Do the Right Thing?

And -- and -- you know, it goes back to the whole concept of regulations, which are in everything. The reason that I -- I hate them so much is because every single regulation costs in terms of goods and services.”

-Ben Carson

Hearing Board of the South Coast AQMDIt is not uncommon for businesses in California to complain that they have to deal with too many regulations. Unlike their brethren in Texas, they have to deal with inconveniences like state fire codes and contributions to workers’ compensation insurance, which they say puts them at a competitive disadvantage. In response, some threaten to relocate their business from Los Angeles to cities like Houston, which does not even have zoning laws. Government regulation is viewed as unnecessary “government interference” because these critics say that “market forces regulate the seller as strictly as any bureaucrat could”. The 2,258 households that have been displaced by the Porter Ranch Gas Leak are living within the fallacy of this argument.

There is no doubt that government officials and the bureaucrats that they employ have failed the residents of Porter Ranch and the problem was not that Sempra Energy was too highly regulated. Natural gas has been leaking uncontrolled from an antiquated well since at least October 23, and “it does not appear that Southern California Gas violated any regulations.”

In the Citizen’s United ruling, the Supreme Court sanctioned an electoral system that can be equated with legalized bribery. Charter schools, gun manufacturers, utility companies and other businesses all have enough money to pour into elections so that the candidates they support are given an advantage in elections. Sitting politicians are afraid to act against the interests of these groups for fear of a well-funded opponent in the next election cycle. This results in watered-down regulations and elected officials who are dissuaded from taking actions that would be in the best interests of their constituents. In this environment, it is not surprising that government officials in Porter Ranch ignored the complaints of local residents until they were forced by overwhelming evidence, and press coverage, to acknowledge  a developing environmental disaster.

As the details of the conditions that led to the leak come into focus it is clear that it is part of Sempra Energy’s business plan to do the least that government requires of them and that the marketplace has little need  to put the safety of California residents first. In 1976, SS-25 was already an aging well and it was found that its subsurface safety valve was leaking. Since it “was not easy to find a new part..the company opted not to replace it” and, by doing so, made the well less safe. The company ignored the potential consequences to the surrounding community because regulations did not require them to replace the valve as SS-25 was not a “critical” well. Forty years later it is probably safe to assume that the Southern California Gas Company customers, along with the residents of Porter Ranch, will be forced to pay the price for this lack of regulation.

As the Air Quality Management District (AQMD) takes its place in line to flex its regulatory muscle after the fact, they have negotiated “an order for abatement upon stipulation” with Sempra Energy that will take effect upon approval by the Hearing Board of the South Coast AQMD.  At the public hearing before this Board, the company requested that this approval be granted as quickly as possible so that they can start to implement the stipulations contained in this agreement. If the company was really concerned with doing the right thing and the negotiated settlement is truly in the best interests of the residents, they would not need to wait for this approval. The company would have already put these measures into place in a marketplace that truly worked in favor of the citizens.

Porter Ranch home prices have already taken a hit as this environmental crisis drags on. There are reports of banks refusing to approve mortgages and potential buyers dropping out of escrow. It is hoped that prices will recover once the leak is finally stopped, but this assumes that potential buyers will ignore the other wells operating at the field. The cat is already out of the bag and the only way to put it back in is to update regulations so that the protection of the residents is not superseded by the profits of Sempra Energy. After all, the company has already proven they will not regulate themselves.