I think the oil spill is one of those news stories (similar to Katrina and Haiti) that has lingered. And it has lingered so long that eventually it becomes un-newsworthy. "It's boring. We've heard/read it all before." We would rather talk about Elena Kagan, Greece, or Tiger Woods' injury. At least we haven't read those stories before. But news stories linger for a reason, because they are important and have lessons to teach.
Down at the bottom of Mr. Krugman's column, there is a reference to Obama's commencement speech at Michigan. The President is quoted as saying
"Government is what ensures that mines adhere to safety standards and that oil spills are cleaned up by the companies that caused them."But, is it too much for me to ask that our government not only react but also be proactive? Not only make BP clean up for their mistake, but make sure another mistake is less likely. I expect my government to regulate and do it well. The notion that somehow government does too much regulation has certainly been destroyed over the past few years. If we take an honest look at these disasters (economic, social, and environmental), we cannot rationally come to the conclusion that our government does too much regulating.
Thanks for reading my little mini-rant. The moral of this blog however is that Paul Krugman is tight. Read his stuff and do it frequently.
Law school is over. I hope everyone can make it to my graduation party on Sunday May 23. If you just want to stop by and say hello, I won't be offended.
That's all for now. Thanks.
You are preaching to the choir on this one, when it comes to environmental regulation I really do believe that we need more regulation and we need it fast.
ReplyDeleteI was watching Meet the Press yesterday and they showed a clip from the show back in 1989 soon after the Exxon spill. The head of the EPA then, William Reilly was asked about whether Exxon had done its job and whether the clean-up was sufficient. He had no quoms about saying that the Federal Government would exercise its power under CERCLA (federal environmental law enacted to respond to releases of hazardous substances, like oil) and finish the clean-up if needed and then charge Exxon the costs for that extra clean-up. i think its interesting for people to know that if say Exxon or BP couldn't afford the extra clean-up that there is a "fund" established to cover those costs--the fund is rarely used because there is not enough in it to clean-up even small sites.
Despite his comments, the former administrator never said anything about being proactiv, well at least in the short clip. It's interesting because you would think that potential clean-up liabiilty in the billions of dollars and potential fines of $25,000 a day for failing to clean-up a site would be enough of a deterrent for oil companies to take the necessary precautions. But maybe its not enough.
I guess one positive thing from this disaster is that this highlights how dangerous off-shore drilling can be. Even if its rare that this sort of mass spill happens, I'm convinced now that its brought attention to a serious issue. I think it will be hard for anyone to argue that continued regulation at the same level is an acceptable choice. Maybe now, as it seems inevitable that we drill off the coasts, the proper regulations will be put in place. But we shall see...
Al, I pretty much agree with everything you are saying. Plus, I trust your opinion on this stuff because you know lots more about it than I ever will. BUT, I think it's naive to think that fines are ever going to be enough, and that statement applies both to oil spills, subprime mortgage lending etc.
ReplyDeleteThese companies do not care about fines. Those are risks that they are willing to take all day long. So what? Once in every 10 yrs they are responsible for cleanup costs? That means nothing to them. It's time to get serious about regulation.
Honestly, I have BP stock, and I remember telling you that I wanted to sell it. Then like the very next day this spill...it was like God just confirming my thoughts. Haha. I am definitely selling it now. No doubt.
Also, Al, I think we have had the convo before that you are more in favor of offshore drilling than anyone would expect? Am I remembering this correctly? Does any of this news change your mind or affect your thinking?
This news defintely makes me think. I kind of elluded to it in the last paragraph of my post...I think at first I thought well yes, really really bad things like this happen but that's not necessarily a reason to stop developing off-shore drilling technologies, etc. But, I think it is a reason to reconsider our plan and take into account the possiblity that these sorts of disasters can happen. More importantly, what measures can we take to prevent this from happening. I guess the environmentalist in me wants to know why I should support off-shore drilling as a means to get us off foreign oil when it obviously poses great risk to aquatic ecosystems,etc.
ReplyDeleteI want the government to explain how they are going to prevent this from happening again, and why the government should be spending more money on developing safer off-shore technologies, etc. than on renewables which don't pose the same risk. I'm not really sold on off-shore drilling but was open to the idea of it. Should be interesting to see if the federal government can still make this idea work.
I too read the NY Times, although more for the Howard Becks and Jonathan Abrams of the world, but I know Krugman is a smart guy and usually gets me thinking one way or another.
ReplyDeleteHowever, I find it a little lazy he puts this Bush. It's too much a safety net. I mean is the Jodi O'Brien situation Bush's fault too? Obviously I'm kidding but there's some half truth there. Krugman eventually gets to his point which is fine, but he really gives no solution other than restructuring the Minerals Management Service.
Alex and Jon are correct that it would be nice for action instead of reaction, but it's like you both alluded to - BP will take the risk for this happening once every ten years, BUT so will the government - no matter how big their role is. Too much money involved and no real alternative to offshore drilling
Good blog post
Egel, I see your point about Bush. When I first started reading the column, I thought it was going to be basically a Bush-bashing piece...honestly, I'm tired of those though. But, Krugman comes through, like always, and ends up making really great points about our government, which should be applicable to both past and future presidents.
ReplyDeleteNot sure if any of you have the opportunity to watch tv at 11am today like me (yes, feels so good), but you should see these three executives for BP, TransOcean and Haliburton that are testifying before Congress. They are just dumping on each other like there is no tomorrow.
TransOcean is the subcontractor that ran the right.
Haliburton did some cement work on the rig a few days before the explosion.
So, BP is on the hook for the cleanup costs regardless. BUT, what they are arguing about now pertains to future liability. All three of these companies are worried that they will be liable for the damages caused by the spill. While cleanup costs are really high, they might be just a drop in the bucket compared to the future costs involved in litigation.
Last note: I saw an article that discussed the fact that safety standards on oil rigs have not been significantly changed in twenty years.
Whoops, I lied. One last thing: Some people were complaining to me that they never knew when I put up new blogs or when there were new comments. So I added some of you that seemed interested to the list of people who get email notifications when there are new blogs/comments. I thought it would be an easier way to keep everyone up to date. If you are annoyed or your inbox is being flooded by a bunch of random comments, let me know, and I'll take you off the email list.
Thanks!!
Very enlightening conversations. I wish I had more time to be smart like the 3 of you. I need to exercise my brain more. But I'm glad there are people with comphrensive, thoughtful opinions that they can put in words. Bravo!! On that note I'll throw in my oil spill connection. Impressions sends all our cut hair to Matter of Trust, which creates hair mats to soak up the oil. It is a pain to ship the hair off every few weeks, but we really feel we are helping. Love to you all. Andy and Alex, see you at the graduation party. Congrats to both Alex and Jon for completing a long road!
ReplyDeleteInteresting that I just found this link: http://www.cnn.com/2010/US/05/12/oil.spill.main/index.html?hpt=T2 (Sorry, I'm not sure how to hyperlink in the comments. Can you even do it?)
ReplyDeleteAnyways, the article says Obama wants to increase the tax on each barrel of oil by 1 cent, up from 8 cents a barrel to 9. This tax goes into the Oil Spill Liability Trust Fund. He also wants to increase the incident amounts that the fund is allowed to pay.
I'm not sure this fixes anything. Like I was saying previously, how does any of this help prevent future spills/disasters? Why should the oil companies be allowed to reduce and spread out the risk? There is no incentive for any one company to step up its safety standards if they are required to share the risk just like everyone else.
Also, toward the bottom of the article, there is very interesting fact. BP is only legally obligated to pay economic damages up to $75mil. There is something wrong with the fact that we have a cap on the economic damages that oil companies have to pay. Meanwhile, BP's profits for the FIRST QUARTER of 2010 were about $6 billion.
Mom, I was going to mention the hair mats thing. I think that's really cool.
BTW, longest comment thread ever? Maybe I'll get a new blog up here in the near future.