President Obama held a press conference this afternoon and gave the White House press corps an opportunity to gain more information on the oil leak in the Gulf of Mexico.
Obama announced four key oil explorations/operations moratoriums (both temporary and possibly permanent) during the press conference. He did not, however, announce a permanent end to offshore drilling or an end to domestic oil production.
The four key "moratoriums" announced were: a suspension of planned exploration of two locations off the coast of Alaska, the cancellation of a pending lease sale in the Gulf of Mexico and the proposed lease sale off the coast of Virginia, a continuation of the moratorium on the issuance of permits to drill new deepwater wells for six months, and a suspension of action on 33 deepwater exploratory wells being drilled in the Gulf of Mexico.
While such action is commendable and a necessary response to the disaster, how long will these "moratoriums" last?
The way Obama framed the situation, it seems like the future of the oil industry and when these "moratoriums" are lifted or not lifted will rest in the hands of the independent commission the Obama Administration is organizing (former Sen. Bob Graham and former head of EPA William K. Reilly were recently appointed to head the commission; five more members will be added to the commission soon).
Obama repeated four times the reality that domestic oil production was "important" and not going to become a thing of the past as a result of the disaster.
After outlining failures of oversight among members of the Minerals Management Services (MMS), the federal regulatory agency taking the fall for most of the negligence within government prior to this disaster, Obama said, "I continue to believe that oil production is important, domestic oil production is important. But I also believe, we can't do this stuff if we don't have confidence that we can prevent crises from -- like this from happening again."
Obama did not discuss the reality that accidents will happen again. He did, however, suggest that something must be done to ensure that "worst-case scenarios" do not happen again. But, how can government reasonably assure that something like this will not happen in the future? What does federal government have to do to regulate the wider oil industry properly?
Obama and others involved in the response effort are presumably aware of what went on between BP and government. Obama said during the conference, "the oil industry's cozy and sometimes corrupt relationship with government regulators meant little or no regulation at all." Members of the administration may not publicly admit it, but they know such a cozy relationship cannot continue if accidents are going to be prevented (and, right now, there is little sign that the close ties government enjoys with oil companies like BP are going to be severed).
And, supposing the MMS, EPA, and other regulatory agencies involved in regulating did bring an end to their practices of negligence and facilitation, which contributed to the BP oil disaster, is that really enough to ensure future disasters do not happen? All too often the leadership in government is willing to let corporations like BP practice self-regulation, a dangerous policy as evidenced by it's decisions to take cost-cutting measures over safety measures that would have contributed to the prevention of the disaster.
Capitol Hill has been teeming with hearings, which anyone can watch on C-SPAN. Executives and lawyers affiliated with Transocean, Halliburton and BP (and other companies with connections to the disaster and cleanup effort) have all been appearing before political leaders to answer questions about what their company did and did not do. Many are forcing executives to address the $75 million liability cap, a cap that is part of a law known as the 1990 Oil Pollution Act, which was passed after the Exxon Valdez disaster. Political leaders want to know if BP and all those involved are going to pay damages over the cap to people most affected by the disaster.
Of course, all are willing to commit to pay over. They're willing to make that corporate promise. They're even willing to change the law so the companies they work for will have to give up more of their profits. How surprising...
Congressmen ask what they would suggest the law be changed to and executives indicate that they have suggestions on what would be good alterations to the cap and the entire law.
Isn't this backwards? Why should the corporations responsible for this get to suggest what the new laws should be? But, that's the way it goes and why corporate promises to pay "legitimate claims" over the liability cap in the law deserve a certain level of skepticism. What's to say that these tacit commitments become anything more than tacit commitments? What keeps these executives and politicians from going to a back room to negotiate ways to externalize the costs and pass it off to Americans, the consumers and taxpayers?
Obama was unwilling to ask citizens to consider the costs of oil consumption or oil as a key energy source used in America. Instead, he said, "And in the meantime, I should also say that Americans can help by continuing to visit the communities and beaches of the Gulf Coast. I was talking to the governors just a couple of days ago, and they wanted me to remind everybody that, except for three beaches in Louisiana, all of the Gulf's beaches are open, they are safe and they are clean."