Six lessons from the BP oil spill

So the BP oil spill may not dramatically change US energy policy, but instead delivers a warning – as did the two OPEC oil embargoes, the Exxon-Valdez spill, and the record gas prices two years ago. The message: Our continued reliance on oil carries economic and environmental risks that the US will continue to bump up against until it undertakes a coherent and consistent policy to gradually wean us off fossil fuel.

"The lesson that we should learn here is that if we took sensible steps, baby steps, instead of these grandiose [pronouncements], I think we would be better off," says Frank Felder, director of the Center for Energy, Economic and Environmental Policy at Rutgers University in New Brunswick, N.J.

One step would be a bigger push on energy efficiency. The US could cut growth in electric consumption by 30 percent, says James Sweeney, director of the Precourt Energy Efficiency Center at Stanford University in California. To get the equivalent power would require quadrupling America's nuclear capacity or scaling up wind and solar energy to 40 to 50 times its present size. "If we think all the solutions are just technological, we're not going to focus on a group of nontech solutions that will allow us to have more effect," he says.

What's striking, though, is how eager policymakers are to enact some of those steps and fearful to undertake others. On the production side, the Obama administration has moved aggressively to revamp the MMS (now renamed the Bureau of Ocean Energy Management, Regulation and Enforcement), appointing a former prosecutor to head up the agency and promising to hire more oil rig inspectors.

Another item in Democrats' cross hairs: a $75 million cap on oil companies' liability, beyond cleanup costs, passed in the aftermath of the Exxon Valdez disaster. Democratic lawmakers and the White House want to raise the cap substantially or eliminate it altogether so that oil companies no longer have an incentive to take risky actions in the belief that their liabilities would be limited.

It's too early to tell if the BP spill will spark a reevaluation of the risks of deep-water drilling versus drilling in shallow water or on land. Much depends on whether the investigations under way determine that deep-water safeguards are adequate and that BP was negligent or that drilling that far down pushes technology too far.

While policymakers are taking action that affects production, they've been more timid about consumption. One reason is that the risks of offshore drilling and other forms of energy production are so much more visible than the risks of continued high consumption – reliance on foreign sources, greenhouse-gas emissions, and so on.

"A picture is worth a thousand words and the images [from the Gulf] bring home in a very accessible way how the oil spill has affected people's lives," says Michael Greenstone, professor of environmental economics at the Massachusetts Institute of Technology in Cambridge. "The difference with climate change is that the changes occur very slowly and in a subtle way that will not appear on your TV set next month."

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