When President Barack Obama speaks to the nation tonight about the oil gusher in the Gulf of Mexico, it's almost certain he will use British Petroleum as his punching bag. There's nothing wrong with that: BP and the companies that worked with BP on the doomed Deepwater Horizon drilling platform are responsible
for an unprecedented environmental and economic disaster. There is no question they - primarily BP,
at this stage - should be made to pay every dime of the cost of oil cleanup and reimbursement for economic losses suffered by the people of the Gulf Coast.
But as culpable as BP certainly is, the law of unintended consequences should not be ignored by an angry president, damaged Gulf business people, self-serving members of Congress or an outraged American public. In that regard, some of the sanctions proposed against the company could compound the problem. Consider:
- Calls to permanently block deepwater oil drilling will mean even more economic pain in the Gulf than already is being felt. The jobs on those rigs pay well and generate thousands of support jobs on and off shore, most of them held by Louisianans. The oil produced is vital to the nation’s energy supply.
- If BP is forced to forego a scheduled dividend to stockholders it means some $7.5 billion will not be paid to pension funds, 401(k) mutual funds, small investors and other segments of the U.S. and world economies. Who gets hurt in that scenario?
- BP America employs about 30,000 in the U.S. It’s a U.K.-based company, but it’s an international corporation with an economically important presence in the states. Suggestions that the company should be forced into bankruptcy or receivership could translate into the loss of thousands of good-paying American jobs at a time the nation’s unemployment rate is in recession territory.
The easiest expression of the justifiable outrage over BP's incompetence (possibly criminal negligence) is beating up on the company. While that's appropriate and necessary, it's not enough. It's too easy.
BP worked in the Gulf under a structure of regulation and oversight that was promulgated in the U.S., not in the U.K. A cozy regulation regime that was modus operandi in the Bush administration and tolerated in the Obama administration contributed to the Gulf disaster. Policymakers in Congress and at least two administrations and lax regulators in federal agencies are not off this oily hook.
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Environmental degradation is unimaginable. The damage to the Gulf economy looks to be worse than it was in the aftermath of Hurricane Katrina. BP's safety record before the spill was abysmal. But there are no easy answers, no quick fixes. Politicians who suggest otherwise are lying to us - and to themselves.
Forum editorials represent the opinion of Forum management and the newspaper's Editorial Board.
