You make logical arguments over why we indeed need oversight, and some form of regulation. I've never argued against that per se.
I'm against the overreach, needless overlap, pointless obstructionism, or outright hostility most of the big Federal agencies exhibit against private companies in particular, and a free market in general.
Despite all of the corners you paint this particular case into, and again I'm assuming all of it is correct as you describe it, it is in no way as an isolated case in my opinion, justification for the current operations of the EPA, OSHA, BLM, FDA, Dept. of Interior, Agriculture, Energy, Education, and a host of other alphabet agencies that are doing nothing more than choking off the creation of jobs and desperately needed growth in our moribund economy.
Surely between the extreme you've outlined in this particular case, and the way the vast majority of these agencies operate today virtually unchecked by their wielding of brute force power, we can find a way to both protect the environment safely, and promote economic expansion with as little interference from these bureaucrats as possible.