An American Oil Spill

When accidents happen, there is always enough blame to go around, and with the Deepwater Horizon oil spill in the Gulf of Mexico, no one has been spared – with the exception of one of the main culprits, the American public.

When accidents happen, there is always enough blame to go around, and with the Deepwater Horizon oil spill in the Gulf of Mexico, no one has been spared – with the exception of one of the main culprits, the American public.

Within a few hours of the accident, critics trained their sights on all the usual suspects: the Minerals Management Service, for giving BP a pass on routine inspections and lapsing into a relationship with the oil industry that United States President Barack Obama denounced as “cozy”; Obama himself, for having failed to enact the reforms at the Interior Department that he had promised while campaigning for election; the oil services firm Transocean, for the faulty blowout preventer; and, of course, BP, for a “lax” and even “reckless” safety culture.

After weeks of swirling wrath, primary responsibility eventually landed on BP’s shoulders. At hearings before a US Senate subcommittee, BP CEO Tony Hayward’s evasive maneuvering and failure to answer point-blank questions infuriated Congressmen and the American public alike.

His expression of “contrition” may provide some relief that the key culprit has been fingered, but it brought the sealing of the well no closer.

Furthermore, the situation in the Gulf of Mexico is worsening.  Oil is not leaking at the rate of 1,000 barrels per day, as BP originally estimated, nor up to 19,000 bpd, as calculated by the Flow Rate Technical Group. As a newly released BP internal document revealed, the actual flow is up to 100,000 bpd.

While there is no denying that the accident will create a long list of victims – the residents of the Gulf states being among the worst affected – the American public also is to blame. An historical addiction to cheap gasoline, and opposition to energy reform as “un-American,” has fueled an obsession with drilling, damming, and digging the country’s way out of problems.

This emphasis on the supply side (increasing access to energy fuel) has obscured cheaper and possibly more beneficial actions on the demand side (cutting energy consumption by changing people’s behavior).
For example, while Americans could have supported more aggressive fuel-economy standards or increased federal taxes on energy, they didn’t.

Under the illusion that lifestyles revolving around cheap oil and big cars were America’s perennial right, fuel-economy standards languished for decades, and politicians avoided the t-word like the plague.

All the while, Americans have been enjoying the cheapest gasoline in the developed world. The country failed to anticipate the rise of China and India, whose exponential demand growth would have obvious implications for global energy prices.

Instead, the supply-demand gap has been partly bridged by increasingly sophisticated engineering techniques.

Technical feats like three-dimensional seismic imaging and tube-rotary drilling are no doubt impressive, but they are problematic when unaccompanied by adequate emergency-response plans or the regulatory oversight needed to ensure that accidents are prevented and mitigated.

This is plain to see today, and it resulted in Obama’s knee-jerk imposition of a moratorium on deepwater drilling permits and suspension of existing projects in the Gulf of Mexico.

While a regulatory overhaul of offshore drilling procedures and policies is clearly necessary, it will be insufficient to reduce the risk of spills and accidents if it is not accompanied by other demand-side measures.

For example, now is the time to begin reducing US oil demand through improved fuel-economy standards and/or progressive increases in fuel taxes. Both may be necessary, because, while average fuel economy has made slight gains in recent years, the longer distances that people are traveling have offset any improvement.

The government also could start aggressively pushing a shift to electric vehicles. In terms of total lifecycle costs, these vehicles are three to six times more energy-efficient than their petroleum counterparts. People could make even simpler changes to their lifestyles by properly inflating their tires, driving more slowly on the highway – a car is most fuel efficient at about 55 miles (90 kilometers) per hour – and abandoning their SUVs.

The mantra of “opportunity found in crisis” has been uttered endlessly over the course of the Deepwater Horizon disaster. But seizing that opportunity requires moving past blame, learning from mistakes, and identifying how best to achieve a sensible, long-term national energy policy.

If Americans want a future without other Deepwater Horizon-style accidents and oil-tarred wildlife, they must reduce oil demand, in addition to ensuring that oil production is carried out responsibly and safely.

Anthony D’Agostino and Benjamin K. Sovacool are researchers at the Centre on Asia and Globalisation at the Lee Kuan Yew School of Public Policy in Singapore.

Copyright: Project Syndicate, 2010.

 

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