Organizational Responses of Transnational Private Regulators after Major Accidents: the Case of the American Petroleum Institute and the Deepwater Horizon Oil Spill

This chapter analyses how the American Petroleum Institute (API) adapted to the post-Deepwater Horizon (DWH) oil spill era despite the criticisms from investigation reports that brought into question its role as private standard-setter in the oil and gas industry and the reliance of federal regulations on the API’s standards. Grounded on the theory of regulation, investigation reports, and documents from the Bureau for Safety and Environmental Enforcement (BSEE) and the Center for Offshore Safety (COS), this chapter examines the organizational response of the API and how BSEE, as the federal regulator, endorsed it. It proposes a definition of what a regulatory crisis is, and argues that despite the regulatory crisis created by the DWH accident, the API increased its influence in offshore oil and gas regulations in the US not only as rule-maker but also as supervisor. The chapter identifies the gaps in transparency and regulatory practices that may undermine the effectiveness of the new regulatory scheme. By presenting a case from the oil and gas industry, this research aims to contribute to the broader scholarship on the responses of transnational private regulators in times of crisis.