The oil spill is no reason to destroy the economy
According to the latest news accounts, the engineers trying to stop the flow of new oil pumping into the Gulf of Mexico have had at least limited success, which is a relief. However, the issues surrounding the oil spill only have begun, and, as usual, the statists have the upper hand.
This is the third major U.S. oil spill in my lifetime, although none of these spills have been as great as those that have hit other countries. What is different, however, is the reaction that Americans have had to the spills — especially the political reaction. The fact that our society is so politicized does not enable us to have a rational response to these inevitable spills, and that is a shame.
The first major spill that I remember was the Santa Barbara blowout of 1969, in which a well under a platform six miles off the coast of California blew out and about 100,000 barrels of oil got out, much of it washing ashore and killing about 10,000 birds. The pictures of that oil spill provided fodder for the Earth Day festivities that were launched a year later.
The next one came 20 years later, as the Exxon Valdez ran aground off Prince William Sound in Alaska and about 250,000 barrels of oil turned some of the shoreline into a wasteland. The public reaction against this and the Santa Barbara spill changed the attitudes of many Americans about drilling offshore for crude oil (although the Alaska spill dealt with a tanker accident, not a problem with the oil rig).
And now, we have the experience with the Gulf blowout with the failure of the BP deepwater platform in which, admittedly, the technology for deep drilling apparently is much further advanced than the technology for plugging the well itself. As this looks to be the largest oil spill in U.S. history (but not even in the top 15 in world history), no doubt the political reaction will be very predictable, especially given that a left-wing Democrat is in the White House and he already is on the “green jobs” bandwagon.
First, what is the perspective that I am pushing in the wake of what clearly is an environmental disaster? It is this: while the oil spill is bad, nonetheless the number of spills has decreased as technology has improved — even as engineers look for oil in harder-to-reach places. This is not a trivial perspective. In fact, one of the reasons oil spills are such big news is because they don’t happen very often. That does not lessen their severity when they do occur. Nonetheless, we should not forget that fact.
Second, what should be our response? I can guarantee you that our response should NOT be to build more windmills or to force Americans to pour more corn “likker” into our cars or to require that we all drive cars that get 50 miles to the gallon. Unfortunately, we will see Congress react — and Congress always is reactive in these situations — by making us more dependent upon heavily-subsidized technologies and fuels, which will further drag down the economy and make all of us poorer.
Third, the rhetoric from the Obama administration — “We need to put the boot on BP’s neck — is not helpful, and I agree with Rand Paul: it is un-American. The notion of the state engaging in such action tells us that the Obamaites have been chomping at the bit to use whatever crises come about in order to further control the rest of us.
Instead, the U.S. response should be to deal with this as all industrial accidents should be dealt with: find out what went wrong and let the industry fix it. The insurers of these rigs and operations should have a lot more say in what goes on than they presently do, and I guarantee you that because the insurance companies ultimately pay the bills, they should be the ones doing most of the regulating — not the government.
No, insurers are not foxes guarding the henhouse. People who have to pay the bills always take a greater interest in a set of circumstances than those who do not. Government regulation has a huge disconnect between those who regulate and those who pay, and the sets of incentives that exist there are not conducive to effective regulation.
It may be that companies engaging in deep-water drilling might not be able to continue doing so unless they also have developed ways to deal with these kinds of accidents. I have no problem with that scenario, but I do have a problem with the government taking this latest incident as “proof” that the state needs to “put its boot” on our necks.
The laws of science tell us that the oil molecule releases far more energy than the other “alternative forms” touted by the government, and there is a real price to pay for abandoning petroleum and turning to “government-approved” methods. We have to understand that the price we will pay for “alternative” fuels will dwarf whatever the costs of this latest oil spill might be. The administration might be able to spew out rhetoric, but it cannot control the laws of thermodynamics, and it certainly cannot rewrite the laws of economics.
—Bill Anderson
