Tag: gulf of mexico

Meet the New Minerals Management Service

In a move reminiscent of the George W. Bush administration, the Obama administration is cracking down on the Minerals Management Service…by changing the agency’s name.

The MMS has fallen into disrepute because, well, as E&ENews PM put it, “employees accepted gifts from oil and gas companies, participated in ‘a culture of substance abuse and promiscuity,’ and considered themselves exempt from federal ethics rules.”  The “drug and sex abuse [occurred] both inside the program and ‘in consort with industry.’ “  The New York Times reports that MMS employees “viewed pornography at work and even considered themselves part of industry.”  Yet this government agency somehow failed to prevent the oil spill in the Gulf of Mexico.

So the Obama administration is giving MMS a makeover.  The agency formerly known as the Minerals Management Service will hereafter be known as the Bureau of Ocean Energy Management, Regulation, and Enforcement.

That’s exactly how the Bush administration dealt with the unpopularity of the Health Care Financing Administration, the agency responsible for Medicare and Medicaid: by changing its name to the Centers for Medicare & Medicaid Services.  With candor and humor – two scarce commodities in such circles – Bush’s HCFA/CMS administrator Tom Scully explained the rationale:

The health care market … is extremely muted and extremely screwed up and it’s largely because of my agency. For those of you who don’t follow CMS, which used to be called HCFA, we changed the name because it was so well loved. I always say it’s kind of like when Enron comes out of bankruptcy, they’ll probably change their name. So, HCFA—Secretary Thompson and I decided to confuse everybody. We changed the name to CMS for a couple of years so people wouldn’t realize we’re actually HCFA. So far, it’s worked reasonably well.

For more on the pervasive cozy relationship between big business and big government, read Tim Carney’s Obamanomics.

For even more candor and humor concerning Medicare, read David Hyman’s Medicare Meets Mephistopheles.

Tufts Academic Gives Two Thumbs Down to Cheap Food

I suspect I may be falling into a publicity trap here, but nonetheless I am unable to resist blogging about an email I received this morning from the Global Development and Environment Institute at Tufts University.  The email contained this teaser:

How does cheap food contribute to global hunger?  GDAE’s Timothy A. Wise, in this recent article in Resurgence magazine, explains the contradictory nature of food and agriculture under globalization. He refers to globalization as “the cheapening of everything” and concludes:

“Some things just shouldn’t be cheapened. The market is very good at establishing the value of many things but it is not a good substitute for human values. Societies need to determine their own human values, not let the market do it for them. There are some essential things, such as our land and the life-sustaining foods it can produce, that should not be cheapened.”

This sort of stuff could only be written by someone on full academic tenure and who has never had to worry about feeding his family.

It would take many hours to rebut all of the idiocies contained in the full article, but for now I will just say: Yes, it is true that U.S. government subsidies for corn, for example, cause environmental damage in the Gulf of Mexico (Cato scholars have in fact covered this before as part of our ongoing campaign to eliminate farm subsidies). And yes, poor farmers abroad have suffered because of government intervention in food markets. But those are problems stemming from government intervention, not the free market.

Private Sector Guts and Growth

The Wall Street Journal has an article today for people who think that we need government to thrust itself into the economy because major projects, like energy and technology projects, are too big or risky for private businesses. The article focuses on Chevron’s offshore oil development:

Chevron is leasing the Clear Leader, which floats in 4,300 feet of water in the Gulf of Mexico, to drill for oil through nearly five miles of rock. Big Oil never wanted to be here, in 4,300 feet of water far out in the Gulf of Mexico, drilling through nearly five miles of rock…

It is an expensive way to look for oil. Chevron Corp. is paying nearly $500,000 a day to the owner of the Clear Leader, one of the world’s newest and most powerful drilling rigs. The new well off the coast of Louisiana will connect to a huge platform floating nearby, which cost Chevron $650 million to build. The first phase of this oil-exploration project took more than 10 years and cost $2.7 billion – with no guarantee it would pay off….

“This is technology capable of going to the moon,” says Robin West, chairman of consulting firm PFC Energy, involving “extraordinary uncertainty, immense levels of information processing, staggering amounts of capital.” …

“What has enabled us to do that is technology,” says David Rainey, BP’s head of exploration for the Gulf of Mexico. “We have been pushing the limits of seismic-imaging technology and drilling technology.”…

The push into deeper water hasn’t always been smooth sailing. Offshore projects are expensive, time-consuming and prone to failure. Chevron boasts of a 45% exploration overall success rate in recent years, a remarkable run by industry standards, but one that also means the company has spent billions on projects that haven’t panned out.”

Bravo for gutsy and aggressive American capitalism! Chevron is taking huge investment risks, making remarkable technological advances, creating jobs, and finding new energy supplies to keep our homes bright and warm.

Political leaders in Washington should be encouraging such private business activities to pull the nation out of its slump. So rather than trying to hike taxes on multinational corporations and oil companies – as the Obama administration proposed in its budget last year – policymakers ought to be cutting corporate tax rates and making other pro-investment changes in federal tax and regulatory policies.