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Government Shares Blame with BP for Oil Spill

Categories: Politics

By Wes Benedict

June 18, 2010

The federal government and BP share the blame for the large oil spill in the Gulf of Mexico.

When the CEO of BP appeared at a Congressional hearing yesterday, Republicans and Democrats predictably engaged in finger-pointing and blame-ducking, trying to score political points.  Their fingers should have been pointed at themselves.

When President Obama gave his Oval Office speech on Tuesday, there was one important word missing: the word "liability".  The president never mentioned that, thanks to liability caps provided by the federal government, BP was able to engage in riskier activities than it would have otherwise.  If BP had known in advance that it would be fully liable for all damages related to an oil spill, it probably would have taken greater safeguards.  When you know that your liability will be strictly limited, cutting corners becomes a lot more attractive.

The spill will cause a lot of damage to the property and livelihood of people living along the Gulf.  We have a well-developed system of civil courts to help people obtain compensation.  Unfortunately, the legislative and executive branches have inappropriately trampled on this territory, and they seem to be trying to take the place of the courts.

The president has apparently convinced BP to put $20 billion in some kind of compensation account.  He said in his speech that it will be "administered by an independent third party."  Will this third party be able to decide what "legitimate claims" are, and how much they should receive?  Assessing damages should be done by courts, not by political bureaucrats appointed in backroom deals between the president and a large corporation.

The president could have taken the opportunity to talk about getting government out of the energy industry, and allowing the free market to guide the future of energy production.  Unfortunately, he instead blamed the free market for government failures, and discussed his hopes of increasing government interference in the energy industry.

For decades, Libertarians have warned against putting trust in government regulatory bureaucracies like the Minerals Management Service (MMS).  While costing the taxpayers a lot of money, these agencies generally fail to deliver the kind of protections they promise, they tend to become corrupt, and they discourage vigilance on the part of citizens by lulling them into a false sense of security.

When large companies and the government start working together, the results can be disastrous.  Congressional liability caps, the MMS bureaucracy, and BP have all cooperated to create a costly disaster that should never have happened.

Wes Benedict is the executive director for the Libertarian Party.


"If you can't say something nice, let's hear it!"   — Joan Rivers

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