A gush to judgment 

The oil spill in the Gulf of Mexico is over two weeks old, yet we are still struggling to determine why it happened and what its effects will be. This hasn’t stopped opportunists from demanding action now to prevent something like it happening again. Meanwhile, another set of opportunists condemns President Obama for his slow reaction. Given this charged atmosphere, we need to take stock of what we know—and don’t know—and consider what an ill-considered reaction would entail.

First, we need to keep at the event in proper perspective. As Matt Ridley points out, oil spills are currently at historically low levels.  Even at the alarming rate of 5,000 barrels a day released into the sea, the spill is unlikely to be the worst spill ever recorded in the Gulf. Moreover, Mother Nature herself pours about 3,000 barrels of oil into the waters off the United States each and every day, in a process known as natural seepage. That will be cold comfort to Gulf state residents, but we should be grateful that modern drilling methods have actually significantly reduced the amount of oil spilled, not increased it. The Deepwater Horizon accident is a calamity, indeed, but of an increasingly rare kind.

Second, the President is right to say that those responsible must be held fully accountable for the damage they have done to others’ property rights. Perhaps the single best method of environmental protection is not the threat of fines and imprisonment from the EPA, but the settling of damages and the threat such liability poses to a company’s bottom line. (Some have suggested that, aside from cleanup costs, BP might have its liabilities capped at  $75 million by a 1990 law. If so, then the discipline involved in minimizing damages may have been weakened and this law should be reconsidered.)

Costs should be borne by the guilty and not the innocent. Just last year, the EPA exempted BP from an environmental impact report on the effects of a Gulf oil spill because the event was regarded as extremely unlikely. Now it’s happened, but it’s probably still unlikely to happen again. Thus, we should avoid imposing onerous new regulations on an entire industry because of the negligence of one actor.

Finally, we must not forget that life is a series of trade-off involving risks, and that oil drilling is an inherently risky operation.  Sen. Dick Durbin (D.-Ill.) has said, “I think there's serious questions now in people's minds on whether or not offshore drilling is the kind of investment that's completely easy and fault-free.” This statement borders on the fatuous. Oil extraction is a dangerous occupation that entails significant risks, but which delivers one of the most potent forms of energy we have at an affordable price to the consumer.

If we seek to reduce these risks by banning offshore drilling, as some now demand, we will undoubtedly raise the price of energy. That creates its own risks: increased consumer costs, further economic stress, job losses and hardship—all of which lead to worse health and reduced well being. The spill has been bad enough already. A legacy of more expensive energy would only make the disaster worse, and endanger our national welfare will be badly affected.

We should not forget that 11 people died on April 20, when the explosion that started this chain of events occurred. Those 11 people risked—and lost—their lives in a brave and noble effort to secure more energy, energy which Americans use as the basis of efforts to create greater wealth and greater welfare for their children, colleagues and neighbors. If we forget their efforts and ban the occupation they chose, it will not be a memorial to their loss, but a final insult.


Iain Murray is Vice-President for Strategy at the Competitive Enterprise Institute

About The Author

Iain Murray

Bio:
Mr. Murray is a contributor to Examiner Opinion Zone and is Vice-President for Strategy at CEI. He is the author of the best-selling book on environmental policy, "The Really Inconvenient Truths," and specializes in energy, environment, finance, trade, and science and technology policy. He is also an expert on... more
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