Robert Weissman is president of Public Citizen.
The BP disaster taught us many things: Giant corporations cannot be trusted to behave responsibly, and have the ability to inflict massive damage on people and the environment. We need strong regulatory controls to curb corporate wrongdoing. We need tough penalties to punish corporate wrongdoers. There is no way to do deepwater oil drilling safely. And it is vital that citizens harmed by corporate wrongdoers maintain the right to sue to recover their losses.
Unfortunately, Congress and the Obama administration have refused to learn the lessons from the BP disaster:
1. BP’s reckless actions and inactions caused the Deepwater Horizon disaster — a reminder that corporations cannot be trusted to police their own activities.
BP made a conscious decision not to install a $500,000 safety device that could have prevented the blowout. BP pressured its contractors to skirt safety measures, and those contractors made multiple mistakes leading up to the disaster.
The lesson that corporations can’t be trusted to police themselves should be blindingly obvious. Yet the Obama administration is now proposing to take government inspectors out of poultry processing plants — and give Big Chicken responsibility for ensuring poultry safety.
2. Strong regulatory controls over corporate activity are necessary to ensure health, safety and planetary well-being.
To its credit, the Obama administration acknowledged that the pre-BP disaster oil drilling regulator — the Minerals Management Service, probably the most compromised regulatory agency in Washington — couldn’t be reformed, specifically because it had the duty both to collect oil royalties and regulate oil drilling. It split the agency apart, creating the new Bureau of Ocean Energy Management, Regulation and Enforcement (BOE) to regulate drilling. But Congress has failed to ratify the change in law, which means it could easily be undone by subsequent administrations.
The Obama administration’s announcement today to expand offshore oil drilling is a terrible idea: It won’t lower oil or gas prices, and it puts taxpayers on the hook for accidents.
The last time the president made such an announcement, the BP disaster occurred two weeks later. We all saw how that ended. Obama should not be laying the groundwork for history to repeat itself.
Current law caps accidental spill liability at $75 million, far below what actual spill damages would likely be. This translates into a huge subsidy for the industry and puts the American people on the hook.
Congress has yet to pass reforms in the wake of that disaster – including raising oil companies’ spill liability from the current $75 million cap.
Opening new areas to drilling while failing to hold oil companies accountable for fleecing taxpayers on existing drilling leases is unfair.
Obama should know better than to hold Big Oil’s support above Main Street’s interests.
Tyson Slocum is Public Citizen’s Energy Program director. Follow him on Twitter @TysonSlocum.
Note: This statement was delivered at a press conference today on Capitol Hill, hosted by Sen. Bernie Sanders (I-Vt.).
Legal speculation is siphoning money from the pockets and pocketbooks of consumers.
Even Goldman Sachs suggests that legal speculation may be adding 65-70 cents to the price of a gallon of gasoline.
Speculators, in other words, are imposing a private tax on us.
This is the worst kind of tax. The proceeds of this Wall Street-imposed tax are going to Wall Street interests, giant oil companies and foreign oil interests. The Wall Street-imposed tax is regressive, with working families hit the hardest. And the unpredictability and impermanence of this Wall Street-imposed tax means that – while it imposes costs on consumers and the economy – it does not do much to shift consumer and investment decisions toward efficiency.
We, the People are not helpless in the face of this legalized rip-off. We can crack down on out-of-control legal speculation with available tools. The Wall Street Reform and Consumer Protection Act directed the Commodity Futures Trading Commission to enact position limits to eliminate excessive speculation. But the CFTC has failed to act.
Now comes Sen. Bernie Sanders’ End Excessive Oil Speculation Now Act to mandate immediate action by the CFTC to end the Wall Street-imposed oil tax. The legislation would end Wall Street’s authority to rip off consumers. Public Citizen strongly supports the End Excessive Oil Speculation Now Act. We need it right now.
Just what Big Oil needed: another victory. First, Congress fails to pass legislation that would respond to last summer’s catastrophic oil spill in the Gulf of Mexico. Then, President Barack Obama announces that his administration will expand offshore drilling, which means more money for the oil industry.
But now, despite overwhelming public support, the U.S. Senate has failed to pass the Close Big Oil Tax Loopholes Act (S. 940), which would have repealed tens of billions of dollars in tax breaks for oil and gas companies over the next decade.
Big Oil is racking up the victories while working families pay the price. Yet again Big Oil defies the odds and gets a minority of lawmakers to support its narrow agenda at the expense of the American public.
The oil industry has killed efforts to be fully liable for the messes it makes in offshore oil spills, and now it holds on to its coveted tax breaks, despite overwhelming evidence that they are no longer needed. What is desperately needed are investments in clean energy to reduce our dependence on oil and deficit reduction. But Big Oil can’t be bothered to be a part of the solution. Instead, the industry uses its money and influence to keep its taxpayer handouts coming.
The big five oil companies – which in the last quarter racked up $36 billion in net profits – will continue to receive taxpayer money because many in the Senate have closer ties to those giant corporations than their own constituents.