BP backlash bill

US drilling bill: The oil industry deserves tougher supervision after BP’s massive spill. But the micromanaging measures approved by the US House of Representatives on Friday could fossilise current best practices and discourage new technology. Any final law should focus more on empowering regulators to keep Big Oil in line.

A tough bill was inevitable - and in many ways logical. For instance, removing the $75 million cap on oil companies' liability for economic damages from oil spills makes sense. The cap was an indirect subsidy to oil companies because it made taxpayers the backstop for careless operators. Also, given the environmental damage inflicted by BP’s spill, a planned $2-a-barrel conservation fee hardly seems outrageous. It is even justifiable to exclude companies with bad safety records from bidding for new leases, though this measure does seem designed to narrowly punish BP.

The biggest problem is that parts of the House bill read like a how-to engineering manual. Wading into the technicalities of deep sea drilling, Congress has laid down detailed rules on well design - specifying how cement should be applied and how blowout preventers should be designed. This is a risky strategy. In a fast-moving industry, such best practices may soon be outdated, but the incentives to design or use better safety gizmos will be missing if older protocols are set in stone.

Regulators are much better placed to keep pace with the latest safety techniques and make the industry use them. President Barack Obama's administration has already separated the revenue collecting and safety functions of the watchdog - formerly known as the Minerals Management Service - which maintained an unhealthy intimacy with Big Oil and approved BP's seemingly cut-price Macondo well design.

But the supervisor also needs the power and resources to withstand oil industry lobbying, monitor activity and enforce safety requirements. To do that, it needs some flexibility to set standards. The rigid rulebook put forward by the House risks detracting from this important mission.

Of course the best available safety measures should be applied to risky activities like deepwater drilling. But as consideration of the issue moves to the Senate, lawmakers should keep in mind that a strong regulator is better able than they are to hit a moving target.