Tag Archive for oil & gas regulation

extractive industries

First, thanks to Lawrence Baxter for inviting me here. I am a big fan of the new blog and its contributors. Re-energizing the conversation about regulation is an important task. I’ll mainly talk about health care regulation, but I thought…

some reality about really big "rational actors"

In efficient markets the mistakes of individual participants are corrected by the aggregate performance of the market as a whole. But when companies become so large that their mistakes spill out into the pubic arena, requiring some kind of public intervention to repair or salvage the situation, the pubic has an interest in reducing the likelihood of these mistakes and decisions on risk management cannot be left to the companies themselves. So when it comes to regulation, size really does matter in important ways.

a fickle finger of fate or the dirty digit of destiny?

Regulation is necessary to ensure that companies, pressured by the contraints of competition and the need to generate profits, take the precautions necessary to ensure public safety. The recent revelations about decisions made by BP before the gas blowout in the Gulf are once again a demonstration that strong, sophisticated and effective regulation must accompany business activity. This benefits everyone in the market as much as a public that has to bear the costs when things go wrong.