Lessons to be learned from the Gulf oil spill

By A. Dan Tarlock [via Chicago Daily Law Bulletin, June 03, 2010, Volume: 156 Issue: 10]

The Gulf of Mexico oil spill is the first major environmental disaster to take place in the perfect storm of a poisoned partisan political environment and a 24/7 news cycle.

It will take time for a clear answer of what combination of inadequate technology and human miscalculations caused the blowout. It will also take years to assess the long-term and permanent ecological impacts of the spill on the Gulf Coast as well as the open ocean. What is clear is that the ground rules of the politics of government and industry response have dramatically changed, lessons that BP, the administration and President Obama are learning as the oil continues to spew.

The major policy lesson is that the current legal regime for spill response needs to be rethought from the ground up. The reasons are not that the regime is unresponsive but that it was not designed for a spill of this magnitude and everyone has been lulled into complacency because of performance of offshore drilling.

Since the 1969 Santa Barbara spill, which helped turn environmentalism from a fringe into a powerful political movement, offshore spills have accounted for only about 10 percent of the some eight to 10 million gallons of spilled oil. In the United States and worldwide — excluding the damage to Kuwait’s oil fields caused by Iraq that led to the first Gulf War — the major oil disasters have been tanker accidents.

Oil spill liability has long been part of the federal Clean Water Act. The scheme is premised on five assumptions, three of which have so far proved incorrect and the fourth has been in question for almost a decade.

The first assumption was that operators, such as BP, had a sufficient profit incentive to invest in the best available well safety and blowout prevention technology and to monitor its selection, installation and use.

Lawyers, led by Kirkland & Ellis, will rake in millions trying to decide just how these assumptions went wrong and who is responsible for the technology selection, installation and monitoring errors that appear to have caused the blowout.

The second was that the operator of the well or facility would be responsible for stopping the spill and had the capacity to do so in a relatively short period of time. The well off Santa Barbara was capped in 11 days.

The United States leases the rights to produce oil and gas on public lands, including the Outer Continental Shelf, but it does not have the capacity to take over the efforts to stop the spill, as many are demanding.

Apparently, no lessons were learned from the 1970 Ixtoc spill in Mexico. It took 11 months to cap an exploratory well drilled by Pemex in the Bay of Campeche, which blew out and spilled three million barrels of oil. The spill contaminated more than 162 miles of beach in Texas.

The third assumption is that the government, led by the U.S. Coast Guard, is capable of coordinating the spill containment and clean effort.

The fourth is that the long-term ecological impacts of a spill are not as bad as the pictures of oil-soaked and often dead wildlife that appear on television and the Internet. Scientists studying the lingering impacts of the Exxon Valdez spill have questioned this assumption for almost a decade.

In short, BP is winging it, the federal government (and the media and public) can vent but has no alternative but to hope that BP can pull it off. The federal government did implement the contingency plan for spills but it is clear that the response was inadequate, given the unprecedented geographic scale and volume of the spill.

The last assumption is that operator’s liability, backed by the industry-funded Oil Spill Liability Trust Fund, will fully redress the public and private damages caused by the spill. Time will tell.

Environmental law has always been reactive, and disasters such as the Santa Barbara oil spill, Love Canal and Chernobyl have created the political will to adopt new regulatory regimes. In the aftermath of the current Gulf oil spill, there will be reform of offshore leasing and drilling.

The big question is whether there will be serious national debate followed by congressional action to move to a less carbon-dependent energy policy.

The political lesson that the Gulf of Mexico oil spill teaches is not uplifting. As long as the United States is locked into an oil- and carbon-based energy policy, there is little the federal government can do except to try to redress the decades of the under-regulation of environmental and social impacts of energy production.

In the meantime, President Obama and administration officials would be wise to learn from the digital age that they so love and from former President Bill Clinton.

From the digital age, they have to learn to react in real time. From the former president, they have to learn to react with empathy and keep reacting. Cool and competent do not cut it a crisis of this magnitude. Controlled rage and pain do, provided BP can cap the well.