May 26, 2008
The Paradox Of “Risk-Free”
By Michael D. Shaw
This holiday weekend, the plans of many Americans were disrupted by record-high gasoline prices. Not surprisingly, hordes of politicians took advantage of a golden opportunity for publicity, and grilled oil company executives—knowing full well that they have little to do with setting crude oil prices. But if you get past the usual rhetoric, something new seems to be emerging: More folks are questioning the wisdom of a host of government policies affecting energy and the environment.
At the core of this inquisitive attitude is the notion that attempting to create a risk-free society poses its own set of risks, and some of these are worse than the very ones supposedly being eliminated. Or, put more concisely: there’s plenty of risk in trying to go “risk-free.”
While it might not actually be possible for the United States to be completely self-sufficient in energy, surely the over-regulation that has severely curtailed offshore oil drilling, and has prevented a new refinery being built here since 1976 has hardly helped. Once again, those most hurt by these policies are the poorest among us—those the Government tells us they care the most about.
The risks of going risk-free usually manifest themselves as one or more so-called “unintended consequences,” the latest versions being how using corn for fuel caused food shortages, and how environmental restrictions on Corps of Engineers’ plans for New Orleans definitely exacerbated the effects of Hurricane Katrina. However, “unintended consequences” is little more than verbal cosmetics painted on disastrously conceived policy.
What would the reaction be to a drunk driver claiming that killing a family of four in a catastrophic accident was an “unintended consequence” of him celebrating too much at the local tavern? What should the reaction be to millions of African deaths caused by the banning of DDT? In the latter case, the only reaction can be to bring back the chemical, and, in fact, that is happening.
Many examples of the negative consequences of regulatory actions could be cited, including a particular case that occurred in California a few years ago. Ethylene oxide (EtO), a vital chemical used as a sterilant in health care and other applications, is one compound the regulators love to hate, and it has been regulated beyond all reason—well past anything that could be justified scientifically. It is one of very few chemicals that has both toxic and explosive properties, that could emerge in a typical workplace, under upset conditions. Of course, with proper handling it is quite safe.
California regulations provide for very stringent limits on how much EtO can be exhausted to the air, such that a particular type of device must be used to treat any effluent. Unfortunately, this device contains an open flame. Yes, an open flame device is used with an explosive compound.
Certainly, under normal operation, the amount of EtO reaching the flame is below explosive levels. The problem is that when things go wrong, anything less than fail-safe is extremely imprudent. Because of very foolish actions by plant operators, which manually overrode a safety interlock, an explosive level of EtO did reach the flame, and a large explosion occurred. Owing to nothing more than sheer dumb luck, no one was killed.
Please note that the effluent treatment required by California provides only marginally better EtO removal than devices used in all other states, and absent the device, the incident would not have occurred. Was it really worth it? At the time, the whole affair seemed like a case of regulatory malfeasance, but I was to find out that no such thing exists, thanks to the landmark Supreme Court case of Dalehite v. United States, 346 U.S. 15 (1953).
This was the test case stemming from an April, 1947 incident, referred to as the Texas City disaster, considered the worst industrial accident in American history. A massive explosion of ammonium nitrate fertilizer—destined for relief efforts in Europe—caused 581 deaths, along with more than 5,000 injuries, and property damage leaving dozens of businesses in ruins, and 2,000 people homeless.
Since the entire operation was run by the Federal government, and the Feds had written all the specifications on how to handle the material, there was no argument on who was to blame. Many of the resulting lawsuits were combined into the Dalehite case, under the Federal Tort Claims Act (FTCA). Elizabeth Dalehite was the widow of Henry Dalehite, a tugboat captain killed in the explosion. In April, 1950 the district court found the US liable for a long list of negligent acts involving well over 100 agencies and their representatives.
Elizabeth was warned, though, that the Government might appeal, and the Supreme Court upheld the appeals court in reversing the lower court decision. In other words, the plaintiffs lost.
Under a rather novel theory, the Court would essentially negate the Tort Claims act with the astonishing finding that affirmed that the Feds are not liable for “negligent planning decisions” which were properly delegated to various departments and agencies. Under this reading, the FTCA exempts “failure to exercise or perform a discretionary function or duty,” and all the negligent acts in the case were discretionary in nature. Quite convenient, don’t you think?
The dissenting justices noted that a private individual would have been held to higher standards here than the Government. In 1955, Congress would eventually provide some compensation to the survivors, but most agreed that it was too little too late.
Thus, with the regulators immunized against the consequences of their actions—intended or otherwise—the public must be much more proactive. That means contacting their representatives before questionable policy plans become law.