Mark Thoma:
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I've wondered if BP's attempts to close off the leak also try to preserve the ability to tap the well again in the future. Are there other things that could be tried that might work better, but make it impossible to use the well again (and hence are last resort measures from the company's point of view, but no the public's)? Perhaps that's not the case, I don't have enough technical expertise to assess the options, maybe the public relations fallout, prospects of fines, lawsuits, etc., make the company do all it can to stop the leak in any case. But it's hard not to wonder given the present structure of responsibility for stopping the leak (including limits on financial responsibility). If the government were to takeover until the leak is stopped, this worry would be lessened (as would others).
However, if the administration does take over, then it will also take over responsibility for what happens. If the well continues to leak until August, and if the administration has taken BP into receivership, the administration will take the direct blame. It has that problem now, of course, the blame will be there in any case, but presently BP absorbs some of the fallout from the failed attempts to plug the leak and the administration can at least try to deflect some of the blame in BP's direction. If the administration takes over, it also takes full responsibility from that point forward, and it's not clear they want that, especially given the present prospects for stopping the leak (though, again, do we know the full spectrum of options, no matter how costly they are?).
So, in general, it's unlikely that an administration will want to take over a company when the problems are particularly hard to solve. It will take over when quick victory is assured, but why take the political risk when the problems are really hard? Better to blame the company.
I'm struggling a bit with this one. I am not very comfortable recommending a take over. I don't feel like I've thought it through enough to call for a government take over of BP, such take overs should be last ditch measures to prevent severe damage (which may justify a takeover in this case). They should not become government habits. I'd prefer that the prospects of charges for damages, fines from the EPA, lawsuits from people whose livelihood depends upon the fisheries, and so on give BP an unambiguous incentive to stop the leak as soon as possible, that its life would be just as threatened as the life in the gulf is threatened if the leak is not plugged relatively soon. There would still be a need for strict government oversight, and it would be important that the government have the authority to force or prevent certain actions and to force disclosure of information. But at least I'd be more sure that the company is doing everything it possibly can -- devoting every possible resource (and asking for government help if more resources are needed) -- to getting this fixed as soon as possible. However, it's not at all clear that the company has these incentives, and even if it did, I would still have doubts about its actions.
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Here's a
comment:
A federal takeover of the task of killing the well is a really, really bad idea. Nobody employed by the federal government has any of the required technical or managerial expertise. If the Coast Guard, or NOAA, or EPA, or MMS, or an ad hoc team of USG employees were suddenly in charge, the first thing they would have to do is to bring on board people who know what they're doing, and all of those people--all of them--work in the private sector. Odds are, several weeks after the takeover, and the interim stand-down, the new government honcho would discover that BP already has a pretty good team and is working every conceivable approach in parallel--as it should. Suppose some of these experts take advantage of the shift to bail instead of going to work for the government? Will they and the new honcho have to comply with government procurement regulations? Will they get anything done before the intercept wells make their efforts moot?
What would make sense is to have government officials who have to approve BP's actions embedded in the technical teams, so they know what's going on, what's being considered, the risk assessments that are being made, etc. and are able to quickly approve action plans because they already know what's in them by the time they get formally presented. Do we know that's not happening already? I suspect it is happening. For USG to get more deeply involved than that does nobody any good, least of all USG's reputation.
Unlike Katrina, where USG (especially military) actually did have useful assets, manpower, and expertise, USG has nothing to contribute to BP's well kill problem. Unlike Three Mile Island, where probably nobody had any expertise, BP and especially its private contractors actually know a great deal about the various ways of controlling a blowout. Their problem is that nobody has had to do it in this depth of water, and they have to extrapolate and guess and use trial and error, but even with that handicap they are way, way ahead of whomever might be on the B Team.
The only part of this mess USG should even consider "taking over" is the coastline clean-up. USG may actually have more expertise in that than BP does and may through Emergency Mgmt Service have ways of quickly mobilizing resources. But first, let's ask what's actually going on. In many areas, cleanups are prepared for and conducted by industry consortia which train for cleanups and immediately put expertise and resources from multiple companies to work. But it may that in this case the oil company resources are overwhelmed.
It's a terrible situation, but that doesn't mean we can't make it worse by panicky intervention.
Reich (from his piece) clearly knows this is about appearances and semantics:
The Obama administration keeps saying BP is in charge because BP has the equipment and expertise necessary to do what’s necessary. But under temporary receivership, BP would continue to have the equipment and expertise. The only difference: the firm would unambiguously be working in the public’s interest.
He is advocating that the government nationalize to become legally responsible.
The President is not legally in charge. As long as BP is not under the direct control of the government he has no direct line of authority, and responsibility is totally confused.
Why on earth would the government want to become legally responsible for an effort that will be in the hands of BP, and the solution will likely take months to materialize?