Deepwater and Disruption

One question that hasn’t been asked by many journalists and environmental watch-dogs is, “How often do deep-water oil drilling operations fail massively?” That’s because the answer is obvious: almost never. Or to be a bit more precise, with 3,858 off-shore platforms in the Gulf of Mexico, about .00026 incidents per rig-lifetime Actually that’s not quite right. There are only fifty deepwater rigs, so the number, assuming no more blowouts, is .02 incidents per rig-lifetime.

Problem is, “almost” isn’t good enough.  We have to be perfect.  But perfection is an abstract notion. In real life, things fail. So we know we’re going to have Three Mile Islands and Chernobyls and Exxon Valdezes and Deepwaters. They’re going to happen. Any risk assessment analyst will tell you this.

So why are we (including BP executives) shocked and surprised by the Deepwater spill? More importantly, why were we unprepared? Because in spite of all the analysis, all the statistical forewarning, we’re not very good with numbers.  That is, we tend to override analysis, and go with personal experience. If you haven’t experienced a disaster, you tend to discount the possibility.  If you’ve only known success, you expect it to continue, even if the numbers tell you it won’t.

Robert Samulsen makes much the same point in a recent Washington Post essay, citing the recent financial meltdown. It wasn’t that traders and investment banks were unaware of the risks they were taking. They knew the risks. They just didn’t think they’d be the ones to suffer the consequences (and they’re doing their best to ensure that’s the case by sticking the rest of us with those consequences). Their track record of financial success bred false confidence, the same way the Bush administration’s trappings of power bred false confidence in their Iraq expedition (once again, the guys in charge have escaped the consequences and stuck it to the rest of us). Looks like the same thing for Horizon Deepwater. These guys relaxed – and not just BP.  We all did. We elected a Bush administration that didn’t take regulation seriously.  And the Obama administration didn’t correct the problem.

So are we bound to repeat these kinds of failures? In a word, yes.

But that’s not all bad news. Massive failures are useful. They’re opportunities for learning. While we’re likely to repeat these kinds of failures, we don’t have to repeat this particular one. And now is the time to ensure that we don’t. Furthermore, with the Wall Street / housing bubble failure fresh in our memories, now is the time to ask how we can be better with numbers.  How can we put safeguards in place that over-ride the overconfidence of experts?  And finally, now is the time to think about how we can be more prepared to leverage failures and crises.

Rham Emanuel, in an unconscious nod to panarchy theory, has famously said, “A crisis is a terrible thing to waste.” Then he and the Obama administration went right out and wasted the Wall Street meltdown. He understands that systems are often most amenable to redesign when they have been disrupted. Resources come un-moored from their usual connections, relationships are broken, and the potential pathways for meaningful change temporarily open up. Maybe this is the most important lesson we can take from disasters like Horizon Deepwater, and the big crash: be ready. Not to prevent the disruption, but to take advantage of it.

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