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Morning Bell: Obama and the Oil Spill

Posted By Rory Cooper On June 3, 2010 @ 9:16 am In Energy | Comments Disabled

The infamous words “a crisis is a terrible thing to waste” were first uttered by President Obama’s Chief of Staff Rahm Emanuel last year, when he laid bare his intention to use the credit crisis to reorder the U.S. economy. This sentiment now seems to animate the President’s own intention to introduce economy-crushing climate legislation [1] on the back of the oil spill in the Gulf of Mexico, while somehow blaming Republicans and, yes, the Bush Administration for what may be the worst environmental disaster in the history of our nation.

Meanwhile nearly 48 miles out [2] in the Gulf, and a mile below the surface, oil continues to gush out the sea floor every second, threatening the environment and the economy of the southeast United States. Hope is fading that the oil flow can be stopped in any short order. Roughly 1,200 miles away, confusion over command and control continues to build in Washington, where the White House debates cancelling official trips to Asia [3], but not unofficial trips to Chicago.

What the nation needs is better organization of the effort to cap the spewing well and aggressive action on the clean up front. But yesterday, the President didn’t go on the offensive against the gushing oil; he went after Republicans [1].

Obama suggested that the GOP’s deregulatory attitudes [1] were the core problem faced in the Gulf. Obama said congressional Republicans have a “sincere and fundamental belief” that government has “little or no role to play in help this nation meet our collective challenges…If you’re a Wall Street banker or insurance company or oil company, you pretty much get to play by your own rules, regardless of the consequences to everyone else.”

Actually, in the case of the BP oil spill, the involved parties—the companies and regulators—did not uphold their responsibilities to ensure safe operations or to adequately prepare for a worse-case scenario. But this failure was likely not the result of insufficient regulatory quantity: Getting a lease to drill offshore is already an onerous regulatory process, and once drilling operations commence, the lessee is subjected to constant monitoring and inspection.

It was more likely the case that the current regulatory regime [4] confuses responsibilities, undermines incentives for market-based safety solutions, and creates conflicts of interests between the regulator and those being regulated.

The opportunity the President sees here is to pass economy-crushing global warming legislation. The Heritage Foundation and most conservatives don’t see diversifying our energy supply as a problem, but do see a problem when it cripples the economy [5] and imposes top-down, Big Government mandates and restrictions which produce worse results.

Moreover, global warming legislation would do nothing to improve cleanup and very little to prevent future spills, but would distract from the very efforts to cleanup and stop the oil that must be top priority now, not to mention raise energy costs for families and kill much needed jobs [6]. In Louisiana itself, the effect of the Waxman-Markey global warming bill [7] would mean a loss of over 15,000 jobs, gas price hikes and skyrocketing consumer electricity rates. Subsidizing experimental energy sources doesn’t become more attractive merely because oil pollutes our waters; and the problems they carry should be fully debated, not crammed through as a way to vindicate the President’s command and control agenda.

And pretending that our economy can survive without a commitment to safe oil operations [8] is naïve at best. It is binary: If we don’t drill, we import. And if we don’t open drilling to easier sources such as onshore deposits and shale, we limit ourselves to riskier exploration a mile below the ocean floor. Despite the president’s assertions at his press conference earlier this week, billions of barrels of “easily accessible [9]” oil have been turned into “impossible to access [9]” oil by federal regulations and moratoria – including the President’s own actions – that block any access.

What the President should do is examine the red tape that may have contributed to the failure to contain the environmental disaster. Were there missed opportunities to burn off more of the leaking oil because of overblown air pollution standards? What were the holdups in the use of dispersants? Did federal permitting delays stop Louisiana from creating the artificial barriers it needed? The answers to these questions appear to be yes, and that responsibility lies with the President. He and his team should make it top priority to waive any regulatory barriers that continue to slow cleanup and recovery efforts.

We agree with Obama—the buck stops with the president. The Deepwater Horizon platform sat on federal waters and was under federal jurisdiction. It is the responsibility of the federal government to ensure that the leased space is not a threat to public health or safety. And it is the responsibility of the government to ensure the clean up efforts in the Gulf are appropriately managed. Coordinating the best experts in the world (outside of Hollywood film directors) to work with BP to stop the leak is priority #1.

Coordinating the cleanup is equally imperative so that our ecosystems, wildlife, economy and industries can experience as little disruption as possible. The Oil Pollution Act of 1990 authorizes the president to oversee the cleanup efforts of the responsible parties, and offshore this duty falls to the U.S. Coast Guard. Yet, Louisiana Governor Bobby Jindal had to lobby the White House for weeks [10] to get engaged on this front.

Make no mistake, the actions of BP should be reviewed, but not simply by a criminal investigation designed for show [11]. BP has a spotty safety record that needs to be examined. The company needs to account for any warning signs that may have been missed, and whether a corporate culture that focused on “Beyond Petroleum” contributed to the neglect of oil and gas operations.

The Obama administration’s resort to criminal investigation and possible prosecution of BP is not only premature, it is predictable. In the wake of accusations that Obama has failed to take decisive action, his administration is taking the path of “nothing shows that you are ‘doing something’ like prosecuting someone.”

It is possible that criminal wrongdoing occurred, but the current approach—one that all but announces that criminal charges will be brought and then seeks to identify the crime and who will be designated as criminal—undermines the criminal justice system and Americans’ respect for the law. Whenever high-ranking law enforcement officials select their targets in this manner, it evokes disturbing echoes of a statement one Harvard law professor recently attributed to the head of Stalin’s secret police, Lavrenti Beria: “Show me the man, and I’ll find you the crime [12].”

BP is financially responsible [13]. BP has unlimited responsibility for the cleanup. It also must pay liability damages. That price tag will likely be higher than the $75 million cap, and could be higher than the additional $1 billion provided through the Oil Liability Trust Fund. BP has said it will pay beyond the $75 million cap, but lawmakers are understandably skeptical. Creating a contract with BP for these damages would make sense. What would not make sense is using this as an opportunity to raise gas prices for Americans with increased oil taxes, thereby shifting the costs of the spill to the consumer [14].

It’s time for President Obama to exert leadership. If this is his top priority, he must prove it with actions, not rhetoric. President Obama instinctively leans toward an activist government except when every so often he hesitates. Ironically, it is these moments that tend to be the precise times when the federal government’s role is most justified, whether that be border security, the war on terror, ceding sovereignty to multilateral organizations, or now in the Gulf. The federal government has a role in the Gulf [15], and it’s time for the president to articulate it to the American people.

Quick Hits:


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

URL to article: http://blog.heritage.org/2010/06/03/morning-bell-obama-and-the-oil-spill/

URLs in this post:

[1] introduce economy-crushing climate legislation: http://online.wsj.com/article/SB10001424052748703561604575282593380918512.html?KEYWORDS=LAURA+MECKLER

[2] 48 miles out: http://www.telegraph.co.uk/earth/environment/7676018/BPs-Gulf-of-Mexico-oil-spill-the-crude-facts-of-an-oil-disaster.html

[3] debates cancelling official trips to Asia: http://www.nytimes.com/2010/06/03/us/politics/03memo.html?partner=rss&emc=rss

[4] current regulatory regime: http://www.heritage.org/Research/Reports/2010/05/Gulf-Coast-Oil-Spill-Does-the-Federal-Government-Share-Responsibility

[5] cripples the economy: http://www.heritage.org/research/reports/2009/08/impact%20of%20the%20waxman%20markey%20climate%20change%20legislation%20on%20the%20states -

[6] kill much needed jobs: http://www.heritage.org/Research/Commentary/2010/04/In-Green-Spain-Unemployment-Nearly-Twice-Our-Woeful-10-Percent-Rate

[7] In Louisiana itself, the effect of the Waxman-Markey global warming bill: http://www.heritage.org/Research/Reports/2009/08/Impact-of-the-Waxman-Markey-Climate-Change-Legislation-on-Louisiana

[8] safe oil operations: http://www.heritage.org/Research/Reports/2010/05/Gulf-Oil-Spill-Washingtons-Response-Should-Not-Preclude-Future-Exploration

[9] easily accessible: http://www.foundry.org/2010/05/27/not-all-the-easy-oil-is-gone-mr-president/

[10] lobby the White House for weeks: http://www.reuters.com/article/idUSTRE6520OV20100603?type=domesticNews

[11] criminal investigation designed for show: http://online.wsj.com/article/SB10001424052748704515704575283031919749018.html?mod=WSJ_hpp_MIDDLETopStories

[12] Show me the man, and I’ll find you the crime: http://blogs.wsj.com/law/2008/03/13/alan-dershowitz-on-spitzergate-what-is-this-russia/

[13] BP is financially responsible: http://www.foundry.org/2010/05/27/addressing-bp%e2%80%99s-willingness-to-pay-for-the-oil-spill/

[14] costs of the spill to the consumer: http://www.foundry.org/?p=34760

[15] federal government has a role in the Gulf: http://www.heritage.org/Research/Reports/2010/05/Gulf-Coast-Oil-Spill-Does-the-Federal-Government-Share-Responsibility

[16] they consider Israel’s blockade of Gaza to be untenable: http://www.washingtonpost.com/wp-dyn/content/article/2010/06/02/AR2010060204437.html

[17] The New York Times: http://www.nytimes.com/2010/06/03/business/03dartmouth.html?ref=todayspaper

[18] Gallup: http://blog.heritage.org http://www.gallup.com/poll/139346/No-Improvement-Gallup-Underemployment-Rate-May.aspx

[19] offered him three jobs: http://www.politico.com/news/stories/0610/38064.html

[20] to provide the island’s illegal Mexican immigrants with identification: http://www.washingtonexaminer.com/world/Mexico-opens-California-office-to-provide-ID-for-illegals-95434969.html

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