Regulating Extraordinary Disasters into Existence

"The perfect is the enemy of good enough."  One wonders if the big government enthusiasts of the Obama Administration have the gravitas and understanding of nuance to see the irony that government over-regulation played a major role in both of the "Black Swan" (highly improbable) man-caused disasters of the past year.  These are events that are outliers, carry extreme impacts and that we can explain after the fact making them predictable going forward.

The two examples are the BP Macondo well accident in the Gulf of Mexico and the first explosion at the Tokyo Electric Power (Tepco) Fukushima nuclear complex.  Save for an overly cautious response to government regulation, neither incident would have ripened into the disasters they became.  Yet the instinctive response of the government has been greater and more intrusive regulation.  The government regulators display all the necessary elements of Santayana's definition of a regulatory fanatic, someone who redoubles his efforts having forgotten his aim.

The President's Oil Spill Commission concluded that a failed negative pressure test started the chain of events that resulted in the Macondo well blowout.  The key element that confused the operators was a false pressure reading due to clogging of the kill line by lost circulation material contained in the spacer fluid used in the well.  BP pumped that material into the well to comply with a federal regulation.

The Chief Counsel's team found no evidence that anyone in the industry had ever used (or even tested) this type of spacer before, much less that anyone at BP or on the rig had done so. There also appears to be no operational reason BP chose to use the lost circulation material as a spacer.  Rather, according to internal BP emails and the testimony of various witnesses, BP chose to use the lost circulation pills as a spacer in order to avoid having to dispose of the material as hazardous waste pursuant to the Resource Conservation and Recovery Act RCRA).

RCRA regulations would normally have required BP to treat and dispose of the two pills as hazardous waste. But BP and M-I SWACO reasoned that once the two pills had been circulated down through the well as a spacer they could be dumped overboard pursuant to RCRA's exemption for water-based drilling fluids. This is what prompted BP to direct M-I SWACO to use the lost circulation material as a spacer. [emphasis added]

This decision would save BP the cost of shipping the materials back to shore and disposing of them as hazardous waste.  These disposal concerns also led BP to use an unusually large volume of spacer material at Macondo. Typically, 200 barrels of spacer are enough to provide an adequate buffer between mud and seawater. BP chose to pump 454 barrels of its unusual combined spacer fluid at Macondo.

In other words, to prevent a fine for pumping a surplus, water-based fluid containing minerals (e.g. clay) directly overboard, they chose to comply with regulations and first pump it down the well and then overboard, with the Black Swan result of clogging the pressure sensing line.  If the clog had not occurred, the failure of the cement job would have been obvious and could have been remediated by a straightforward "squeeze job."  The chain of events leading to the blowout would have been aborted in the womb.

It gets worse.  The key lesson learned from the Exxon Valdez oil spill was the value of the prompt use of in situ burning.  Yet the Coast Guard Incident Specific Report indicates that as the prime government agency for spill containment, they ultimately deployed only 23,000 feet of fire boom from among the millions of feet of containment boom available.  The effectiveness of the in situ burn strategy was also dependent on the use of "burn agents" to start the fires where fire boom was not available, in a manner similar to the use of kindling or charcoal lighter fluid.  But none was used because the government approved list of burn agents is blank, 20 years after the lesson was "learned."

The over cautious regulatory problem in Japan was due to concerns about releasing even small amounts of radiation into the environment.  The Wall Street Journal has the full story.  Their summary is this:

Japanese nuclear-power companies are so leery of releasing radiation into the atmosphere that their rules call for waiting much longer and obtaining many more sign-offs than U.S. counterparts before venting the potentially dangerous steam that builds up as reactors overheat, a Wall Street Journal inquiry found. [snip]

Following Japan's decision chain, the control-room chief was required to first notify the utility's president, currently Mr. Shimizu, to approve venting. It is unclear when he was notified of the possible need to vent the reactor.

But in a serious nuclear accident, Japanese nuclear-emergency laws kick in, bringing a host of other requirements to consult with the government. At 3 a.m., the minister overseeing the industry regulator convened a press conference to announce the decision to vent. [emphasis added]

Those efforts didn't start until after 10 A.M., regulators say. The valves may be harder to open manually when there is a lot of pressure on them, according to one U.S. industry official with experience working with emergency protocols. Tepco has confirmed it had trouble opening the valves.

The vents were finally opened at around 2:30 p.m., and a pressure drop confirmed. [SNIP]

The subsequent explosion at reactor No. 1 didn't damage the containment vessel but destroyed much of the building itself. Amid the turmoil, Tepco didn't start injecting cooling sea water into the reactor until the evening of March 12 -- a delay that likely led to even greater damage to the reactor core.

The blast may also have damaged other equipment, leading to more leaks and malfunctions. Rubble from the building hindered later rescue efforts.

That initial hydrogen explosion (a chemical, not nuclear reaction) could not have happened if the accumulating hydrogen had been vented in a timely manner, as it was at Three Mile Island more than three decades earlier.  Without that explosion adding to the confusion and dangers, supplying an alternate source of cooling water from the sea would have been a difficult but practical priority.  Cooling the reactors and spent fuel pools would have stopped the cascading chain of problems.  The result would have been an accident closer to Three Mile Island than to Chernobyl as far as the release of radioactive isotopes is concerned.  To reduce radioisotope emissions, the regulations mandating government involvement resulted in a vastly greater release of radiation.

Government regulators seem ill equipped to learn from experience.  But that does not stop them from redoubling their efforts.  How ironic!  Plus ça change, plus c'est la même chose.