Oil Industry Won't Play Along With Palin Risk Study

The oil industry is refusing to cooperate with Palin’s Alaska Risk Assessment, according to project managers and documents. This is an arrogant and troubling stance that puts Alaska’s landmark risk study on the brink of failing before it even gets started. 

A little background. The Alaska Risk Assessment is Sarah Palin’s answer to the rash of corrosion-caused oil spills and the 2006 Prudhoe Bay shutdown. Frank Murkowski had quickly put in place a new agency that would regulate the oilfield. Palin stepped back from the regulatory stance, and initiated a cooperative, scientific venture instead. It is premised on a comprehensive survey of oilfield infrastructure, gathering input of all stakeholders, analyzing that data objectively, then churning out hard numbers of risks to guide future decisions.

You might have thought industry would appreciate the favor of being freed from actual regulations. Having seen the slick oil company ads, you might have thought they’d be anxious to brag about their accomplishments, show everybody just how careful they really are.

You would be wrong. While other stakeholders stepped up to the plate and offered input, industry has refused to play along. The comment deadline came and went, with not a breath of industry feedback. Today they remain locked in argument over obscure points about “trade secrets” and “confidential” information. I suspect oil company lawyers are racking up the billable hours, but even giving them the benefit of the doubt, those legal concerns couldn’t possibly explain the lack of any input.

I see a couple possible explanations for this behavior.

First, maybe industry’s traditional secrecy takes over even when there is no rational reason. Habit trumps thinking. If Exxon asked BP what time it was, they’d have to first run the response through an army of lawyers. This stance does not serve industry’s interests, only their lawyers'. 

A second, more sinister, explanation is that industry is deliberately sabotaging the Palin effort. Without industry cooperation, the risk study fails. The State would then be forced to either give up, or enact stricter laws and regulations requiring industry to share what they know. This kind of bullying has worked for them before.

Whatever the reason, the result is bad for all of us. Infrastructure continues to corrode, trust among stakeholders continues to erode, the State continues to waste money, and oil companies spend their efforts on lawyers, not engineers.

The lesson in all this, it seems to me, is that voluntary cooperation and self-regulation doesn’t work because the oil industry is not a good-faith partner. They just aren't good neighbors. They only do what they HAVE to, not a bit more. Effective management of Alaska's oil infrastructure, then, requires stringent regulation, with strong penalties for non-compliance.

No more Mr. Nice Guy.