- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

Oil Spill: Focus on Containment, Clean Up, Causation

Posted By Nicolas Loris On May 3, 2010 @ 6:34 pm In Energy | Comments Disabled

The oil spill in the Gulf of Mexico is an unfortunate and terrible accident that poses economic and environmental challenges to the Gulf coast. The fact that the explosion took eleven lives is regrettable and condolences to friends and families who lost their loved ones. Many questions are yet without answers; the most general and pressing being: what went wrong? Along with stopping the leak and containing the oil slick to minimize, the imperative concern is to figure out what went wrong. There will be lots of finger pointing and calls for action but Members of Congress and the White House should refrain from making any rash political decisions.

Despite accusations that BP cut corners on preventative measures, BP America Inc. President Lamar McKay maintains that’s not the case saying [1], “My belief is that that does not have anything to do with it. I believe we’ve got a failed piece of equipment. We don’t know why it failed yet in this contracted rig.” Whether that’s the case remains to be seen and will require a thorough investigation. The company is spending $6 million a day to reduce the environmental impact with burnoffs, oil booms, chemical-filled barriers and other dispersant chemicals and is attempting to activate the blowout prevention mechanism that was supposed to go into effect when the rig exploded. Answering this question must be at the top of the priority list.

After the “what happened and why” questions follow the “who’s to blame” ones. The obvious responsible party is BP and the company has vowed to pay for the clean up costs for [2]“legitimate and objectively verifiable claims for other loss and damage caused by the spill.” This should include reimbursing the taxpayers for government resources allocated towards the problem [3], which thus far includes the Coast Guard, the Navy, the Environmental Protection Agency and the Minerals Management Services.

Also on the receiving end of much blame is President Obama and his administration. Critics on the left and the right disparaged the president’s slow response. Some are calling the Gulf oil spill “President Obama’s Katrina” since federal efforts weren’t ramped up immediately. A large part of this may have been the Coast Guard underestimating the severity [4]of the problem, but regardless, there will be plenty of time for passing blame. The focus needs to be remain on containment, clean up and causation.

For the most part the administration’s reaction has been prudent. President Obama has called on [5]Department of Interior Secretary Ken Salazar to report on new technologies might be needed to prevent future spills in the next thirty days. In this time no new lease sales will occur. Although none were meant to occur anyhow, this is a common sense approach for the near-term.

But the White House should refrain from making any impulsive decisions that affect our long-term energy policy. While there are economic consequences with the spill, there are much bigger economic costs with a ban on offshore drilling. Even Secretary Salazar acknowledged this – noting that 30 percent of our nation’s oil production comes from the Gulf. He asserted [6], “For us to turn off those spigots would have a very, very huge impact on America’s economy right now. This is an industry that can operate safely. There has been a tragic accident here and we need to learn the lessons from it, and we will not move forward with any kind of activity on offshore oil and gas drilling that isn’t going to have safety first.” Secretary Salazar should also be commended for this level-headed approach.

The knee jerk reaction for politicians is to put in place laws and regulations they believe will solve the problem, but often times these can have adverse effects, as explained by Richard Fulmer [7]:

Suppose, for example, that the final result of a congressional inquiry into a tragedy is a bill mandating the use of technology “X.” Let us further suppose that X is, indeed, an excellent, state-of-the-art solution, and not something that was selected because Technology X Industries, Inc. made a generous campaign contribution to Senator Jones, or because the X Solutions company happens to be located in Congressman Smith’s district.

In a dynamic, free market economy, technology X is likely to be superseded very quickly by superior technology “Y.” Once X has been mandated, however, Y may never be used. First, innovators have little incentive to investigate alternatives to X, given that entrenched laws must be overturned before such alternatives can be used. Second, even if Y were to be developed, the status quo surrounding X would fight to keep the laws mandating X firmly in place.”

The Gulf oil spill presents significant near-term and long-term questions and challenges. We need to address the environmental clean up and cause of the spill before moving forward with anything else.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/05/03/oil-spill-focus-on-containment-clean-up-causation/

URLs in this post:

[1] saying: http://www.nytimes.com/gwire/2010/05/03/03greenwire-bp-cabinet-officials-defend-oil-spill-response-74587.html

[2] clean up costs for : http://www.reuters.com/article/idUSN0319032520100503?type=marketsNews

[3] government resources allocated towards the problem: http://voices.washingtonpost.com/federal-eye/2010/05/oil_spill_update_on_the_govern.html

[4] underestimating the severity : http://www.nytimes.com/2010/05/01/us/01gulf.html

[5] has called on : http://news.yahoo.com/s/ap/20100430/ap_on_bi_ge/us_oil_rig_explosion_obama

[6] asserted: http://thehill.com/blogs/e2-wire/677-e2-wire/95485-salazar-pulling-back-on-gulf-of-mexico-oil-production-would-have-a-huge-economic-impact

[7] as explained by Richard Fulmer: http://www.masterresource.org/2010/05/turning-tragedy-into-triumph/#comments

Copyright © 2011 The Heritage Foundation. All rights reserved.