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Pardon this Disaster, There's Deregulation Going On

06/22/2010 09:02 am 09:02:16 | Updated May 25, 2011

On January 28, 1969, the Union Oil Platform A, an oil platform 5.5 miles off the coast of Santa Barbara, California, blew out and dumped 100,000 barrels of crude oil, according to an estimate by the U.S. Coast Guard. The well was 3,500 feet below the ocean floor, and the temporary cap did not work. Additional fissures opened up soon after. Union Oil promised to have the leak plugged in 24 hours, but it took 11 days, during which the oil flowed into the Santa Barbara Channel. More than 10,000 birds and other animal life died due to the disaster. This oil spill seems almost quaint in light of the magnitude of the current BP disaster in the Gulf.

The Union Oil incident is considered to be the precipitating event that ushered in the ecological era including the first Earth Day in 1970 and culminating with the formation of the Environmental Protection Agency, signed into law by President Richard M. Nixon that same year. The care of the environment was not simply an issue taken up by "tree huggers" and other so-called left wing crackpots. Many on the other side of the aisle, including Senator Barry Goldwater and then California Governor Ronald Reagan, took up the environmentalist banner. In his 1970 state-of-the-state speech, Reagan spoke of "the absolute necessity of waging all-out war against the debauching of the environment." The National Review declared, "If [corporations] do not stop[polluting] we must ways to compel them in some way to do so..."

What happened over the past 40 years? How did we get from an issue so vital with agreement from varying quarters to where we are today with the devastating oil spill in the Gulf of Mexico? It isn't too hard to understand if one looks at the regulatory environment over the past few decades. The financial market's meltdown mirrors much of what is going on with the current debacle in the Gulf. First, regulations are set up for protection in response to a calamity. The stock market crash in 1929 and the ensuing Great Depression brought forth many new laws to protect against malpractice by financial institutions. Over the years, the regulations are watered down and even those that remain in place are not respected. Much of the same has happened with the regulations for "safe" drilling. The protections were eroded and those that were still in place were not adhered to. Now we're dealing with something so devastating that nobody really knows how it will turn out. What we do know is that it's something we'll be dealing with for years.

The events in the Gulf will usher in a new era of regulation and new energy policies. Based on current as well as past history, the real question is not whether these changes will take hold, but how long it will be before they're junked again.

Jonathan A. Schein is president/CEO of ScheinMedia, publisher of MetroGreenBusiness.com