BP's oil spill in the Gulf of Mexico is a political failure

posted 30 May 2010, updated 30 May 2010

The ongoing oil spill from BP's well in the Gulf of Mexico is a tragedy. A human one -- 11 lives were lost in the initial explosion -- and an environmental one; the heartbreaking pictures (via) are already emerging, and there will be more.

There's a lot of public anger over the spill, mostly directed at BP itself, brilliantly captured by the BP Global PR Twitter feed. And there's a lot to blame them for. As the New York Times reports, BP officials knew weeks in advance that there were problems with the rig and had deliberately scaled back the rigorousness of the federally-mandated testing they were doing on the rig -- a very unusual practice; usually the tests get more and more strenuous. They knew something was up.

The Wall Street Journal (free article) has a lot more detail: they chose an inherently risky well design, skipped a lot of standard safety checks, ignored best practices, and were in an almighty hurry to get things finished. Furthermore, they might even have avoided loss of life: there's unsubstantiated rumours on the internet that a subcontractor on Deepwater Horizon ordered all their personnel off the rig 6 hours prior to the explosion because they believed it to be unsafe. If BP had listened to them, they could have evacuated. It's a scandal.

But as I started saying in this thread on Hacker News, it's not really BP we should be angry at. It's not their scandal. BP, Transocean, even Halliburton, were all just doing what was in their best interests. Relief wells such as the one they are hurriedly drilling are enormously expensive, and skipping them makes the cost of drilling the many unsuccessful wells necessary to get a profitable well going much less. Even the enormous costs of cleanup of this leak will probably not outweigh all the money they saved over years of risky practices.

The real problem here is political. The only way to get the oil companies to take the externalities of drilling into account is to force them to do so; economic self-interest is in favour of destroying the environment. The Minerals Management Service, the regulator in charge, was obviously corrupt and completely in the thrall of the oil companies.

So when the leak is plugged, and the decades-long task* of oil cleanup is underway, remember to direct your anger prudently and productively at the politicians in charge, the ones capable of pushing legislation forward that will create a stronger and more independent regulator. Yelling at BP and taking their money is emotionally satisfying, but will not fix the real problem. Destroying the environment must become more than merely expensive; it must be criminalized. Oil executives will think twice about approving risky drilling practices if they know they will personally go to jail if it fails.


* Cleanup of the Exxon Valdez spill, which happened in 1989, is still ongoing.

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