A Crisis of Competence in the Gulf

Heritage Foundation

"Worse, Obama administration regulators continue to deny Louisiana officials permission to build up barrier islands between the coast's marshes and the gulf. " "Let's be clear: Every day that this oil sits is one more day that more of our marsh dies," Gov. Bobby Jindal (LA) said Monday. "We've been frustrated with the disjointed effort to date that has too often meant too little, too late for the oil hitting our coast," he continued. Specifically, Jindal is frustrated by the failure of the federal government to produce the 8 million feet of oil-blocking booms it asked for back on May 2nd and 3rd. So far Louisiana has only received 815,000 feet of boom, and even then the federal government has failed to place it in the correct locations.

Worse, Obama administration regulators continue to deny Louisiana officials permission to build up barrier islands between the coast's marshes and the gulf. Federal regulators have so far refused to permit the state to act, fearing the unintended long-term damage to local wildlife. So instead of action, the oil continues to float on shore threatening the livelihoods of millions of Louisianans.

Meanwhile the Environmental Protection Agency again demonstrated its uselessness when it informed BP it had 24 hours to find a less toxic alternative to the chemical it had been using to break up the oil. BP informed the EPA that no alternatives were available in sufficient quantity to deal with the spill, and when the EPA's deadline came and went with no change in BP's practices, the EPA meekly said they would study the issue, which was an acknowledgment that it has no answer either.

The federal government's failure to know how to handle the Deepwater Horizon oil spill does not end with the EPA. It goes all the way to the top. Frustrated by his government's inability to master the problem, President Barack Obama reportedly cut aides short recently, ordering them to "plug the damn hole." As if no one had thought of that already. But instead of focusing on the problem at hand, President Obama moved to appoint an unaccountable commission to study the problem substituting process for action at a time when leadership was needed. The commission shifts the responsibility from the persons we elect to oversee these issues to unelected bureaucrats.

The Pew Research Center has released a poll showing a majority of Americans give President Obama and his administration bad marks for its handling of a massive oil spill. To combat this rising discontent, the Obama administration flew Coast Guard Admiral Thad Allen up to Washington to provide some clear answers as to who was in charge of the operation. Just this past Sunday, Interior Secretary Ken Salazar had said of BP: "If we find that they're not doing what they're supposed to be doing, we'll push them out of the way appropriately." But when asked about Salazar's comments Monday, Allen responded: "Well, I would -- I would -- I would say that that's more of a metaphor. ... You need equipment and expertise that's not generally within the government -- federal government, in terms of competency, capability or capacity. There may be some other way to get it, but I'm a national incident commander. And right now, the relationship with BP is the way I think we should move forward."

BP, rather than taxpayers, should be held responsible for the costs of the clean-up and liability, and under current federal law that is the case. BP is currently responsible for every penny it costs to clean the mess up. Furthermore, they are responsible for up to $75 million in liability costs (i.e. the secondary costs incurred by businesses and communities) directly, and up to $1 billion additionally comes from the Oil Spill Liability Trust Fund. And the $75 million cap is waived if the responsible party is found to be grossly negligent. Calls to increase these caps retroactively are not needed and are more political expediency then either stopping the leak or mitigating its consequences. Equally frustrating are calls to raise the gas tax, and transfer the costs of this spill onto American consumers.

And that right there, in a nutshell, is the problem not only with the Obama administration's handling of this crisis, but with the entire regulatory state. The Obama administration is set to announce new and stricter regulations on the oil industry tomorrow. But as the NEPA waivers and MMS failures of this accident show, the existing regulatory framework is already not being enforced. So how will new regulations piled on top of the old ones fix the problem? When government micromanages how private enterprises are run, those entities are not incentivized to prepare for the worst outcomes. Now no one has developed a plan or the expertise to deal with this spill.

The Obama administration's leftist narrative is that after eight years of deregulation under the Bush administration, American businesses are dangerously under regulated. But this simply is not true. By every objective measure, regulation increased - not decreased - during the Bush years. Instead of adding on new regulations, the old ones should be reformed to restore incentives through profit and loss. Instead of retroactively raising the cap on BP's economic liability, thus undermining the rule of law, Congress should look to raising or eliminating the cap in the future. But most importantly, President Obama needs to accept the responsibility that the federal government is the ultimate owner of the land BP is drilling on, and as the primary responsible party he must show more leadership in solving this crisis.