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Who will pay?

If YHB were a better blogger, you know, this post would be full of links. First of all, I would link to the radio show I was listening to (a week ago, perhaps? If I were a better blogger, I would have written this that day), and then to the fellow who was on it, and then to other people making similar statements, so that it was clear that there was something to be on about. But I can’t remember who was interviewing who, on what show, and frankly I can’t be bothered to search for other people saying similar things. So you should take this with a grain of salt—perhaps I imagined the whole thing.

But I’m pretty sure that a legislator from my Party, a member of the U.S. House, I think, was asked about raising the liability of oil companies when they poison the world. And this person, this legislator, said that we do want to raise that limit, so that any company that was proposing to do offshore deep drilling would have to set aside an enormous sum of money to clean up any damage they caused. And the interviewer, who I am pretty sure was a NPR or APM anchor at one of their top news shows, asked this legislator whether that was worth the rise in gas prices at the pump, because of course the costs would eventually be passed on to the consumer.

And the fellow just muffed it. Just utterly muffed it. Said that he hoped the added safety incentive would mean that there wouldn’t be more spills, so that would be all right. And it seems to me that is a terrible, terrible answer.

But I’m not sure if my immediate answer was the right one. That is, I know it’s logically right, but I don’t know if it’s persuasive. Mine went something like this:

The clean-up is going to happen. We aren’t just going to wade in crude. So the money is going to be spent. What I’m asking is who is going to spend it. Now, you are right that if the oil companies spend the money, then that is ultimately going to come out of the price of gas. But if they don’t spend the money, and we spend it ourselves, through the government, then that money is going to come out of your taxes. The money isn’t going to be magically created, just because we want to spend it; it is going to come from somewhere. You will pay at the pump, or you will pay in your withholding, or if the money isn’t spent and we don’t clean it up, then we are really going to pay.

I mean, the basic truth of the matter is that if you can’t pay for it, you shouldn’t do it, and that is true about drilling as well as everything else. And if that means nobody can afford to do it, then nobody can afford to do it, and it shouldn’t be done. I’m always amazed by the feeling that companies have a right to do business even if they cannot possibly pay for themselves, and that when the government demands that a company pays for its own debts, it is the government that is running the company out of business.

But what struck me about the whole thing was that the interviewer seemed to be working under the assumption that either the public would pay at the pump or they wouldn’t pay at all, and the legislator seemed to let that go. And that’s a problem for my Party, not just for this piece of legislation, but for the ongoing purpose of the Party. And in this case, it was my Party, acting in accordance with its principles, that was against paying for a solution through taxation, and for private industry taking care of it. And the fellow just let that opportunity pass. Gr.

Unless, of course, I’m misremembering the whole thing. But I’m still cranky about it.

Tolerabimus quod tolerare debemus,


Hm. I think the question posed here cuts in another direction, which is this: the key thing that we accomplish by raising the limit is not getting companies to set aside enormous amounts of money. The key thing we accomplish is that we give the companies a very significant incentive not to cut corners on environmental safety, as BP is already known to have done, and not to drill wells they don't have the know-how to cap off in case something goes wrong. The cost to the company of following sound and conservative business practices is tiny next to the cost to the country of an environmental catastrophe like the one we are now suffering.

[The short answer ends there, but, given an opening, one might go on to say.

The companies will also set aside funds, or purchase rather pricey insurance, but again, those costs will be less than the cost of a disaster of this kind. Just as important, _everyone_ who benefits from the oil will share a little of these costs, as the companies pass them on into gasoline prices. As things stand now, most of the price is paid by the workers who are killed when rigs explode and by the citizens of the Gulf Coast, whose livelihoods are being destroyed, while the rest of us only worry about whether the price of gas might go up as a result of this. This environmental catastrophe shows that the price of gas was already too low--if we were paying for the cost of sound drilling practices, this colossal mess could have been avoided, as such messes were avoided for 40 years between the passing of stringent environmental regulations for drilling in 1969 (after the Santa Barbara spill) and the gutting of those regulations by the Bush-Cheney administration over the past eight years, which created the conditions of lax oversight and permissive permitting that enabled BP's reckless disregard of environmental safety.

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