Brief Thoughts on the Oil Spill

Haven’t been blogging on the spill, because I know next to nothing about deep sea oil drilling or cleanup. I do want to echo a bit what John Cole wrote here; the situation that we’ve produced for ourselves is one in which, unfortunately, we have to depend on BP to handle the problem. BP has greater familiarity with the area and with the particular mechanics of the well than any other actor, and certainly than any actor in the US government. There are engineers outside BP with similar levels of expertise, but they all pretty much work for big oil companies, too. This post in particular struck me as ill-conceived:

The administration has been keeping an ecological criminal in charge of the crime scene during a national crisis. Seventeen nations have offered assistance — but “the final decision is up to BP” to accept it, according to the State Department — and only Canada, Mexico and Norway have been allowed to help so far. The law — Title 33, Section 1321 — mandates that President Obama “shall direct all Federal, State, and private actions to remove the discharge,” using any means necessary. There are not any resources — people or equipment — that Obama doesn’t have the authority to seize and put into service.

It’s certainly fair to expect that private sector resources may be needed for this disaster, but BP’s only unique qualification for the disaster response is that it is the perpetrator. Although BP is by default a party responsible for implementing the cleanup plan, it is by no means the only possibility. The rig was operated by Transocean; the cementing done by Halliburton; the blowout preventer built by Cameron. Other companies involved in ultra-deepwater drilling include engineering giant Schlumberger, Norway’s nationalized oil company Statoil, Shell, and Chevron.

If the Navy can’t direct the undersea mission after it’s given authority over any needed private resources, it calls into question why we entrust it to operate aircraft carriers and nuclear-armed, nuclear-powered submarines.

The last bit is particularly idiotic; the Navy can operate aircraft carriers and nuclear armed, nuclear-powered submarines because it has trained for decades to do so. It can’t cap oil spills because it hasn’t spent years incorporating that capability. It might be a good idea for the USN to focus more on this particular kind of disaster management, and indeed I think that such focus would fit rather comfortably into the broad outlines of CS-21, but nevertheless.

The second problem is that all of the potential alternatives are also private companies, all of which have less stake and less interest in the situation than BP. It can fairly be argued that BP has done poorly thus far and has not exhibited a sufficient degree of urgency, but there’s little reason to think that Shell or Chevron, with no particular interest in the disaster, would proceed with any additional urgency. Options such as nationalizing BP make more sense in the medium term, but not much in the short. Indeed, the threat of nationalization is probably more effective than actual nationalization, until the crisis is over. If BP believes that US assets are at stake (rather than already gone), it might pursue cleanup operations with additional vigor. Seizing the relevant assets of the company now (“There are not any resources — people or equipment — that Obama doesn’t have the authority to seize and put into service,” as Brad puts it) doesn’t mean that the people with expertise will have an interest in working for the US government, or that they’ll work faster for the government than they’d work for BP.

So what are Obama’s failures in this case? I can think of a few off the top of my head:

1. While it’s fair to blame the Bush administration for leaving the MMS a shambles, acknowledging that the service was gutted doesn’t spare Obama. One of the core functions of the Obama administration from the beginning should have been identifying critical nodes of governance that Bush and his cronies had essentially destroyed, and capabilities involving mineral extraction should have been the first place that they looked. It’s not as if mineral extraction was a small sideshow in the Bush administration’s effort to destroy government oversight capability; it was the main feature. From all indications, the Obama administration failed to note this or to do anything productive about it until too late.

2. The Obama administration could have and should have adopted a more adversarial tone towards BP in the immediate wake of the disaster. Such a tone might have conveyed the gravity of the situation, and perhaps convinced BP to treat the spill as a genuine disaster rather than as a PR problem. I don’t have a clear sense of what could have been done in the early period that wasn’t, but then neither did the administration.

3. Obama’s decision to open more areas to offshore drilling is going to go down as one of the great “own goals” of American political history. It was a stupid, ill-informed decision that he made in order to undercut Sarah Palin and other Republican energy policy critics. While it’s fair to acknowledge that Obama couldn’t have known that the disaster would happen in such a short time frame following the announcement, he surely must have understood that more offshore drilling would result in more disastrous spills. Instead of being able to utterly gut the GOP energy position, he’s left apologizing for it. Stupid, stupid, stupid….

4. Obama also missed an opportunity to make a philosophical distinction between Republican and sane approaches to economic regulation. In this case, BP was allowed to engage in economic behavior that ran the risk of massive, widespread destruction and that was not, apparently, reversible even by BP’s own internal engineers. This should have resulted in a fantastic case study for why certain economic functions ought never, ever, ever to be left in the hands of minimally regulated private industry. Unfortunately, because of the aforementioned opening of additional areas to drilling and because of a wider Democratic unwillingness to make sensible arguments about governance, private industry, and regulation, this opportunity is being lost.