Future oil spills could be averted by Regulation 3.0 apps

W. David Stephenson is principal at Stephenson Strategies in Medfield, Mass., and a Government/Enterprise 2.0 consultant.

The BP oil spill in the Gulf of Mexico highlights the most important problem in regulating offshore drilling: a lack of transparency and real-time information.

The situation demands a new approach that I call Regulation 3.0. It capitalizes on a number of features of the emerging Web 3.0, in which everything will have its own Internet address and can be monitored and controlled remotely via the Web.

Regulation 3.0 applications would give federal and state regulators direct, real-time access to the exact information that companies receive so regulators would no longer depend on companies feeding — and perhaps filtering — the information to them.

Structured data makes such a shift possible. Think of it as a 21st-century bar code, in which information about a piece of data is permanently attached to that data through tags. The tags give the data context and mean that someone no longer needs to manually update or paste the data elsewhere. It will flow anywhere those tags are inserted.

The Web 3.0 approach would allow officials to monitor in real time every part of an oil rig’s safety system. Such surveillance could have revealed the faulty battery in the BP rig's blowout preventer and other problems that contributed to the rig's failure. A procedure could have been in place to allow regulators to automatically shut down the rig when it failed the pressure test rather than leaving that decision to BP.

Most importantly, Regulation 3.0 would ensure transparency. During my years as an environmental crisis manager, I learned that transparency is the only way companies can earn public confidence because we don’t trust anything they tell us. A “don’t trust us, track us” strategy, in which regulators have unfettered access to data, would help build that confidence.

The oil companies would reap direct benefits from that data and new approach to regulation. Structured data would let companies coordinate and integrate internal operations and processes that involve suppliers and customers to an unprecedented degree. All users could have the same real-time access to data and capitalize on worldwide, open standards for integrating it into their own operations, which would facilitate interoperability.

Regulation 3.0 would dramatically improve government agencies’ ability to monitor and respond to fast-changing situations and also would make compliance much less costly and laborious for companies. The structured data would automatically flow to every agency instead of companies needing to complete old-fashioned, agency-specific forms.

The Securities and Exchange Commission has begun phasing in a program that requires all publicly traded companies to file reports using Extensible Business Reporting Language (XBRL), a business-oriented subset of Extensible Markup Language that could be expanded to include tags specific to the oil industry. Companies that are already using XBRL for SEC reporting will get more benefits and amortize the expense if they begin to use the language in additional ways.

Relying on quarterly and annual reports to regulators made sense back when aggregating and reporting data were arduous and costly processes. Using structured data tools, reporting can largely be automated and integrated into a company’s daily operations. Perhaps the only silver lining of the BP blowout will be if it speeds the transition to a Regulation 3.0 approach that will protect the public interest and also help companies.