Oil spill reveals the dangers of success

[Celebration]

http://www.washingtonpost.com/wp-dyn/content/article/2010/06/06/AR2010060602925.html

An intriguing aspect of the BP oil spill is that, before the accident, deepwater drilling seemed to be a technological triumph. About 80 percent of the Gulf of Mexico's recent oil production has come from deepwater operations, defined as water depths exceeding 1,000 feet. In 1996, that was 20 percent. Jack-up rigs, which are oil platforms on stilts in a few hundred feet of water, have given way to the "mobile offshore drilling unit" (MODU). It keeps its position through the interaction of global positioning satellites and on-board engines that activate directional propellers to offset ocean currents and wind.

Seismology and submersible robotic technology have also advanced. The Deepwater Horizon rig was not testing new limits. It was drilling in about 5,000 feet of water when others have approached 10,000 feet. The safety record was good. The American Petroleum Institute, the industry's main trade group, says that since 1947, oil companies have drilled more than 42,000 wells in the Gulf of Mexico and recovered about 16.5 billion barrels of oil. Against that, spills totaled about 176,000 barrels from 1969 to 2007. In a typical year, it was a few hundred barrels. By contrast, recent production is about 1.6 million barrels a day.

Cost-cutting by BP, careless rig operators and lax regulators have all been fingered as plausible culprits in the blowout. President Obama has appointed a commission to investigate the causes, and the Justice Department has launched a criminal investigation. There will be extensive analyses. But the stark contrast between the disaster's magnitude and the previous safety record points to another perverse possibility: The success of deepwater drilling led to failure. It sowed overconfidence. Continuing achievements obscured the dangers.

This pattern applies to other national setbacks. Consider the financial crisis. It was not the inherent complexity of subprime mortgages or collateralized debt obligations (CDOs) that caused the crisis. It was the willingness of presumably sophisticated investors to hold these securities while ignoring the complexity and underlying risks. But this behavior was understandable at the time.

I rarely post in this forum. This oped really says it all.