By Bill McCabe — As published in Hudson Valley News
After two months of crude oil gushing into the Gulf of Mexico, now estimated by government scientists at an astonishing 2.1 million gallons per day, British Petroleum joins an infamous list of multi-national companies demonstrating high levels of corporate greed and insensitivity to the common good.
BP joins the corporate irresponsibility of Enron in California, Exxon in Alaska, Texaco in the Amazon, the investment banks on Wall Street, GE in the Hudson River, and Union Carbide in Bhopal, India. Motivated by the urge for more and more profits, these entities have brought economic environmental and/or economic ruin to so many who mistakenly trusted large corporations to do the right thing. These corporations, as well as others over the years, took short cuts, put lives in jeopardy, and did their best shift blame.
BP is one of the most profitable corporations (with $240 billion in revenues and $17 billion in earnings in 2009 according to the NY Times) in an industry that churns out more profits than any other industry in history. The oil continues to gush, more beaches and wetlands are destroyed each day, and experts warn that by late August the Atlantic seaboard from the Florida Keys to Long Island and Cape Cod can expect oil slicks on the beaches, bans on fishing, and contamination of wetlands. BP, with the collaboration of Halliburton’s faulty concrete and Transocean‘s faulty “failsafe” systems, took advantage of the deregulation policies instituted in the Bush-Cheney years and chose reckless risks to enhance profits.
In a rush to turn profits, BP reportedly saved about nine million dollars by not installing a safety barrier to stop the flow of gas in the area around the tubes in the well. This decision, along with a series of improper maintenance decisions, contributed to the April 20th explosion of the Deepwater Horizon rig.
Where does that leave us now? By contract, according to BP’s permit with the government to drill in the Gulf, BP is entirely responsible for the costs of the cleanup. President Obama is so right in insisting that before it pays out any dividends BP should establish escrow accounts to pay people and businesses in the Gulf States that have been ruined economically by the spill. While stalling on its public promises to be financially accountable to the people hurt by the Gulf disaster, BP has spent over $50 million on ad campaigns trying to promote a more positive image of itself.
Robert Reich, who was Secretary of Labor in the Clinton Administration and now teaches Public Policy at the University of California at Berkley, has suggested that BP should be taken into temporary receivership by the federal government to insure that all BP’s efforts are in the interest of the common good rather than the good of BP stockholders; this receivership would last only as long as the crisis continues and would motivate BP to act much more quickly in its cleanup efforts than has occurred during the first two months of the disaster.
Beyond the immediate clean-up efforts of BP and the federal/state governments, much better procedures must be put in place to regulate deep water drilling. First of all, until guarantees can be provided against a repeat of the Deepwater Horizon disaster, President Obama should make permanent
the ban on deep water drilling, including requirements for the gas safety barriers and the drilling of parallel pressure relief wells as is now mandated in Canada. BP will not complete its relief wells until August, some four months after the explosion.
Next, as proposed by Senator Gillibrand (D.NY) and eighteen other senators, the country needs a bipartisan investigative commission with subpoena powers to discover the truth about BP’s actions and recommend strong, sensible, effective regulations for off-shore drilling administered by a new INDEPENDENT regulatory agency to replace the incompetent Minerals Management Service, which has egregiously allowed the oil industry to police itself, literally write its own rules, and avoid compliance with safety regulations. The MMS should simply be dissolved.
Another worthy proposal in Congress mandates an increase in the caps on liability for oil companies to cover the clean-up costs of oil spills. Current law, established after the Exxon Valdiz spill in Alaska, limits liability to a mere $75 million – a mere fraction of the real costs of the Gulf spill.
Currently, under federal law, if BP is ever found guilty of criminal negligence, that corporation might be able to avoid paying restitution to the victims of the BP spill, even to the families of the rig-workers who died on April 20th or to the fishermen who have lost their livelihoods. Senator Leahy (D.VT) has proposed the Environmental Crimes Enforcement Act, which would make restitution mandatory and increase sentences for those convicted of criminal acts against the environment.
Most importantly, the Senate should pass a meaningful, comprehensive energy and climate bill such as the House of Representatives passed in June of 2009! We have had nearly forty years of debates, promises, and proposals in Congress about energy independence and the need to develop viable alternatives to oil and coal. Immediate action in the Senate is what we need to get us beyond the need for deep water drilling and companies like BP.