Friday, May 10, 2013

Regulatory elixir

Would a Texas version of the modern regulatory regime, as it exists in business pariah states like Maryland, New York, California, and Illinois, have prevented the fertilizer explosion in West, Texas? According to the New York Times:

West Fertilizer fell under the purview of at least seven state or federal regulatory agencies, each with its own objectives. None had primary responsibility for ensuring the safety of the hundreds of tons of ammonium nitrate stored there or that of the workers or residents nearby.

Maybe an eighth agency would have done the trick. Then again, maybe not. The arrest of a paramedic who was on-site before the explosion for possession of a “destructive device” calls into question whether the fire that sparked the explosion really was an accident.

At any rate, there’s good reason to believe a modern regulatory regime, unaffordable in economically dislocated regions like rural Texas, would have killed the West Fertilizer Plant long ago.

If you’ve visited one dying, out-of-the-way town, you’ve visited them all. The local economy is so depressed, most of the money comes from urban dwellers passing through, seeking gas stations, fast food restaurants, and hotel accommodations.

At one point, the town thrived. Economic conditions were favorable. Then the conditions changed. The mobility of goods in a global, competitive marketplace forced the concentration of manufacturing into suburban, large-scale operations.

“The destruction of the community begins when its economy is made—not dependent (for no community has ever been entirely independent)—but subject to a larger external economy.” –Wendell Berry

Large-scale industrial operations with a high profit margin and a broad customer base can absorb the costs of regulations. And often they don’t mind doing so, despite the costly diminishing returns of evermore regulations. That’s because the cost of regulatory compliance poses a graver threat to the profits of local industries like the West Fertilizer Plant. Big business, if I may be so bold, has an interest in squeezing out the competition.

Small towns like West are going out of style, extinguishing cultural roots and a conservative, meek way of life. We’ll lose that more quickly if small businesses are regulated out of existence.

The people who live in small-town America like it there, despite having to endure hardships infrequently encountered in suburbia. There are more important things to invest limited resources in than safety and regulatory infrastructure to avoid a one-in-a-million industrial accident.


UPDATE (5/17):

NBC reports:

Investigators believe the fire started somewhere in the 12,000-square-foot fertilizer and seed building.

Looking into the cause of the initial fire, they have eliminated the weather, natural causes, anhydrous ammonia, a railcar containing ammonium nitrate, and a fire within the ammonium nitrate bin.

Additionally, they said water used during fire-fighting activities did not contribute to the cause of the explosion as some had speculated.

Bryce Reed, a Texas paramedic who was among the first responders at the explosion site, was arrested last week for possession of pipe bomb components. State officials have said no evidence linked Reed’s arrest to the plant disaster.

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