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Gulf oil spill: six lessons

The Gulf oil spill has produced a gusher of lessons about oil production, consumption, and oversight.

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    Tourists in Lafourche Parish, Louisiana, enjoy the afternoon on the beach in the shadow of a drilling rig. Oil is now landing on the beaches of Jefferson and Lafourche parishes to the west of the Mississippi River outlet.
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The lessons to be learned from the Gulf oil leak are as broad as the spill itself – from the slicks on the surface to the globules on the shore, with others still unknown due to lack of information from the depths.

It’s been three weeks since the April 20 explosion sunk the BP-managed oil rig and killed 11 people. The resulting megaspill underscores improvements that must be made in oil production, oversight, and consumption.

This week, for instance, six West Coast senators proposed a permanent ban on drilling in the Pacific. The blowout in the Gulf has pushed to the foreground memories of the 1969 oil rig disaster off the California coast.

A permanent ban may be desirable, but those seeking to protect America’s waters must realize that not-near-my-beach bans in the United States put pressure to drill elsewhere in the world (Lesson No. 1). And “elsewhere” can have very low or nonexistent environmental standards, such as in Nigeria.

The US relies on oil imports from that West African coastal nation, but along with oil, Nigeria also produces oil spills – the equivalent of an Exxon Valdez pouring out about every year.

The way to relieve drilling pressure in faraway lands is to consume less oil at home (Lesson No. 2). Rising gasoline prices put the brakes on consumption, but it sure would help if Congress passed an energy bill that raises the cost of fossil fuels and supports renewables (Lesson No. 3). One was introduced in the Senate this week, but it could now be in trouble because of its offshore oil drilling provision – originally intended to attract buy-in from senators with ties to the oil industry.

Perhaps it’s time to forget that provision, given the situation in the Gulf. Lawmakers need to find the spine to say no to the oil and gas industry (Lesson No. 4). The industry’s lobby has muscle and gives generously to candidates at election time – about as much as the commercial banking industry (America saw what that did to oversight of Wall Street). Sen. Mary Landrieu (D) of Louisiana is the biggest recipient of donations from BP in Congress. Appearances matter, even if influence is hard to trace.

Easier to trace is the relationship between the Minerals Management Service (MMS), which regulates offshore oil drilling, and the oil companies it regulates. As President Obama admitted Friday, those ties are too “cozy,” a conclusion backed up by 2008 reports from the Interior Department’s inspector general. In hearings this week it was revealed that the industry that makes blowout preventers – the crucial piece of equipment meant to stop leaks – is self-regulated.

The conflict of interest within the MMS is that the agency collects fees and royalties (worth $13 billion annually to the federal government) and also gives out drilling permits and leases.

This week Interior Secretary Ken Salazar moved to split the agency, separating the inspecting and enforcing side from the leasing and fee-collecting side. But how does this break the core conflict of interest? Fundamental reform of MMS is required (Lesson No. 5).

Last, compared with its relatively good record, this time the industry has grossly fallen down on the job. It promised fail-safe drilling, and it didn’t deliver. It promised disaster preparedness, and it’s not prepared for anything close to this scope. On Capitol Hill this week, executives from BP, Transocean, and Halliburton pointed fingers at each other. A new ethic of responsibility needs to take root here (Lesson No. 6).

This tragedy, because of its immensity, now requires immense reform of the oil industry and its patrons, from the depths of the Gulf to the halls of Congress.

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