University of Alaska Anchorage Department of Public Administration

University of Alaska Anchorage Department of Public Administration MPA Comprehensive Exam ‐‐ January 7, 2011 Question 1 ( 40%) You are a member of a Presidential Commission mandated to review the role of Public Administration in the 2010 Deep Water BP Horizon Oil Disaster. Identify four examples of action failures that led to the 2010 disaster. (List a specific example from the article that related to each failure you selected) For each failure: a) Recommend a regulation or policy or structural change that would help prevent the failure in the future. b) Explain why the change you recommend will improve the situation. c) Explain how the recommended change is supported by Public Administration theory or literature. Question 2 (40%) The losses suffered by BP as a result of this spill were both large and significant and we can assume BP didn’t plan to suffer them. Risk is part of everything that we do, and achieving zero risk would impose significant costs on the industry, citizens of Louisiana and consumers of energy. MMS had the job of balancing the trading off of risk versus production. a) Why would society’s view of this tradeoff differ from that of the petroleum industry? b) What about the original structure of MMS influenced the choice of tradeoff? c) Do you think the restructuring of MMS will affect this decision process? d) How would you change the process to make the industry account for society’s view? Question 3 (20%) In 2000, an environmental assessment meant to guide MMS into the deepwater age counted 151 well blowouts in the years 1971 to 1995, about a quarter of which had led to spills. The report concluded that spills are a "very low probability event." In 2003, Mr. Oynes was quoted as saying that it is "almost impossible" for a spill the size of the Santa Barbara spill in 1969 to happen again. a) What information do you need to calculate the probability of a blowout with spill? Show the formula you would use. b) Is this a good estimate of spill probabilities looking forward through 2010? Why or why not? c) As a public manager, what additional information would you seek to inform your assessment of the risks? August 7, 2010 Minerals Service Had a Mandate to Produce Results By JASON DePARLE NEW ORLEANS — On March 5, 1997, an obscure federal official with a puckish grin entered a hotel ballroom here and greeted 1,000 jittery oilmen on what would prove a landmark day. For years, fading interest in the Gulf of Mexico had punished the local economy and left Louisiana to mourn its “Dead Sea.” Now, rising oil prices and new technology were setting off the deep-water version of a gold rush. Interest in drilling ran so high that the official, Chris Oynes, was heading into the annual lease auction with a record number of sealed bids. In giddier times before the bust, his predecessor presided over the auction in a jaunty red blazer, but Mr. Oynes was far too conservative for that. Or so everyone thought — until he opened his briefcase and brought down the house with a size 46 scarlet jacket, an omen of the coming deep-water boom. “They knew symbolically what this meant,” Mr. Oynes said in a recent interview. “In Louisiana terms: ‘Let the good times roll.’” Now the gulf is reeling from the worst oil spill in United States history, after five million barrels of sludge escaped from a defiant mile-deep hole that BP finally cemented last week. Deep-water drilling has been temporarily banned. And the Minerals Management Service, the agency that led the way into the deep-water age, has been abolished, ridiculed as a pawn of the oil industry it was meant to oversee. The gulf office that Mr. Oynes ran for many years has drawn particular scorn. The causes of the spill remain unclear, but a number of the agency’s actions have drawn fire: it shortened safety and environmental reviews; overlooked flaws in the spill response plan; and ignored warnings that crucial pieces of emergency equipment, blowout preventers, were prone to fail. 1 of 12 The story has gained a bacchanal gloss because agency employees in Louisiana and Colorado took meals, gifts and sporting trips paid for by the industry, and several Colorado officials had sex and used drugs with industry employees. But the agency’s culture was shaped by forces much bigger than small-time corruption. For decades, Washington and Louisiana were joined in the quest for red-jacket days, and the minerals agency was expected to provide them. Washington got oil and royalty fees; Louisiana got jobs; and the agency got frequent reminders of the need to keep both happy. Seldom do regulators work in a place so dependent on the industry they oversee. From the top of Louisiana’s tallest building (One Shell Square) to the bottom of its largest aquarium (with a sunken rig), oil saturated the state’s culture long before it covered its marshes. It is prized as a source of jobs and as a source of tax revenue. While Floridians stage protests to prevent drilling, Louisianians stage a Shrimp and Petroleum Festival to “prove that oil and water really do mix.” When Mr. Oynes’s wife, Rena, won a teaching award, it was sponsored by the American Petroleum Institute. Across South Louisiana, regulators have grown up hunting and fishing — and working on oil rigs — with the people they oversee. Few people have mattered more in that world than Mr. Oynes, 63, who held top jobs in the gulf office for 21 years and outlasted 11 agency directors before resigning abruptly in May. Many branches of government have parallel figures, little-known civil servants whose knowledge and staying power lend them great sway. Cobbled together three decades ago from rival corners of the Interior Department, the minerals service had a three-part charge: issuing leases, collecting royalties, and overseeing the dangerous work at sea. His superiors in Washington set broad policy, but Mr. Oynes, a heavyset conduit of high energy, dominated the gulf with 12-hour days and a zeal for detail. His decisions guided which drilling plans would be approved, what safety checks would be required and how the platforms would be inspected. Raised in conservative Orange County, Calif., he shared nothing of the Mardi Gras spirit for which Louisiana was known — only its belief in the importance of oil and its respect for the people who mined it. For years, he told associates that modern engineering made spills all but impossible and harmless if they did occur. Since the Deepwater Horizon rig exploded on April 20, Mr. Oynes has made no public comments. But angry at what he called lampooning depictions of the agency, he recently 2 of 12 broke his silence, offering his account of what happened on his watch. He aired many problems, but few regrets. “I thought we had done a pretty good job of addressing the challenges that come with deep water,” he said in an interview. “My opinion has not changed.” Mr. Oynes acknowledged that he had known nothing about a group of studies, some nearly a decade old, that cast doubt on the reliability of blowout preventers — the fail-safe equipment that failed in the BP spill. He could not explain why the studies, commissioned in Washington, had not reached him. But he bridled at what has become the dominant story line: that a heedless group of derelict bureaucrats abetted catastrophe. In Mr. Oynes’s counternarrative, a dedicated staff did all it could to safely coax oil from watery depths, mindful that it creates jobs, bolsters national defense and helps keep the lights on. “That is a very noble mission,” he said, while emphasizing that the gulf is a special prize. “When people came down, new directors, whatever, I would try not to insult their intelligence,” he added. “But I tried to make sure they understood we had a national asset they were managing.” “I can’t tell you how many times we had that conversation inside M.M.S.: doesn’t the public understand energy doesn’t come from a light switch?” he said. “It has to come from somewhere before it gets to the light switch.” A Special Bond If modern Louisiana history could be squeezed on a bumper sticker, this is what it would say: Louisiana ♥ Petroleum. Or that was the message conveyed last year when Mr. Oynes joined other Interior Department officials at a hearing in New Orleans on offshore drilling. At hearings elsewhere, industry critics largely set the tone. But in New Orleans, a grandmother waited for hours to say, “Drill, and drill vigorously.” A school principal said the majority of his students’ parents worked for the oil industry. A drilling engineer lauded the industry’s safety record. “The incident rate for a real estate agent is higher than someone working on the rigs,” he said. 3 of 12 As things go in Louisiana, the engineer happened to be Mr. Oynes’s best friend. Five states border the Gulf of Mexico, but Louisiana’s bond with subsea petroleum is unique. Marshes blur distinctions between drilling on land and at sea. The continental shelf slopes gently. There are no white sand beaches to protect, only river mud. In some states, drilling has been seen as a threat to native cultures. In Cajun country, it opened a door to the middle class — even as a typical offshore schedule (two weeks on, two weeks off) let workers still fish, hunt and farm. “The industry didn’t destroy the old culture — it saved it,” said Diane Austin, an anthropologist at the University of Arizona.

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