Tuesday, May 25, 2010

Even more insane than I imagined...

As you'll recall, the agency that overseas safety at offshore drilling facilities, the Minerals Management Service (MMS) (an agency within the US Department of Interior) was structured in such a way as to create a conflict of interests.  In short, its funding came from the operations of the entities it was supposed to oversee from a safety perspective.  If your budget comes from an entity's operations, what are the odds you'll shut it down, even if you're concerned about safety?

This flaw was addressed rapidly as Secretary of the Interior Ken Salazar announced that MMS's collection and safety functions would be separated.

Today's Post contains the strongest evidence to date that the agency's conflict of interests created a situation where this situation was possible.  Amazingly, MMS officials' bonuses were tied to how meeting federal deadlines for leasing offshore oil and gas exploration, according to the Washington Post  Reports of environmental risks triggered reviews that delayed leases according to the story.

In short, the incentives for the individuals with oversight of the safety of offshore drilling facilities were paid based on how fast they could get drilling approvals done.

If this story is ever told in a productive manner it will be one of failed government design as much as anything else.

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