06/16/2010 03:12 pm ET | Updated May 25, 2011

Obama Falls Short on BP Oil Leak in Address

In his first Presidential Address from the Oval Office, President Barack Obama missed a rare opportunity to set this nation on a fundamentally new course for regulating the oil and gas industry.

Breaking the current "fox-guarding-the-henhouse" regulatory structure is essential in meeting the President's laudable goal of creating a renewable energy-based economy.

Ending the nation's energy dependence on fossil fuels will require an adversarial regulatory structure that forces industry to fully account for the cost of producing energy, including the impacts of pollution on the health of Americans and impact on the environment.

The President stopped short in sending this crucial signal to the market place.

Obama correctly acknowledged that the Department of Interior's Minerals Management Service, the agency that was supposed to be regulating BP, failed miserably.

"Over the last decade, this agency has become emblematic of a failed philosophy that views all regulation with hostility -- a philosophy that says corporations should be allowed to play by their own rules and police themselves.

"At this agency, industry insiders were put in charge of industry oversight. Oil companies showered regulators with gifts and favors, and were essentially allowed to conduct their own safety inspections and write their own regulations," Obama said.

The President's assessment of regulatory malfeasance was dead on.

His solution to the problem, however, was a capitulation to industry.

Instead of removing MMS from oversight of offshore drilling, the president simply assigned a new boss to run a failing agency.

This is a timid response to addressing a corrupt regulatory agency that is directly culpable in the nation's worst environmental disaster in history.

The president should have listened to the advice of former Interior Secretary Bruce Babbitt, who sharply criticized Interior Secretary Ken Salazar earlier this week when Salazar first proposed keeping the disgraced MMS as the offshore oil industry's chief regulator.

Speaking on "Platts Energy Week" on Sunday, Babbitt said Salazar's proposal doesn't go far enough, likening it to "rearranging the chairs on the deck of the Titanic." Babbitt suggested shifting oversight to the Environmental Protection Agency.

Moving oil and gas regulation to the EPA would have sent a clear signal to the industry that a fundamental shift in U.S. energy policy was under way and would have been cheered by the environmental community and renewable energy producers.

BP's recklessness and regulator's willingness to look the other way is a textbook example of government's inability to adequately control one of the world's most powerful corporations.

Now is the time for a regulatory overhaul designed to protect Americans and the environment from the short-term, profit-driven excesses of massive multinational corporations that have the power to destroy vast areas of the planet, wreck the livelihoods of millions of citizens and kill thousands of innocent people.