your life or the lives of your loved ones. Right? More than 30 years ago I had to help the company carry off the body of a dead floor hand in a tarp. As I said once before I can still easy remember how that tarp felt in my hands. I’ve never made a decision that hurt a hand let alone killed one. Right now I’ve the ultimate authority in my drilling ops…anything goes wrong…someone gets hurt or killed…it’s on me…no one else. So I make those judgment calls. And monetary considerations will always be a factor. But when I make those calls I literally always ask myself that one question last: is saving money going to cause any “real” increased risk? Each one of has to decide how we define “real”.

Scale of Consequences

from greenish

In choosing a car for one’s family, one weighs risks and costs. When choosing a car for the president, likewise. That’s why I have a beat-up Hyundai Accent and the president travels in a car-shaped tank within a convoy with traffic shut down. Because the scale of consequence is different.

from Rockman

greenish — A little friendly picking on you: so the life of the president is more important than that of you and your loved ones? So you’re willing to save a little money to not maximize their safety?

There really isn’t a proper answer to my question. But those decisions are made every day. Do you cancel every flight out of NYC because there’s a bad thunder storm predicted? I would offer that killing 300 folks in an airplane crash is as significant, if not more so, as the POTUS being killed in an auto accident. Heck… that’s why we have vice-presidents.

It’s all about choices. A bad choice is always a bad choice even if it doesn’t cause an accident. It appears the folks at BP made a bad choice and it bit them hard. But sometimes the proper choice can kill you too. But do you base your choices on the magnitude of a worse case scenario? I fully understand your “scale of consequence”. Killing your baby in a car accident would be considered a rather significant conseqence of scale by most IMHO.

What I offered earlier wasn’t as much a justification for anyone’s judgment calls. Just laying out how it works in the oil patch (as well as the rest of life IMHO).

Real Moral Hazard

from pbnj

One issue though that petroleum industry (and any industry that could mess up the environment) must deal with that my industry doesn’t have to.. is moral hazard. If I misjudge risk, it messes up my customers and my own company. If Petroleum industry misjudges risk and screws up (or nuke, or coal, or chemical or etc) then the mistake messes up OUR world and our raw natural resources. This places petroleum industry in a position not well suited to corporations because they must be stewards of shared resources as well as for-profit corporations. Some of that stewardship may be offloaded to government agencies, but regardless, the performer (the oil industry) still must work in good faith with the agencies. That is a tough position that I am glad that I am not in. Unfortunately the government (enforcer of stewardship) only really has one or two hammers against a misbehaving actor. Nationalization (nuclear option) and regulation/fines. So I ask you (in this philosophical discussion) do you think that the “corporation” concept is appropriate for an organization that has such a high moral hazard?