Oilpocalypse: Who Should Pay?
I started a small Twitter war last night when I suggested that perhaps we should tax gasoline to pay for the cleanup of the oil volcano in the Gulf.
BP is statutorily limited to $75M in damages for a spill. I suspect that they will end up paying more than that voluntarily, but they will, at some point, say no mas. There is likely a bill that will raise the limit, but I believe that the courts will not allow then to enforce it retroactively. Who pays then, and how do we collect the money?
I have suggested that we tax gas, since it is a way to align the cost of the spill with the consumers that create the demand. I maintain that we, as oil-demanding consumers, bear some responsibility for the oil spill. That responsibility is not unlike the responsibility that drug users in the US bear for drug cartel violence in Mexico. One of our local conservative bloggers, Elbert says that he bears no responsibility for that oil spill in the gulf.
What do you think? Should we pay for it from the general fund, let the gulf states pay, do some sort of special tax, or chase BP in the courts for 20 years to squeeze the money from them?
Tags: Oil, Oilpocalypse, taxes
We should tax stock transactions of oil companies. And gas.
jpconnor and I continued after you all vacated the premesis last night. One of the points I brought up to him and also replied to X on my blog a few moments ago is the many uses of the byproducts of crude beyond the widely-known fuel end-product. This is in response to a reflexive answer to simply stop drilling and effectively give up crude altogether. Not to sound rough, but that’s almost as shallow-thinking of an answer as it is for a climate-denier to claim everything will simply fix itself or leave it up to God.
Thinking punitive, I think most of us would like to see BP and the operator of that rig (the name suddenly escapes me) to be jointly responsible for this. When this is all said and done, I don’t know who really sees that being the actual outcome. *sigh*
We scream that the taxpayer shouldn’t shoulder this burdon, which I reflexively agree, but to your point, to what extent would there be drilling if we weren’t so thirsty for the fuel end-product?
There are many ways with many reasons that we can point the finger of responsibility, direct or indirect. It’s almost (if not the same) as open a question as I posed in my blog today (previously linked).
Isn’t this what is called the real price of fossil fuels?
An increase in the federal gas tax is right on many, many levels. It’s past time for the U.S. to get over our addiction to fossil fuels.
While it is true that American consumers are addicted to oil, they did not do anything to encourage the irresponsible behavior of BP, Tansocean, or the MMS employees who were so cozy with the operation. This won’t happen, but what I think would be fair:
Federal agents arrest the players at MMS and the principals at each BP and Transocean, and try them for wrongful death of the 11 workers, and risking/causing a catastrophe. The terms of any release involve surrender of their passports. The U.S. Government freezes the assets of BP and Transocean, liquidates and pays for the cleanup. The companies and their shareholders can spend 20 years in court trying to get it back.
Sure we encouraged the irresponsible behavior. Drilling a 2 mile hole a mile below the surface of the Gulf of Mexico is inherently risky. We try to control those risks, but there are huge price pressures, demands on more oil and faster production. If we drive cars around getting 15 mpg, while we could be driving vehicles that got 30 or 40, we are demanding that these companies take risks on our behalf.
A penny a gallon would pay for the clean up over the next decade. Make it three cents so we can be ready for the next spill when some earthquake hits and still have a billion a year to reward development green alternatives. More oil available will more than offset the small tax on gasoline. I can go with you on this one. I am sure you will advocate some massive tax in order to have some alternative agenda then I will have to bail on you.
Change the law for the future. 75M is just a joke. The tourist industry lost that in a week. The seafood industry….
Implement the tax then the government could sue for the money back under current law just like with the Exxon Valdez.
The truth is off shore drilling is a lot better than tankers. It provides fewer spills and less volume of spills. Crude is a natural part of the environment. Natural leaks drawf this one in volume. There is no need to panic. We just need to put our heads down, stop the leak, and clean up the worse of our mess. Then we need to require the same inexpensive safety requirements that the rest of the world uses so it doesn’t happen like this again.
Under the same bill that limits liability for oil spills, the clean-up is supposed to be funded by a tax on each barrel of oil. Maybe that needs to be increased but it already exists.
http://www.nytimes.com/2010/05/02/us/02liability.html
True, the problem is the fund has less than 2 billion dollars as I understand it. This bill will exceed that cost in the first year and will take a decade after that. I don’t care how it is done. Double the tax. It is better than the gas tax politically because it is hidden. I personally like taxes we can see. We should know how much we pay and why.
I’ll confess I didn’t know it existed so I won’t dispute it was well hidden!
Could we at least triple the liability limit to allow for inflation?
Crude is a natural part of the environment.
David, so is methane, but as soon as there is a massive release, the potential catastrophe is huge, albeit locally. I don’t think minimalizing this as a natural part of the environment is all that wise, although I am not sure if that was your intent or not. Yes, it’s a byproduct of naturally ocurring events, as is methane, but letting it leech or hemorrhage out is terrible.
We also need a hike in the federal gas tax to work on the highway infrastructure. It needn’t be large to reap the money needed — we purchase 378 million gallons of gasoline per day. Therefore a 1-cent tax increase = $3.78 million/day in tax revenue, or $1.38 billion/year. That’s per penny. Ten cents would bring in $13.8 billion/year. Just sayin’.
…highway infrastructure…
Which, btw, is another use of the myriad of byproducts of crude, to refer back to my first comment on this thread.
‘Drilling a 2 mile hole a mile below the surface of the Gulf of Mexico is inherently risky.’
Agreed. I was really referring to the irresponible behavior involved in allowing damaged parts to remain in service, skipping inspections, and lobbying for weaker regulations and penalties. Consumer demand didn’t drive any of that; just greed on the part of the producers.
Well, unless you consider our demand for oil at the best prices. If they used the best safety equipment and it cost an extra dollar a barrel, would we be willing to pay that dollar? As a society, our demand for cheaper products drives Walmart’s stock up, yet that same demand chokes off smaller shops, domestic producers and may encourage sweatshops in Vietnam (for example).
I agree that the responsibility/risk is hard to see, but it is there just as we bear responsibility for mountaintop removal when we demand electricity or clear-cutting forests when we buy a McMansion. Our decisions drive their decisions.
Yeah, LG. I agree the demand for the product has to correlate in some way to the producer cutting corners to increase their profit. I still see the hand of greed at work in what amounts to a circle of corruption between the producers and the government agents supposed to keep them operating within at least a mandated level of safety.
I also think there is an argument to made for a higher gas tax for lots of good reasons. What i dislike about increasing the tax to pay for the BP cleanup is that we once again socialize tremendous loss, but still privatize corporate gains. I would rather see the corporate malfeasance and the government enablers punished. I’m not crazy enough to think it will really happen. I am sure the taxpayers will be on the hook to clean this catasrophic mess up. Sigh.
What has been lost is priceless. No amount of money will ever clean it up or restore it.
I agree with ek to a degree, but this law was passed when the oil companies didn’t have much money because crude was 10 dollars a barrel and the oil patch was in a near depression. They wanted to make sure we had the money in the event of a disaster right when we needed it. The limit on liability was just to benefit the oil lobby. I am sure campaign contributions flowed to the right people.
Our decisions drive their decisions.
Only to the extent that we don’t demand better decisions. As ek said, the fact that I filled up my gas tank this AM certainly had little to do with the fact that a deep water well wasn’t grouted appropriately, did not have the right shutoff equipment, didn’t have a complete EIS or even cleanup technology that is advanced as the deepwater drilling techniques that go get this oil.
Remember that the domestic oil production is never going to displace much of the stuff we import. Current domestic production counts for about a tenth or an eight of what we use and that isn’t enough to cause a crisis for the oil counties who we do import from. Natural gas is a different story.
It would be a great thing for Americans to know exactly how much they pay for oil — including the product price, shipping and refining but also add in the tax subsidies for drilling, the revenue lost for less than market rate leases, the lack of regulation and oversight from MMS, the pipeline subsidies, the cost of maintaining a military who needs to go to the middle east every other decade (and maintain a great presence there) to make sure we can get to that oil, and the cost of various cleanups ranging from abandoned USTs, to groundwater contaminated by hydrocarbons, to pipeline leaks and everything else cleaned up by state and Federal programs. Add in the cleanup taxpayers will do up in Prudhoe Bay when that is done. I bet you could add $2.00 per gallon and still not cover it.
sierra club
Washington University physics professor Jonathan Katz is part of a five-man team of the nation’s “best scientific minds” assembled by the Obama administration to help BP stem the flow of oil gushing into the Gulf of Mexico… but was fired this week for not being Pro-Gay
don’t worry I’m sure Obama will announce the appointment of an undocumented, one-legged, black lesbian (and her translator) to replace the scientist.
Political Orthodoxy trumps science.
RD, it is naive to think oil companies plan for any kind of “future” other than next quater’s profits.
And Oilbama is helping to ensure those profits.
Oilbama! That is a CUTE one A1! It is a little more inspired than Obomba. Of course MY favorite is l his warhawk name, “I’llBombYa”. But that is close to obomba….. so many petulant pet names and no action….. teabag.
Thanks, AP. I thought you’d like it. I was thinking “Oilbomba” but that is too much. I still prefer “Obomba” but since he is in the middle of trying to save BP’s oil well while covering up for them, “Oilbomba” seems to fit.
cleaned off any birds yet?
im looking into the logistics of starting a “hair sock” drive. Now, that may sound dirty, but hair in nylons is a great way to saok up oil. If anyone has any idea on how to get something like that off the ground…. i.e getting a shit-ton of people to shave their heads, backs, pets… stuff em inot stockings and ship em en-mass to the Gulf, maybe we can make a small dent in the party-neutral mess down there.