Gov’t should clean oil leaks & bill the drillers

The oil leak spreading throughout the Gulf of Mexico, without any resolution clearly in sight, is an indication that the federal government should have responsibility for cleaning up messes like these. Why is it that, BP, a company that might have been negligent in the first place, is trusted to oversee the response to a disaster that is harming the public welfare?

While the government should clean up the problem, the oil company involved – or the industry as a whole – should pay the bill. Oil companies could be required to pay into a collective insurance pool as part of the price of drilling on U.S. territory. Or the U.S. could simply bill the oil company responsible for the leak. Perhaps this would give drillers an incentive to maximize the safeguards against leaks.

As it is, we’re dallying behind procedure while irreparable disaster spreads. Currently, it could be in BP’s financial interest to continue trying the easiest, least expensive potential fixes to the leak, even if this means that the leak will continue gushing for several months more. Why? Because the main financial threat is lawsuits, and those can take a unjustly long time to conclude, allowing BP to plan for them. And the example of the Exxon Valdez case suggests that, years from now when the litigation ends, plaintiffs might get very little money anyway.

Or perhaps politicians’ indignation and hand-wringing (aka hand-washing) is good enough?

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2 responses to “Gov’t should clean oil leaks & bill the drillers

  1. Given that it is the oil companies that are making record profits, even (or especially?) in a difficult economy like this one, they should indeed have some monetary inducements to pay out when things go wrong. BP says that it will compensate all the individuals whose livelihoods are damaged – but of course, even if they pay for the clean-up and compensation, they won’t pay a cent for the environmental damage in and of itself.

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    • Regardless of how much money they end up paying and how it is directed, they cannot restore the lives lost (human and other), replace fisherfolk’s impending years of dislocation, and so forth. Money is the main inducement that corporations understand, and payments from lawsuits and fines can ameliorate the effects of a disaster. But, once tragedy has occurred, nothing can make things completely right. Our primary concern should be to prevent such widespread calamities and, once they’ve occurred, to work at full force to limit their effects. Establishing blame and making the culprits pay is vital, too, but, on my list, it’s third.

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