7 Ideas for Armchair Oil Spill Regulators

With the Deepwater Horizon's oil still hovering off the coastline, a legislative rush is on to "do something!"

Here are a few suggestions:

1. "No secrets" policy for disasters.
Congress should forbid companies from preventing employees from leaving the scene of an accident without signing a waiver of their ability to say what they saw or claim injuries. That's grotesque, and it gets in the way of preventing future similar disasters. Congress should also require that any chemical -- dispersants in particular -- that can be put in federal waters must list ingredients and toxicity publicly. If other ingredients are being added to the dispersant, they should also be listed. (This Greenwire article suggests they're using a more toxic, less effective dispersant than the best on the market. In effect, allowing information blackouts creates market failures that prevent the development and sale of safer, better products.)

2. Drill here often? Then register your ship here, too--and pay some taxes.
I noted yesterday that though Transocean was in fact a company largely formed in Houston, it registered itself in the Cayman Islands so it didn't pay U.S. taxes. In 2008, company brass moved to Switzerland, avoiding U.S. income taxes as well. Even more problematic, their drilling ships are registered in the Republic of the Marshall Islands, which is officially responsible for inspections but actually leaves the work up to a classification society. Under the Jones Act, only U.S.-owned ships can do coastal shipping. Do we want to allow "non-U.S. rigs" from "non-U.S. companies" to drill off our coasts?

3. Increase liability and require outside insurance.
Congress is already taking steps to increase the liability for oil spills from drilling above the current measly ceiling of $75 million. It would be even better to follow the model of OPA 90 (which followed the Exxon Valdez spill) and require all drillers/leaseholders to hold insurance for that liability, part of it provided by an outside party. Not only does this assure the public that the costs of a spill will be paid, it also means that insurers get in on the act of monitoring safety and risk and influencing corporate behavior.

4. Charge real money for our oil.
U.S. taxpayers are missing out on a lot of oil revenue because we charge far less than other countries for the extraction of our oil. Our offshore lease terms are so generous to the oil companies that according to the GAO, U.S. revenues for oil in the Gulf of Mexico were the 93rd lowest out of 104 countries, meaning we may be missing out on hundreds of billions of dollars in oil royalties when prices are high. A 2007 Wood Mackenzie study found that while some governments' take for a barrel of oil at that time was $98, U.S. citizens were receiving only $44.09 per barrel of Gulf Coast oil.

Presented by

Lisa Margonelli is a writer on energy and environment. She spent four years and traveled 100,000 miles to write her book, "Oil On the Brain: Petroleum's Long Strange Trip to Your Tank." More

Lisa Margonelli directs the New America Foundation's Energy Productivity Initiative, which works to promote energy efficiency as a way of ensuring energy security, greenhouse gas emissions reductions, and economic security for American families. She spent roughly four years and traveled 100,000 miles to report her book about the oil supply chain, Oil On the Brain: Petroleum's Long Strange Trip to Your Tank, which the American Library Association named one of the 25 Notable Books of 2007. She spent her childhood in Maine where, during the energy crisis of the 1970s, her family heated the house with wood hauled by a horse. Later, fortunately, they got a tractor. The experience instilled a strong appreciation for the convenience of fossil fuels.

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