Prescriptive And Performance-Based Regulation For Deep Water Drilling

The Deepwater Horizon disaster caused the loss of eleven lives and the largest accidental marine oil spill in the history of the petroleum industry. An early reaction of the US Department of the Interior was to issue of a directive to improve the safety of offshore oil and gas drilling operations. The directive used emergency rulemaking to cover gaps in the US regulatory regime. The prescriptive nature of the directive followed the historical pattern of the US approach to safety legislation. The need for emergency rulemaking demonstrated that US regulations were not adequate to deal with the disaster. The lack of flexibility inherent in a prescriptive approach suggests that this approach can not be expected to adapt to novel situations, or increasingly hazardous situations. The paper will propose that a performance-based approach has significant advantages over prescription particularly in situations where there are significant technical challenges, the risks are not well understood, and a best practice is not well-established. Prescription has a role to play within the performance-based framework The paper references the Deepwater Horizon case to discuss the pros and cons of a prescriptive approach to regulation and compare this with the performance-based (or "goalsetting") approach to safety that has been adopted in many other parts of the world